TMI Blog1939 (6) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... or such purposes, the income applied, or finally set apart for application, thereto. In this sub-Section charitable purpose includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility. 3. Sardar Dayal Singh, a Sikh inhabitant of the Punjab, died in 1898 having by his will, dated June 15, 1895, created three separate trusts, to be administered by three independent committees of trustees. Two of the trusts were for the establishment and maintenance of (1) an Arts College (2) a public library. The third trust was declared by the 20th and 21st paragraphs of the will in the following terms : XX. That my property in the stock and goodwill of the Tribune Press and Newspaper in Anarkali, Lahore, shall vest permanently in a Committee of Trustees consisting of the following members, viz. : 1. Babu Jogendra Chandra Bose, M.A., B.L., Pleader, Chief Court, Lahore. 2. Mr. Charles Golak Nath, B.A., LL.B., Barrister-at-Law. 3. Mr. Harkishen Lal, B.A., Barrister-at-Law, Lahore. XXI. That it shall be the duty of the said Committee of Trustees to maintain the said press and newspaper in an efficient cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot exempt, Tek Chand J. dissenting. From this decision (June 4, 1935 ) the present appeal to His Majesty was brought, and at the first hearing on July 22 and 23, 1937, it was considered by the Board to be desirable that the powers conferred by Sub-section (4) of Section 66 of the Act should be employed to obtain further information. Accordingly by an Order in Council dated July 29, 1937, it was directed in accordance with the advice tendered by the Board : (2) that the case ought to be remitted to the High Court of Judicature at Lahore with a direction that the said High Court shall refer the case back to the said Commissioner under Section 66(4) of the Indian Income-tax Act 1922 first for the addition of such facts during the lifetime of the Testator Sardar Dyal Singh as may bear upon the proper interpretation of the expression keeping up the liberal policy of the said newspaper in clause XXI of the Will of the said Testator dated the 15th day of June 1895 and secondly for the addition of such facts as to a compromise dated the 1st day of December 1906 as may show whether the said compromise is binding on all parties interested in the estate of the said Testator. 8. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erms of the exempting clause in the Indian Income-tax Act with the observations of Lord Lindley in the case of In re Macduff : Macduff v. Macduff (1896) 2 Ch. 451 and 467, where, after referring to a well-known passage in Lord Macnaghten's speech in Commissioners for Special Purposes of Income-tax v. Pemsel (1891) A.C. 531 and 583, Lord Lindley held that in English law there might be some purposes of general utility which might be charitable and some which might not, the true test being the spirit or intention of the statute of Elizabeth (43 Eliz. c. 4). Learned Counsel for the respondent in the present case, while not apparently conceding that under the Indian statute the sole test to be applied! to the object of a trust was that of general public utility, was willing that this should be assumed in the present case. He suggested that the question whether an object was of general public utility was a question of fact to be found and stated by the Commissioner, and not a question of law for the Court. Their Lordships, while unwilling to pronounce upon any matter which has not been argued before them, consider that the Courts in India might be misled if the Board appeared to cast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nevertheless for a charitable gift to be valid it must be shown (1) that the gift will or may be operative for the public benefit and (2) that the trust is one the administration of which the Court itself could if necessary undertake and control (p. 242) : If a testator by stating or indicating his view that a trust is beneficial to the public can establish that fact beyond question, trusts might be established in perpetuity for the promotion of all kinds of fantastic (though not unlawful) objects. 13. Their Lordships are in agreement with this view and see nothing in the Indian Income-tax Act to discharge the Court of its responsibility in coming to a finding as to the character of the object of a trusta matter which bears directly upon its validity. It is to be observed moreover that under the Income-tax Act the test of general public utility is not only applicable to trusts in the English senge but is to be applied to property held under trust or other legal obligation a phrase which would include Moslem wakfs and Hindu endowments. The true approach to such questions in cases which arise in countries to which English ideaslet alone English technicalities may be inapplica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n matter in the nature of political propaganda and would be devoted to the advocacy of particular legislative measures considered by its founder to be measures of reform. It is not suggested that the views or measures to be advocated were in any way unlawful, but even so the political character, it is said, prevents the trust from being held to be for an object of general public utility. Lord Parker said in Bowman v. Secular Society, Limited (1917) A.C. 406 (p. 442) : ...a trust for the attainment of political objects has always been held invalid, not because it is illegal, for everyone is at liberty to advocate or promote by any lawful means a change in the law, but because the Court has no means of judging whether a proposed change in the law will or will not be for the public benefit, and therefore cannot say that a gift to secure the change is a charitable gift. 16. And in Tetley, In re : National Provincial and Union Bank of England, Ld. v. Tetley (1923) 1 Ch. 258, where the gift was for patriotic and charitable objects, Russell J. said (p. 262): But must every application of the fund for a patriotic purpose be beneficial to the community and therefore charitable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary thereto, the gift was upheld even on the hypothesis that the latter purpose would not have been charitable in itself. 20. In The Bonar Law Memorial Trust v. The Commissioners of Inland Re-venue (1933) 17 T.C. 508 Finlay J. had to deal with a college founded in connection with the Conservative party and after reviewing the cases above-cited held that the question was whether the dominant purpose was a good charitable purpose or not ( p. 517 ) : The fact that the education was entrusted to the Conservative Party would not, I think, affect the validity of the Trust if in truth it was a trust for education; but, on the other hand, if the true view is that the Trust was a trust for the promotion of conservative principles...and that the education, the lectures, and so forth, were subsidiary to that which was the main and dominating purpose, then the fact that the lectures, and so forth, would be educative would not be sufficient to make the Trust a trust for charitable purposes only. 21. Holding that the college was in effect an educational centre for the Conservative party and that this was in accordance with the trust deed, the learned Judge decided that the claim for exe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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