TMI Blog1975 (12) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... h Debutter Estate in Kidderpore near Calcutta. He had originally gifted certain properties to Shree Shree Rakta Kamaleswar Sib Thakur and, thereafter, there was an installation of the Thakurani called Shree Shree Patit Paban. Temples were constructed and from time to time the properties were dedicated and the temples so constructed and directed to be managed had continued to exist. It appears that there are substantial properties attached to the said temples. The income from the properties belonging to the Debutter Estate was not taxed under the Indian Income-tax Act, 1922, for the assessment years 1953-54, 1954-55 and 1955-56, on the ground that income from the debutter estate was exempt under section 4(3)(i) of the Indian Income-tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1957, in respect of the assessment years 1964-65, 1965-66, 1966-67 and 1967-68, the notices were issued. The said notices are the subject-matter of challenge in this application. The petitioners contend that there were no materials for believing that any income of the assessee had escaped assessment during the relevant years. Under section 5(1)(i) of the Wealth-tax Act, 1957, it is provided as follows : " 5. (1) Wealth-tax shall not be payable by an assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee--- (i) any property held by him under trust or other legal obligation for any public purpose of a charitable or religious nature in India." In this connection it would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in receipt of the income--- (a) income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India ; and, where any such income is accumulated for application to such purposes in India, to the extent to which the income so accumulated is not in excess of 25% of the income from the property or Rs. 10,000, whichever is higher." In section, 2(15) of the Act " charitable purpose " has been defined to mean as follows : " 'Charitable purpose' includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility not involving the carrying on of any activity for profit." Similarly, the Expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from the property or Rs. 10,000, whichever is higher. Therefore, two separate independent conditions are required to be fulfilled, that is to say, the income must be derived from the property held under trust wholly for charitable or religious purposes, and, secondly, the application or accumulation of such income in the manner indicated in clause (a) of sub-section (1) of section 11 of the Act. " Charitable purpose " or " purpose of charitable or religious nature " have not been defined in the Wealth-tax Act, 1957. Therefore, it must bear the same meaning as in the Income-tax Act but under the provisions of the Income-tax Act not only should the income be derived from a trust or legal obligation of public purpose of a charitable or relig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has escaped assessment. This position manifests a lacuna in the present provision of law. The position, therefore, is that if the trustees hold the property for public purpose of a charitable or religious nature and if they misapply or commit breach of trust, they will continue to enjoy exemption under the Wealth tax Act. This position should receive consideration by the legislature in order to bring it at par with the provisions of the Income-tax Act. But until that is done, in my opinion, the petitioners are entitled to succeed on the point that there were no grounds for believing that the wealth of the assessee had escaped assessment or had been under-assessed. In the aforesaid view of the matter the notices are hereby quashed and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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