TMI Blog1973 (7) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... tee. The wakf properties were mainly immovable properties mentioned in the schedule to the document and the use and enjoyment of the properties and the income thereof was required to be made for the purposes set out in the operative part of the document. The management rested absolutely in Mullaji Saheb as the holder of the office of Dai-ul-Mutlak and his successors in office. In the assessment proceedings for the aforesaid assessment years the claim was made on behalf of the assessee (the trustees) that the income of the trust properties was entitled to the exemption under section 4(3)(i) of the Income-tax Act, 1922. The Income-tax Officer, while accepting that there was a validly constituted trust and that the objects of the trust were religious and/or charitable, rejected the claim of the assessee for exemption on the ground that the provisions of clause 14 of the trust deed conferred upon Mullaji Saheb complete power over the income of the trust and enjoyment thereof for his own use and benefit and in any other manner he liked and, according to the Income-tax Officer, this clause had overriding effect on all the other provisions of the document. It was pointed out on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rposes as relate to anything done within the taxable territories, and in the case of property so held in part only for such purposes, the income applied or finally set apart for application thereto. On the admitted facts it was not disputed before us by Mr. Joshi, appearing for the revenue, that by the deed of wakf dated January 25, 1937, a valid trust was constituted and that the objects of the trust were religious and/or charitable and the only contention urged before us by Mr. Joshi was that having regard to certain provisions contained in this deed the income of the trust property could not be said to have been held by the Mullaji Saheb under a legal obligation to spend the same for charitable purposes and in support of this contention he invited our attention to clause 6 and clause 14 of the document. Under clause 6 it has been provided that it shall be competent to the Mullaji to make use of the rents and income, if any, arising out of the said properties for any purpose of the Dawat either religious, pious, charitable or otherwise in addition to or in substitution of that or those thereafter described, the Mullaji Saheb being the sole judge in his absolute discretion of w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charitable or similar nature. Mr. Joshi then relied upon clause 14 of the document, which runs as follows : " And we the said wakifs do and each of us doth hereby covenant with the said Mullaji Saheb his successors-in-office and assigns that notwithstanding any act deed or matter whatsoever by us or by any person or persons lawfully or equitably claiming from under or in trust for us made done omitted or executed or knowingly or willingly suffered to the contrary we now have in ourselves good right and absolute power to grant convey assign and assure the premises unto and to the use of the said Mullaji Saheb in manner aforesaid and that it shall be lawful for the said Mullaji Saheb and his successors-in-office and his or their assigns from time to time and at all times hereafter peaceably and quietly to hold possess and enjoy the said premises hereby granted with their appurtenances and receive the rents and profits thereof for their own use and benefit without any lawful eviction interruption claim and demand whatsoever from or by us or from or by any other person or persons lawfully or equitably claiming by from under or in trust for us AND THAT free and clear and freely a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant for title, covenant for quiet enjoyment, covenant against incumbrances and covenant for further assurances and as such these covenants can never have the effect of controlling or overriding the operative parts of the deed. The operative parts of the deed make the following position very clear. Firstly, it has been declared that the properties shall always remain the properties of Dawat-ul-Hadiyah (Dawoodi Bhora Community) of which the Mullaji Saheb is the spiritual and religious head and in such a capacity as holder of that office the management of the trust properties was vested absolutely in Mullaji Saheb. Clause 6 clearly states that the rents and income of the properties will be used for religious, pious and charitable purposes connected with the Dawat and the very first condition of wakf under which the properties were entrusted to the care of Mullaji Saheb makes the position clear that " the management use and enjoyment of the said properties shall vest absolutely in the Mullaji Saheb as holder of the office of Dai-ul-Mutlak and his successors-in-office ". It is in the context of the operative parts of the deed that clause 14 containing the usual covenants will have to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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