Dominant charitable purpose in a wakf deed preserves tax exemption despite preference for poor relatives.

The dominant object of the wakf deed was charitable, so the trust's income qualified for exemption under the Indian Income-tax Act, 1922. A preference for poor relatives of the settlor did not destroy charitable character because relief of the poor remained the primary purpose. The deed also supported charity through provisions for educational assistance, aid to widows and orphans, maintenance of mosques and schools, marriage assistance, and burial needs. Trustee discretion among these objects did not alter the overall charitable nature of the settlement, as the charitable purpose remained dominant throughout.

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Issues: Whether, on a true construction of the wakf deed as a whole, the trust was held wholly for charitable purposes so that the income derived from the trust property was exempt under section 4(3)(i) of the Indian Income-tax Act, 1922.

Analysis: The decisive question was the dominant object of the settlement. The trust deed required the income to be applied primarily for the relief of the poor, with preference first to poor relatives of the settlor and thereafter to poor members of the Memon community in the locality. The Court applied the principle that a preference in favour of relatives does not destroy a trust's charitable character where the primary and dominant purpose remains charitable. The later objects in the deed, including help to the poor, educational assistance, aid to widows and orphans, maintenance of mosques and schools, marriage assistance, and provision of burial needs, reinforced the charitable nature of the settlement. The possibility that the trustees could, in their discretion, apply income among the enumerated objects did not alter the dominant charitable purpose.

Conclusion: The trust was held to be charitable in its dominant object, and the income was exempt under section 4(3)(i) of the Indian Income-tax Act, 1922.

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