Fact-finding required for charitable expenditure claims before answering tax reference questions

The reference concerned whether expenditure on horses, carriages, motor cars and trustees' allowances was income applied for religious and charitable purposes or allowable in computing income. The record did not show that the factual basis of these expenses had been fully examined by the assessing authority, and the court held that the actual purpose and character of the expenditure required fresh fact-finding, including further evidence if necessary. It therefore declined to answer the referred questions and remanded the matter to the Tribunal for fresh decision and further reference to the Assessing Officer if needed.

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Issues: Whether the court should answer the referred questions on the existing record or decline to answer and remit the matter for fresh factual determination.

Analysis: The questions concerned whether the disputed expenditure on maintenance of horses, carriages, motor cars and trustees' allowances formed part of the income applied for religious and charitable purposes or constituted allowable expenditure in computing income. The record did not show that the factual issue had been fully examined by the assessing authority, and the matter required consideration of the actual purpose and nature of the expenditure, including fresh evidence if necessary. In these circumstances, the court treated the controversy as one requiring proper fact-finding before any answer could be returned on the reference.

Conclusion: The court declined to answer the referred questions and remanded the matter to the Tribunal for fresh decision and further reference to the Assessing Officer if necessary.

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