Separate assessment of deity shares and no exemption for vague charitable use of trust income under the 1922 Act.

Where trust property vests in named deities with ascertainable shares, the income is attributable to each beneficiary separately and cannot be assessed at the maximum rate as though it belonged to an undivided body; the trustee's role in collection and administration does not displace the deities' beneficial ownership. The income had to be assessed separately on each deity's share. Sums applied by trustees to charitable purposes not specifically directed by the deed were not exempt under the 1922 Act, because a vague or indefinite charitable application did not satisfy the requirement of a definite trust direction for public benefit. Those amounts remained taxable.

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Issues: (i) whether the income of the trust properties held for named deities was liable to be assessed at the maximum rate under the first proviso to Section 41(1) of the Income-tax Act, 1922, or was required to be separately assessed in respect of each deity's share; (ii) whether sums spent by the trustees on charitable purposes not specifically mentioned in the trust deed were rightly excluded under Section 4(3)(i) of the Income-tax Act, 1922.

Issue (i): whether the income of the trust properties held for named deities was liable to be assessed at the maximum rate under the first proviso to Section 41(1) of the Income-tax Act, 1922, or was required to be separately assessed in respect of each deity's share.

Analysis: The trust deeds showed that the properties were vested in the deities and not in the trustee. The deities were named beneficiaries, their shares were not uncertain in law, and the law attributed equal shares to them, treating them as tenants-in-common. The trustee held and administered the income, but the beneficial ownership remained with the respective deities. The liability under Section 41 was therefore the liability of the beneficiary and not of an undivided collective body.

Conclusion: The income was not liable to be assessed at the maximum rate under the first proviso to Section 41(1); it had to be assessed separately according to the individual income of each deity in each group.

Issue (ii): whether sums spent by the trustees on charitable purposes not specifically mentioned in the trust deed were rightly excluded under Section 4(3)(i) of the Income-tax Act, 1922.

Analysis: The trust deeds did not contain any definite direction requiring application of income to specific public charitable objects. A mere application of income by the trustee in a particular year to charitable purposes did not itself establish that the income enured for public benefit within the meaning of the exemption provision. The clause relied on was too vague and indefinite to justify exclusion of such amounts from assessable income.

Conclusion: The sums spent on such charitable purposes were wrongly excluded under Section 4(3)(i) and remained taxable.

Final Conclusion: The reference was answered by holding that the deities were separately assessable on their respective shares, while the claimed exclusion for charitable expenditure not specifically provided for in the deed was disallowed.

Ratio Decidendi: Where a trust vests property in named deities with ascertainable shares, the income is assessable separately in respect of each beneficiary's share, and exemption for charitable application of income requires a definite trust direction for public charitable purposes.

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