Wakf income exemption denied where family maintenance predominated and charity was only contingent under income-tax law.

A wakf under which income was primarily reserved for the settlor and his children, with only a contingent or secondary application to religious or charitable uses, was not property held wholly for religious or charitable purposes within section 4(3)(i) of the Income-tax Act, 1922. The expression was construed in its general sense, not by reference to the assessee's personal law, and the Wakf Validating Act, 1913 did not alter the binding effect of the earlier Privy Council position. The income was therefore not exempt and remained assessable to income-tax.

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Issues: Whether property dedicated under the wakf was held wholly for religious or charitable purposes within the meaning of section 4(3)(i) of the Income-tax Act, 1922, so as to exempt the income from tax.

Analysis: The statutory expression was construed as having a general meaning and not by reference to the assessee's personal law. On that approach, a trust under which the income was primarily reserved for the maintenance of the settlor and his children, with only a contingent or secondary application to religious or charitable uses, could not be treated as property held wholly for religious or charitable purposes. Even if Mohammedan law were applied, the earlier Privy Council authority remained binding and the Wakf Validating Act, 1913 did not alter the position so as to make such a dedication wholly charitable or religious for income-tax purposes.

Conclusion: The income was not exempt under section 4(3)(i) of the Income-tax Act, 1922 and remained assessable to income-tax; the answer was against the assessee and in favour of the Revenue.

Ratio Decidendi: A wakf that substantially reserves income for the settlor and his family is not property held wholly for religious or charitable purposes merely because it contains an ultimate or contingent charitable element.

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