Charitable exemption denied where community property was not held wholly for religious or charitable purposes.

Income from property vested in the head of a community was not exempt under Section 4(3)(i) of the Income-tax Act, 1922, because the trust deeds showed application to mixed community, social, commercial and political objects rather than exclusive religious or charitable purposes. The property was not shown to be wholly held under a trust or legal obligation for such purposes, and no identifiable part was specifically set apart for exclusive charitable or religious use. Reliance on an earlier deed also failed because the property covered by that deed was not linked by evidence to the property under assessment. The assessment was therefore upheld.

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Issues: Whether the income derived from property vested in the head of the community was exempt from income tax under Section 4(3)(i) of the Income-tax Act, 1922, as property held under trust or other legal obligation wholly for religious or charitable purposes.

Analysis: The income was shown by the trust deeds to be applicable to a wide range of objects, including agricultural, industrial, commercial and other pursuits of the community, entertaining guests, giving at-homes or parties, and donations or contributions for social, educational, industrial or political gatherings and public entertainments. These uses demonstrated that the property was not held wholly for religious or charitable purposes. No part of the property was shown to be specifically set apart and identifiable as exclusively applied to religious or charitable purposes. The later reliance on an earlier deed failed because no evidence identified the property covered by that deed with the property under assessment.

Conclusion: The income was not exempt from income tax under Section 4(3)(i) of the Income-tax Act, 1922, and the assessment was upheld.

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