Rectification of trust deed relates back to original execution; dominant charitable objects were sufficiently definite for exemption.

A rectification decree relating to a trust deed operates retrospectively, so the instrument must be read in its corrected form from original execution unless fraud or collusion is shown. Applying that principle, the rectified deed was treated as effective from the outset and was not displaced by the earlier interpretation. On the rectified terms, the trust's dominant objects, including housing and related facilities for workmen and other persons in need, together with education, medical relief and general public utility purposes, were sufficiently definite and fell within recognised charitable purposes. The trust was therefore treated as a public charitable trust and its income as exempt.

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Issues: (i) Whether the second rectification decree dated 10 May 1955 operated retrospectively so as to render the trust deed effective in its rectified form from the date of its original execution; (ii) Whether, on the deed as rectified, the trust was a public charitable trust and whether its objects were void for uncertainty.

Issue (i): Whether the second rectification decree dated 10 May 1955 operated retrospectively so as to render the trust deed effective in its rectified form from the date of its original execution.

Analysis: Rectification, when granted, relates back to the date of the instrument and the deed must be read as if originally drawn in its corrected form. The earlier interpretation of the trust deed after the first rectification did not control the meaning of the deed after the later and materially different rectification in 1955. The civil court had jurisdiction to rectify the unilateral trust transaction as the indenture was in substance a bilateral arrangement between the settlor-company and the trustees, and the decree could not be ignored in income-tax proceedings in the absence of fraud or collusion.

Conclusion: The second rectification operated retrospectively from the original execution of the deed.

Issue (ii): Whether, on the deed as rectified, the trust was a public charitable trust and whether its objects were void for uncertainty.

Analysis: For exemption, the property must be held under trust wholly or partly for charitable purposes. The definition of charitable purpose includes relief of the poor, education, medical relief and advancement of any other object of general public utility. The rectified objects showed a dominant purpose of providing housing and related facilities to workmen and other persons in need of help on account of poverty, along with education, medical relief and other public utility objects. The beneficiaries formed a sufficiently definite class and were not so uncertain as to invalidate the trust.

Conclusion: The trust was a public charitable trust, its objects were not void for uncertainty, and the income was exempt from tax.

Final Conclusion: The references were answered in favour of the assessee on the substantive issues, and the trust was held entitled to exemption for the relevant assessment years.

Ratio Decidendi: A rectification decree, including one passed in respect of a trust instrument, relates back to the date of execution unless fraud or collusion is shown, and a trust is charitable where its dominant and sufficiently definite objects fall within relief of the poor or other recognised charitable purposes.

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