Trust deed construction confirmed exemption for income applied only to religious and charitable purposes.

The wakf deed had to be construed as a whole, with the operative clauses determining the true character of the endowment. The phrase "or otherwise" in clause 6 was read ejusdem generis with "religious, pious or charitable", so it did not widen the objects beyond that class. Clause 14 was treated as a standard covenant for title and quiet enjoyment and could not override the substantive trust terms. On that construction, the properties were held under a legal obligation to apply the income only to specified religious and charitable purposes, and the trust income was exempt under section 4(3)(i) of the Income-tax Act, 1922.

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

Analysis: The deed of wakf had to be read as a whole, with the operative clauses governing the true nature of the endowment. The expression "or otherwise" in clause 6 was read ejusdem generis with the preceding words "religious, pious or charitable", so it did not enlarge the permitted objects beyond that class. Clause 14 was treated as containing the usual covenants for title and quiet enjoyment, which could not override the operative provisions of the deed. On a proper construction, the Mullaji Saheb held and administered the properties only under a legal obligation to apply the income to the specified religious and charitable purposes.

Conclusion: The income of the assessee-trust was exempt under section 4(3)(i) and the question was answered in the affirmative, in favour of the assessee.

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