Religious-purpose exemption for wakf property upheld where ancillary uses did not alter the original charitable character.

Income from Roza properties was treated as exempt where the properties were dedicated under a legal obligation wholly for a public religious purpose. The Tribunal found, as a matter of fact, that the wakf was confined to maintenance of the Roza and mosque and to observance of religious festivals, and that later use of surplus income for madrassas, a library and feeding pilgrims did not alter that character. In reference jurisdiction, the High Court could not reopen those factual findings in the absence of a proper challenge. On those findings, the income fell within the religious-purpose exemption under section 4(3)(i) of the Income-tax Act, 1922.

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Issues: Whether the income from the Roza properties was exempt under section 4(3)(i) of the Income-tax Act, 1922 on the ground that the properties were held under a legal obligation wholly for a religious purpose.

Analysis: The properties were found to have been dedicated for the maintenance of the Roza and mosque and for the observance of religious festivities such as Urs and death anniversaries. The Appellate Tribunal had found, as a matter of fact, that the original object of the wakf was confined to these religious purposes and that the later use of surplus income for madrassas, a library and feeding pilgrims did not alter the original character of the wakf. In a reference under the Act, the High Court was not justified in reopening or disturbing that factual finding in the absence of a proper challenge to it. On the facts found, the property was held for a wholly religious purpose of a public character.

Conclusion: The income was exempt from assessment under section 4(3)(i) of the Income-tax Act, 1922 and the answer to the reference was in the affirmative, in favour of the assessee.

Ratio Decidendi: Where the appellate fact-finding authority concludes that property is dedicated wholly for a public religious purpose, later ancillary or supplementary uses do not destroy the exemption, and the High Court in reference jurisdiction cannot reassess those factual findings as if sitting in appeal.

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