1982 (7) TMI 192 - AT - Income Tax

Tribunal upholds validity of wakf declaration without registration, excludes property income.

Jalal Kalilur Rehman. Versus Fourth Income-Tax Officer.

The Tribunal ruled in favor of the assessee, holding that the oral declaration of wakf made in 1947 was valid and confirmed by the wakf deed dated ... Accumulated Profits, Partnership Deed, The Constitution Issues:1. Validity of oral declaration of wakf in 1947.2. Validity of wakf deed dated 30-9-1965.3. Requirement of registration under Indian Registration Act for wakf deed.4. Effectiveness of wakf registration under Wakf Act from the date of notification.Detailed Analysis:1. The first issue revolves around whether the assessee created an oral declaration of wakf in 1947. The department disputed this claim based on the Commissioner's order for the year 1974-75. However, the wakf deed dated 30-9-1965 confirms the earlier oral declaration made in January 1947. The deed clearly states the intention of the assessee to dedicate the property for wakf purposes. The Commissioner's reliance on the absence of a written declaration in 1947 is misplaced, as the oral declaration sufficed and was later confirmed in writing in 1965.2. The second issue concerns the validity of the wakf deed dated 30-9-1965. The department argued that the deed must be registered under the Indian Registration Act for validity. However, the Tribunal held that the deed merely confirmed the earlier oral declaration of wakf made in 1947. The deed's purpose was to document the terms of the wakf, not to create it anew. Therefore, registration under the Indian Registration Act was not necessary for the validity of the wakf.3. The third issue addresses the requirement of registration under the Indian Registration Act for the wakf deed. The Tribunal clarified that while a deed conveying immovable property of Rs. 100 or above requires registration, in this case, the deed dated 30-9-1965 did not create the wakf but confirmed an existing oral declaration from 1947. As such, registration under the Indian Registration Act was not essential for the validity of the wakf.4. The final issue pertains to the effectiveness of wakf registration under the Wakf Act from the date of notification. The department argued that the wakf would take effect only from the date of registration, not earlier. However, the Tribunal emphasized that the purpose of the Wakf Act is to regulate wakfs and ensure proper administration, not to determine the wakf's validity. The wakf created in 1947 was evidenced by the deed dated 30-9-1965, and its existence was not dependent on the date of registration. Therefore, the Tribunal upheld the claim that the income from the wakf property should not be included in the assessee's total income for the relevant years.In conclusion, the Tribunal allowed the appeals, ruling in favor of the assessee based on the validity of the oral declaration of wakf in 1947 and the confirmation through the deed dated 30-9-1965, without the necessity of registration under the Indian Registration Act for the wakf deed.