Trust income for family maintenance is not charitable where the deed is not confined to indigence or public utility.

Income applied under a trust deed for the maintenance and support of the settlor's family members and relatives was held not to qualify as wholly charitable. The deed specifically directed one-third of net income to family maintenance, and the trustees' additional discretion to help "deserving" persons was not confined by any requirement of indigence, poverty, or public utility. Subsequent trustee resolutions could not alter the trust's terms. On that basis, the application of income to family support fell outside the statutory definition of charitable purpose under section 4(3)(i) of the Indian Income-tax Act, 1922, and exemption was denied.

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Issues: Whether income applied from trust property towards the maintenance and support of the members of the settlor's family and relatives, including persons considered deserving by the trustees, was exempt under section 4(3)(i) of the Indian Income-tax Act, 1922.

Analysis: The trust deed expressly provided that one-third of the net income was to be applied towards the maintenance and support of the members of the Shervani family and relatives. The additional discretion given to the trustees to support persons considered deserving was not limited by any requirement of indigence, poverty, or public utility. The subsequent resolutions of the trustees could not override the terms of the trust deed. Income applied for the maintenance of family members was therefore not income applied wholly for charitable purposes, and the discretionary power to assist others was also not shown to be confined to charitable objects within the statutory definition of charitable purpose.

Conclusion: The income spent on the maintenance and support of the members of the family and relatives was not exempt under section 4(3)(i) of the Indian Income-tax Act, 1922, and the answer to the reference was against the assessee.

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