TaxTMI 
TaxTMI 
1969 (5) TMI 17
X X X X Extracts X X X X
X X X X Extracts X X X X
....he assessee the interim stay of proceedings was vacated. It was recorded in the said order that part of the income of the assessee which would be proved before the income-tax authorities to have been applied in connection with, (a) feeding of the poor, (b) subscription to other charities enuring for the benefit of the public, would be exempted under section 4(3)(i) of the Indian Income-tax Act, 1922. This order, however, was made without prejudice to the rights and contentions of the parties and particularly of the rights of the assessee to claim other exemptions before the income-tax authorities as allowable under the law either under section 4 of the Indian Income-tax Act, 1922, or under any other section of that Act or any other provision of law. For assessment for the year 1956-57, the Income-tax Officer was of the opinion, on the construction of the said will, that besides directions for spending amounts on charitable objects, the will had also provided for payment of certain fixed allowances to the acting shebaits as well as the widows of the deceased shebaits, maintenance of horse drawn carriages and motor cars for the use of the shebaits, medical aids to the shebaits and t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g all the expenses and paying the various sums to be paid under the aforesaid will was to be appropriated and disbursed for charitable purposes like feeding of the poor and distribution amongst the poor and as such it held that such surplus was exempt from taxation under section 4(3)(i) of the Indian Income-tax Act, 1922. It was further contended on behalf of the assessee that, since all the properties of the debutter estate came from Raja Rajendra Mullick, the benefits therefrom must also be appropriated according to the terms of the will and that the only beneficial interest that was received by the deity under the will was the meeting of the expenses incurred for performing the various pujas and ceremonies connected with the aforesaid deity and the only income on which the deity should be assessed would be the value of the benefits the deity derived under the will, i.e., the expenses incurred for his seva puja, etc. It was urged before the Tribunal that the rest of the income had been diverted by the terms of the will to be spent for other purposes and the shebaits had to incur the said expenses not on behalf of the deity but under the directions of the testator. In the alternat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....21st February, 1887, the Tribunal was right in rejecting the assessee's claim that the only incomes which could be subjected to income-tax in the hands of the deity, Sri Sri Jagannath Jew, are the beneficial interests of the said deity under the terms of the will as represented by the expenses incurred by the shebaits for the daily seva puja of the deity and the performance of the various religious ceremonies connected with the said deity as mentioned in the will ? (2) If the answer to the above question be in the positive, whether, on the facts and in the circumstances of the case and on a proper interpretation of the terms of the will of the late Raja Bahadur Rajendra Mullick, the Tribunal was right in holding that the expenses incurred for payment of remuneration, to the shebaits, and the monthly allowances paid to the widows of the deceased shebaits, as also the expenditure incurred for maintaining horses, carriages or motor cars for the use of the shebaits concerned and the annual value of such part of the debutter property as is being used by the shebaits and their families for the purpose of their residence, all in terms of their aforesaid will, could be included in the tot....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion of the list by the shebaits and trustees at least once in every five years. Thereafter the will directs that the worship of the Thakur Sri Sri Jagannathjew and other thakoors are to be held except otherwise provided duly in the thakoorbari and further directs that the worship of Sri Sri Radhakant Jew and other thakoors during the pala of the testator or term every third year to be held in the thakoorbari. The testator then directs that the worship of Sri Sri Jagannathjew should be performed at least once in every year in the dallan of the house in which he at that time resided and which he had made debutter. The testator directs the worship of certain other thakoors and periodical celebrations of Lachmee puja and also directed rathajatra and dol to be held on the north of the said house as he had performed. The testator further directs that the dwelling house was to be used for the feeding of Brahmins, for assembly and feeding of his caste men and other persons for parties on the occasion of the various festivals and festivals and pujas and the sradhs of his father, mother and his ancestors and that of his wife and other members, for the marriages and other ceremonies of the m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....baits and other trustees should I not build the same in my lifetime to build an additional frontage on the east side of the thakoorbari and make other improvements thereon and also to build a hall or a covered place for the feeding or distributing of food to the poor either separately or in conjunction with any other building. " The testator thereafter provided that for the building a sum not exceeding Rs. 75,000 should be spent. The testator directed that the said shebaits and trustees would be at liberty with their families to occupy convenient rooms in the said debutter house to be allowed to them by the shebaits and trustees for the time being and if the accommodation is not sufficient the testator provided, that such additional building as the shebaits or the trustees think fit and proper may be constructed at such sums not exceeding Rs. 75,000. The testator thereafter provided that the trustees or the shebaits were to collect the income of the whole of the debutter property and out of this they should first pay the Government revenues, taxes, rates and another outgoings and maintain and keep the said properties including the thakoorbari and debutter houses and garden in good....
X X X X Extracts X X X X
X X X X Extracts X X X X
....further provides that no shebait and trustee would lose the right to receive the remuneration or to reside in the dwelling house due to incapacity arising from illness and not from unwillingness on his part, to perform sheba. Thereafter the testator made provisions for the widows of the other descendants of the testator and those who assist in the work of preparing articles of offerings to the Thakoor and for the feeding and distribution to the poor. The testator further stated that all the shebaits to be appointed in future and those who assist in the like manner should be fed and clothed and maintained and should receive a sum of Rs. 50 each month from the income of the debutter and should be allowed to reside in the debutter house. The testator further provides that the wives of the eldest and youngest sons of the testator should also work in the like manner and the future wives of the future sons who were also expected to work in the like manner would not receive remuneration during the respective husbands' lifetime as their husbands would be receiving, remuneration for working as shebaits. The testator thereafter provides : " I direct that after defraying all the various sums....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in the sense that all these vested in the deity. Learned counsel urged that the immovable properties specified at pages 12 and 13 of the paper book, as well as Government securities, jewels, gold, etc., mentioned in the will have been vested in the trustees for the purposes of the different trusts mentioned in the will, one of which is the worship, puja and ceremonies of this deity. Therefore, Mr. Deb urged, that the only incomes on which the deity should be assessed would be the value of the benefits the deity received under the will, which Mr. Deb conceded, would also include, apart from expenses for seva, puja, etc., the value of residence of the deity in the temple. Learned counsel submitted that the opening words in a will are not conclusive---the whole will has to be considered to find out to whom the substantial benefits under the will go. Mr. Deb took us through the various provisions of the will, and submitted that the expression " debutter properties " used in various places do not militate against the construction that the properties were vested in the trustees for the purpose of debsheba. He submitted that the testator has very carefully chosen the expressions " trust ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....manner as to show an intention of benefitting his family in perpetuity. " His Lordship further observed at page 305 : " Where I do agree with Mr. Roy is that, notwithstanding that, in my opinion, a Hindu can employ English machinery and, therefore, create a 'trust' for the benefit of a deity, the fact that he has used words more or less appropriate to an English trust is not conclusive. It must be a matter of inference on the documents and the facts of each particular case whether the benefactor intended to adopt the one or the other method : 'trust' or 'endowment'." Learned counsel for the assessee then relied on the decision in the case of Sonatun Bysack v. Smt. Juggotsoondree Dossee. There what had happened was one Ramdas Bysack, a Hindu inhabitant of Dacca, gave all his movable and immovable property to his family idol ; and after stating that he had four sons, he directed that his property should never be divided by them their sons or grandsons in succession, but they should enjoy " the surplus proceeds only " and the will after, appointing one of the sons as manager to the estate to attend to the festival and ceremonies of the idol directed that the surplus, after deductin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....depending upon the use of particular terms of the will for the determination of the question whether the will of this nature save the testator's estate to an idol subject to a charge in favour of the heirs of the testator or made the gift to the idol a charge upon the estate. The question depended upon the construction of the will as a whole. In those circumstances Mr. Deb contended that the question No. 1 referred at the instance of the assessee should be answered by us in the negative. Mr. Deb thereupon relied on the decisions of the cases of Bejoy Singh Dudhuria (Raja) v. Commissioner of Income-tax, Commissioner of Income-tax v. Sitaldas Tirathdas, Murlidhar Himatsingka v. Commissioner of Income-tax, and contended that in the facts and circumstances of this case, if the answer to the question No. 1 mentioned hereinbefore was in the affirmative then on the construction of the will the question No. 2 should be answered in the negative. Learned counsel submitted that the expenses for the purposes mentioned in question No. 2 was of such a mature that it resulted in diversion of the income before it reached the assessee. In view of the provisions of the will, learned counsel submitt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y an intention not to vest the property in the idol in the ideal sense in which according to the concept of Hindu law a deity is capable of holding property. Mr. Pal submitted that the main thing to consider is whether the surplus of any portion of the income given to the deity or intended to be given to the deity, has been reserved either for the testator or his descendants, or for any object not allied to the object of debsheba. If there was no such reservation of surplus, learned counsel submits, and where clear language has been used by the testator as mentioned hereinbefore, we must hold that the entire property was conveyed to the deity. Mr. Pal submitted that the provisions which gave the trustees liberty to do such other additional acts of worship, puja and sradhs and ceremonies indicate that the trustees were entitled to spend more on the objects of the debsheba of the assessee. Mr. Pal relied on the decision of the Supreme Court in the case of Nirmala Bala Ghose v. Balai Chand Ghose. There the Supreme Court had held that the question whether a deed of dedication creates an absolute or partial dedication must be settled by a conspectus of all the provisions of the deed. It....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that the surplus amount remaining after meeting the cost of worship should be accumulated. The deed then provided for the residence of the shebaits and in cases of shebaits dying provisions were made for the widows of the shebaits. The suits were instituted by one Balai raising the plea that the deed was a mere colourable document and was never acted upon. The only question that was urged before the Supreme Court was whether the deed was partial or complete. In those circumstances the Supreme Court held as mentioned hereinbefore. The Supreme Court observed at page 561 of the report : " It is inexpedient to construe the terms of one deed by reference to the terms of another, or to lay down general rules applicable to the construction of settlements varying in terms. In construing a deed, the court has to ascertain the intention of the settlor, and for that purpose to take into consideration all the terms thereof. " Reliance was also placed by Mr. Pal on the decision of the Calcutta High Court in the case of Official Trustee of West Bengal v. Commissioner of Income-tax, where it was observed by Sinha J. (as his Lordship then was) that under the Hindu law, endowments for religious p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rring any title to some one other than the assessee ? (b) Is that title of the other person superior to that of the assessee ? (c) Has the assessee no control over the money ? It was urged that if there was no such superior title created but the income becomes the income of the assessee and thereafter the assessee has an obligation to spend certain amount for the benefit of certain objects or of a third party that would merely be an application of the income of the assessee. In those circumstances there cannot be any question of diversion of income of the assessee. Mr. Pal, apart from relying on the cases to which reliance was made by Mr. Deb, referred us to the decision in the case of P. C. Mullick (Executor) v. Commissioner of Income-tax. There a testator had by his will appointed the assessees his executors and had directed them to pay Rs. 10,000 out of the income of his property on the occasion of his addya sradh for expenses in connection therewith to the persons who were entitled to perform the sradh. He had also directed them to pay out of the income of his property the cost of taking out probate of his will. During the year of account the executors had paid Rs. 5,537 for....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at the deed was intended only to create a charge in favour of the deity. In all cases it is necessary to find out the intention from the whole deed. (e) There is no fixed rule of construction depending upon the use of any particular terms. (f) If the property is wholly dedicated to the worship of the idol and no beneficial interest is reserved to the settlor, his descendants or other persons the dedication is complete but if in the deed it is found that there is only a charge in favour of the deity and beneficial interest is reserved either to the settlor, his descendants or to other persons or objects the dedication is partial. (g) The provisions for remuneration or maintenance and residence of the shebaits are not factors indicating that the property was not intended to be vested in the idol. (h) A property may be given to the deity either by creating a trust in the technical sense of the term or by dedication to the deity and vesting the property in the idol. (i) The expression " trust " is often used in general sense and when shebaits are enjoined to perform certain functions in relation to the deity they also discharge duties in the nature of trust. (j) The use of the ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd what is required for the purposes of the idol. Substantial benefits under the will go to objects, other than those of the idol or objects not necessarily associated with the Sheba of the deity. Even though there has been no reservation of any beneficial interest either to the settlor or his descendants, there has been reservation of the beneficial interests in favour of objects other than those of the idol. In this context it is necessary to examine in what sense the expressions " trust " or " trustee " have been used. The testator has given directions for Sheba or religious trust created by him, but states clearly that the trustees or the shebaits would have no individual interest in the trust. Inasmuch as shebaitship is a property with certain incidents of property, this provision is more indicative of the fact that the expression " trust " and " trustee " have been used in technical sense. The testator specifically appoints trustees of the properties dedicated. Thereafter the testator states that when a new trustee or shebait is appointed he should on taking up the appointment of a shebait and trustee sign a declaration in writing that he is a follower of Hindu religion " and....