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Applicability of provision of s. 11(1) (a) of the Act in the case of a disputed will. Analysis: The case involved a dispute regarding the applicability of s. 11(1) (a) of the Act to a will executed by an individual, Deviram Bhagat, for the utilization of incomes from his self-acquired properties. The key contention was whether the will created a valid religious trust for charitable or religious purposes or if it was purely for personal benefit. The Income Tax Officer (ITO) initially held that no trust was legally created, and even if it was, it was for personal purposes of the executors and beneficiaries, not charitable or religious. The Appellate Assistant Commissioner (AAC) concurred with the ITO's view, stating that the income from the property was not exempt from taxation under s. 11(1) (a) as it was primarily for Puja ceremonies, not a public religious trust. The assessee appealed, arguing that the endowment was created for the Seva-Puja of deities and was intended to benefit the general public, not just the family members. The counsel contended that the lower authorities misunderstood the provisions of the will and that at least 3/4th of the income intended for religious purposes should be exempt from taxation. The Departmental Representative, however, maintained that the will did not show any intention to create a trust for public benefit and that the properties under the will were part of a private estate. Upon careful consideration, the Tribunal analyzed the concept of religious endowment under Hindu Law, emphasizing that the dedication of property for religious purposes should be clearly specified and set apart for those purposes. The Tribunal found that the will met the essential conditions of a valid religious trust, as the property was designated for Seva-Puja of deities with clear direction and a separate house constructed for that purpose. The Tribunal held that the late Deviram Bhagat had indeed created a valid religious trust. Regarding the nature of the trust, the Tribunal observed that the worship of the deities was open to the general public, indicating a public religious trust. As the will specified 3/4th of the income for religious purposes, falling under s. 11(1) of the Act, the Tribunal directed the ITO to exempt that portion of the income from taxation. The Department's Cross-Objection was dismissed, and the assessee's appeal was partly allowed. In conclusion, the judgment clarified the legal intricacies surrounding the creation of a religious trust through a will, emphasizing the need for clear dedication and specified purposes. It established that the will in question did create a valid public religious trust, entitling a portion of the income to tax exemption under s. 11(1) of the Act.
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