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TMI Blog2001 (11) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... In the meanwhile, assessee's mother, Smt. Fathima Rahim fell ill and was admitted in the intensive care unit at Benziayar Hospital, Kollam and later to the Medical College Hospital, Trivandrum. The treatment was going on. Under these circumstances, the assessee could not comply with the notice. Anticipating harsh actions from the Assessing Officer, the assessee filed an O.P. before the Hon'ble High Court of Kerala and the High Court while disposing of the O.P. granted six weeks time from 19-1-2000 to enable the petitioner-assessee to file an appeal before the Income-tax Appellate Tribunal. The assessee's learned counsel submitted that the delay was caused on account of the illness of the assessee's mother and requested to condone the delay in filing this appeal. 3. We have heard the learned departmental representative as well. Considering the facts brought on record and also the further fact that the assessee had approached the Hon'ble Kerala High Court and the High Court granted six weeks' time to enable the assessee to file an appeal before the Income-tax Appellate Tribunal and the. attendant circumstances, we feel that the delay of 30 days in filing this appeal is to be condon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer issued a notice dated 19-11-1999 directing him to pay Rs. 26,23,721 together with interest thereon under section 32(2) of the Gift-tax Act, 1958 immediately. The notice was issued to the assessee, since the donees were jointly and severally liable to pay gift-tax due from the donors by virtue of the provisions of section 29 of the Gift-tax Act and for the further reason that the demand was outstanding for quite sometime. On receipt of the notice of the Assessing Officer, the assessee before us, viz., Sri Azad Rahim, approached the hon'ble High Court of Kerala by way of an O.P. and the Hon'ble High Court stayed collection of the outstanding demand and directed assessee, Sri Azad Rahim to file an appeal before the Tribunal within six weeks' time from 19-1-2000. Hence this appeal before the Tribunal. 8. While completing the assessment for the assessment year 1996-97 in the case of the assessee's mother, Smt. Fathima Rahim, the Assessing Officer noticed that as per settlement deed No. 1606 dated 20-4-1995, the assessee and her husband Sri A.A. Rahim had settled certain properties owned by them in favour of their children including a minor child as aforesaid. Of these items ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in question were referred to the Valuation Cell of the Department and the Valuation Officer estimated the value of the property gifted to the assessee, Sri Azad Rahim and others at Rs. 75,10,750 and after allowing the basic exemption of Rs. 3,00,000 arrived at the taxable gift at Rs. 74,80,750. Aggrieved by the above order, the assessee, Smt. Fathima Rahim approached the learned first appellate authority. 9. It was contended before the learned first appellate authority that section 2 of the Transfer m of Property Act, 1882, did not apply to Muslims who are governed by Mohammedan Law in the matter of gift. The learned representative of the assessee placed reliance on the section 2 of the Transfer of Property Act, 1882 to contend that the ingredients of a valid Mohammedan gift were absent in this case. The learned CIT (Appeals) overruled this objection. He held that though the document is called 'Dhanabishchayadharam', it was in fact, not so. It was clearly stated in this document that the 'Dhanabischayadharam' was in consideration of the natural love and affections the donor had to the donees and not otherwise. It was because of this, the gift was made. However, there was a rider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances, there cannot be a transfer of the impugned properties subsequently and there cannot be an acceptance of the gift. 12. Further, it is the case of the assessee that there are shop buildings and the Valuation Officer should have adopted rent capitalisation method for fixing the value under Schedule III of the W.T. Rules, 1957. The learned counsel for the assessee submitted that the trust was founded in the year 1977 and the trust started Malik Dinar Industrial Training Institute in the year 1977 in A Schedule properties allotted to Sri Ansar Rahim, another donee and Fathima College of Pharmacy in 1984 in B Schedule properties allotted to Sri Azad Ansar, the assessee in this appeal. In 1995 there was a family partition. Some of the properties belonging to late A.A. Rahim and the mother of the assessee were included in the partition, which were, in fact, said apart for the trust. Both the above educational institutions were assessed to tax even prior to the date of assessment made in the hands of the assessee's mother. In the light of the above facts, the assessee's learned counsel for the assessee submitted that in the ratio of the decision of the Hon'ble High Court of Kerala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not of much consequences. The transfer had taken place during the previous year. Therefore, the assessee who was a party to the document executed cannot now say that the document is unsustainable in law. The trust is a private trust without any exemption from tax. The learned department representative, relying on the decision of the Hon'ble Kerala High Court in the case of Makku Rawther's Children v. Manahapara Charayil AIR 1972 Ker. 27, submitted that a gift made for pious purposes or to pious persons by a Muslim for securing spiritual benefit, falling into well recognised categories familiar in his religion such as a gift to a person who is required to recite Quran for the good of the donor's family may be saved by section 129 of the Transfer of Property Act, but not a secular gift in this case, the Hon'ble High Court of Kerala held that secular gifts in order to be valid, require registration under the provisions of section 17 of the Registration Act. Hence, the learned departmental representative pleaded that the gift in the present case is exigible to tax. The learned departmental representative submitted that there is no doubt there is a gift. He further submitted that the me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her words, the trust can alienate the trust properties. 18. It is relevant to go through the alleged partition deed, which the assessee now contends, is invalid, as the properties had already been handed over to the trust. At page 4 of the partition deed 20-4-1995 it is mentioned- "The joint right, title and interest of persons named 1 to 7 and minor Muhammed Alim with all liabilities are extinguished and partitioned by this deed and from this day onwards each sharer shall separately possess and enjoy each schedule of property by payment of tax effecting mutation etc., as per this deed. Shares shall pay the municipal tax, panchayat tax, current charge, water charge etc., duly charged to their names and enjoy the shop rooms and godowns in separate possession. They shall have all rights of conveyance as per the schedule and shall possess and enjoy the same accordingly for ever. The property in A schedule which is aforesaid Malik Dinar Industrial Training College, building, equipments and other assets shall be full owned and occupied by the third named in his complete responsibility he shall continue the functioning with all income and expenditure dealt with by himself and all pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the word "Muslims." Section 2 of the Transfer of Property Act, 1882 further says that nothing in the second chapter of this Act shall be deemed to affect any title of Mohammedan Law. The reason for this provision is that some of the rules relating to Mohammedan Law differ from the general rules as to the transfer of property enacted in Chapter II of the Transfer of Property Act, 1882. As per Mohammedan Law a property may be settled in perpetuity for the benefit of his/her descendants provided there is an ultimate gift in favour of charity. Under the Mohammedan Law, writing is not essential to the validity of a gift, but delivery of possession or of such possession as the subject-matter of the gift is susceptible of is necessary for a transfer by way of gift. Further, section 2 of the Transfer of Property Act, 1882 saves some of the rules of Mohammedan Law. It does not necessarily follow that the general rules in Chapter II of the Transfer of Property Act cannot be made applicable to Mohammedan transfers at all. These rules are excluded only if there is an inconsistent rule of Mohammedan Law. Where there is no inconsistency between the laws, section 2 in Chapter II applies proprio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property they shall do so after obtaining the consent or permission of the first and second named in the deed as they also should be made signatories to the deed, along with 3 to 8 named. 22. In this connection, it is relevant to read section 164 of the Mohammedan Law, which is as under: 164. Gift with a condition.-- When a gift is made subject to a condition which derogates from the completeness of the grant, the condition is void, and the gift will take effect as if no conditions were attached to it." In the case of Muhammed Raza v. Abbas Bandi Bibi [1932] 59 IA 236, quoted by the learned author, Mulla on Principles of Mohammedan Law (Sixteenth Edition) [1968], at page 156, it is made clear that- "In the case of a gift, a restrict against alienation, whether absolute or partial, is void. In the case of a transfer for a consideration, it is valid if the restraint is partial, as where it is provided that the transferee shall not sell the property to any one but the members of the transferor's and transferee's family, but void if the restraint is absolutes." Here, in the instant case, it is only a restriction. Even if the condition is valid, because it is partial restrict ..... X X X X Extracts X X X X X X X X Extracts X X X X
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