9911796707
TMI Blog2000 (4) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... ADRI. JUDGMENT The judgment of the court was delivered by SYED SHAH MOHAMMED QUADRI J.--- These appeals arising out of two reference cases under section 27(1) of the Wealth-tax Act, 1957, decided by the High Court of Andhra Pradesh, give rise to a common question of law. The appellants are the assessees. Civil Appeal No. 2328 (NT) of 1995 is against the order of the Division Bench of the High Court in R. C. No. 192 of 1980 dated March, 24, 1987 (reported in [1988] 171 ITR 323), pertaining to the assessment years 1974-75 and 1975-76. Following the said order, the High Court disposed of R. C. No. 292 of 1982 for the assessment years 1976-77 and 1977-78 which gave rise to Civil Appeals Nos. 9269-9270 of 1995. H. E. H. the Nizam of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the territory of India. They read as under : "3. The trustees shall hold and stand possessed of the trust fund upon trust :---... (e) On and after the death of the settlor to hold the trust fund or the balance thereof then remaining and the unspent accumulations (if any) of the income of the trust fund and the investment thereof upon trust to expend or utilise the net income of the trust fund as well as the accumulations (if any) of the income thereof made during the settlor's lifetime and the investments thereof for all or any one or more of the following religious or charitable objects and purposes at Hedjaz and/or Iraq in such manner as the trustees may in their absolute discretion, think proper :---... (v) for constructing, esta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... City Civil Court, the properties of the trust were entitled to exemption under section 5(1)(i) of the Act from the (late of the order. The Revenue carried the matter in appeal before the Income-tax Appellate Tribunal. Holding that the assessee was not entitled to exemption under section 5(1)(i) of the Act, the Tribunal set aside the order of the Appellate Assistant Commissioner and allowed the appeal of the Revenue. At the instance of the assessee, the Tribunal referred the following question of law to the High Court for its opinion (at page 325 of 171 ITR) : "Whether, on the facts and in the circumstances of the case and on a proper construction of the scope and effect of the judgment of the Chief Judge of the City Civil Court, Hyderabad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious and charitable purposes outside India. The question whether the trust property enjoys exemption, under section 5(1)(i) of the Act, depends on its true interpretation. The provision is in the following terms : "5. (1) Subject to the provisions of sub-section (1A), wealth-tax shall not be payable by an assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee :-- (i) any property held by him under trust or other legal obligation for any public purpose of a charitable or religious nature in India : Provided that nothing contained in this clause shall apply to any property forming part of any business, not being a business referred to ill clause (a) or clause (b) of sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious nature outside India. This being the position, the contention of learned counsel is devoid of any substance and it is rejected. It is next contended that after the resolution of the board of trustees dated May 22, 1968, which has the approval of the Chief Judge, City Civil Court, the property must be deemed to be held for charitable or religious purpose in India. A perusal of the judgment shows that it is passed under section 34 of the Trusts Act. There is no gainsaying that the Trusts Act, applies only to private trusts and admittedly after the death of the settlor, on February 24, 1967, the trust became a public charitable and religious trust. However, learned counsel submitted that section 34 of the Trusts Act might be taken as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 34 of the Trusts Act does not satisfy the requirements of section 92 of the Code of Civil Procedure. Mr. Verma has relied on the judgment of this court in State of Uttar Pradesh v. Bansi Dhar, AIR 1974 SC 1084, to support his contention that application of the doctrine of cypress would not arise in this case. It cannot de disputed that when to give effect to a charitable and religious trust is impossible or impracticable initially or become so subsequently, the court will save the trust from falling by invoking the cy pres doctrine and utilise the trust property for some other charitable and religious purpose as near as possible to the object of the trust mentioned by the settlor. But having regard to the nature of the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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