9911796707
TMI Blog1968 (10) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... ut 50 acres of land in his individual capacity, besides certain other properties as mutawalli of a wakf. These latter properties were endowed as wakf by the petitioner himself for the benefit of his wife and six minor children and their descendants from generation to generation, and on the total extinction of all the descendants, for the benefit of an orphanage in Tellicherry called Dharusalam Yathimkhana or, in its absence, for any other Muslim orphanage in Malabar. There was a provision that out of the income of the endowed properties, after meeting all expenses, a sum of one anna in the rupee was to be spent by the mutawalli-the petitioner himself-for the support of orphan boys and girls in Tellicherry. On these provisions, the Agricultu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of general public utility." The ancestry of the section may be traced to section 4(3)(i) of the Indian Income-tax Act, 1922, which, in so far as it is material, reads as follows : " 4. (3) Any income, profits or gains falling within the following classes shall not be included in the total income of the person receiving them : (i) Subject to the provisions of clause (c) of sub-section (1) of section 16, any income derived from property held under trust or other legal obligation wholly for religious or charitable purposes in so far as such income is applied or accumulated for application to such religious or charitable purposes as relate to anything done within the taxable territories, and in the case of property so held in part only f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ligious and charitable purposes must follow. It was conceded before the Tribunal that a valid wakf as known to the Muslim law had been created by the deed in question. The question regarding the eligibility for exemption of income arising from what may be called private wakfs (Wakf-Alal Aulad), as known to Mohammedan law, has come before the courts, under the Indian Income-tax Act of 1922, on several occasions. Till the passing of the Mussalman Wakf Validating Act of 1913, the settled position was that there can be no valid dedication by way of wakf unless it was pre dominantly one for a charitable purpose. If the dominant object was to perpetuate the property in the family of the settlor, or to use it for the aggrandizement of the settlor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on between a " pious " purpose on the one hand, and a " religious " and " charitable " purpose on the other. It was ruled that the income in question cannot be held to be income derived from wholly religious or charitable purposes, within the meaning of section 4(3)(i) of the Act. The decision was referred to, and the same conclusion that a private wakf is not entitled to exemption under section 4(3)(i) of the Income-tax Act was reached by a Full Bench of the Madras High Court in Commissioner of Income-tax v. M. Jamal Mohamed Sahib. This decision noticed that the words in the last clause of section 4(3)(i) of the Income-tax Act, denying exemption to income of a private religious trust which does not ensure for the benefit of the public, wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d question, the matter was argued before the Tribunal, and before the Appellate Assistant Commissioner of Income-tax, with respect to section 9(2)(b) of the Agricultural Income-tax Act, which reads as follows : " 9. Income from settlement, disposition, etc.-. . . . . (2) In computing the total agricultural income of any individual for the purpose of assessment there shall be included- . . . . (b) so much of the agricultural income of any person or association of persons as arises from assets transferred otherwise than for adequate consideration to the person or association by such individual for the benefit of his wife or minor child or both. " It was not contended that the section is not attracted to the case on hand. Reliance was plac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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