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TMI Blog1971 (11) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... le to tax under either of those statutes. The first of these two trusts is known as the Azakhana Zohra Trust created by the Nizam under a trust deed dated March 29, 1951. In or about 1941, after the death of his mother, Zohra Begum, popularly known as Madar-e-Deccan, the Nizam in her sacred memory had constructed the Azakhana Zohra (mourning house) with Niazkhana (poor-feeding house) and Shafakhana (inpatient hospital) attached to it on the banks of the river Moosi in the vicinity of Dar-us-Shaffa. The Nizam, for purposes of the completion of that work, had set apart a sum of two lakhs of rupees from his private fund, Sharf-e-khas funds. It is with regard to this that the trust deed dated March 29, 1951, came into existence. In addition to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tember 14, 1950, settled a sum of Rs. 40 lakhs for their upkeep and maintenance. The dispute now relates to the exigibility to tax of the corpus as wealth under the Wealth-tax Act an the income from the endowed amounts under the Income-tax Act, the investments made under the above deeds. The claim of the department is that these are not religious and charitable trusts and the corpus and the income from the endowed amounts are not, therefore, exempt from the levy of either wealth-tax or income-tax, whereas the contention of the trustees is to the contra. The provisions that are attracted in these references are section 4(3)(i) of the Indian Income-tax Act 1922, section 11 of the Income-tax Act of 1961 and section 5(1)(i) of the Wealth-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also subjected to wealth-tax for the years, i.e., 1959-60 to 1965-66. With regard to the second trust, i.e., the Nizam's Supplemental Religious Endowment Trust, the department held that for the assessment year 1957-58 the trust was exempted from tax as it is entitled to the exemption under section 4(3)(i) of the Indian Income-tax Act of 1922, but subjected the income to tax for the years 1954-55 to 1956-57 and 1958-59 to 1961-62 under section 4(3)(i) of the Indian Income-tax Act of 1922 and for the assessment years 1962-63 to 1965-66 under section 11 of the Income-tax Act of 1961. Here also, the Inspecting Assistant Commissioner, following the decision of the Tribunal with regard to Azakhana Zohra Trust held that it was not a public reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st cannot be determined to be a private one. It is the object of the trust that has to be looked into. In this case, the trust deed itself says : " ....... of the religious and charitable considerations thereunto moving he the settlor doth hereby transfer and assign unto the Trustees the said sum of Rs. 2 lakhs, etc ...... " Though no words to the effect that they are meant for religious and charitable purposes are found in the deed itself, the buildings themselves by reason of the purpose for which they are intended indicate that they are meant for religious and charitable purpose. It is not denied that Azakhana Zohra is a mourning house, Niazkhana is a poor-feeding house and Shafakhana is a hospital. The names themselves are suggestive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period and the fact that one building is meant for mourning, another for the purpose of poor-feeding and a third for a hospital itself shows that they are meant for charitable purposes. Two of the letters received from the trustees also indicate that sacred relics and articles of religious significance which did not belong to the Nizam exclusively are kept there, that the Azakhana Zohra is a building meant for conducting religious ceremonies during the period of Moharram, kept open to the public irrespective of caste or creed and any one desirous of attending these, can do so without any restriction. In Bai Hirbai & Kesarbai Charitable and Religious Trust v. Commissioner of Income-tax, under similar circumstances, where two sisters of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal, as all of them had considered the nature of Azakhana Zohra Trust alone, obviously being under the impression that, if any part of the trust deed is for a private purpose, the whole trust is vitiated, forgetting that there are two distinct and separate trusts with two different endowments, though under the same deed. We find the second trust under this deed is for the management and maintenance of (1) Ashoorkhana-e-Kazami constructed by the settlor after the Seventh Imam in memory of the settlor's late son, Kazim Jah ; (2) Imambara where the sacred Alams and sacred relics are kept during Moharrum days and taken out during the procession and brought back for religious ceremonies and worship ; (3) Ashoorkhana-e-Abbasi constructe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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