9911796707
TMI Blog1954 (9) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... ken into account, that the Imambara is held under a trust wholly for religious purposes, and, therefore, the income derived from it is exempt from taxation, that the income from forest produce is agricultural income and that the rate at which collection charges have been allowed is unduly low. On the above contentions four questions have been referred to this Court. I shall take them one by one. The first question reads as follows :- Whether on the above facts and in the circumstances of this case the income of the properties styled as 'State properties' is not liable to be taxed under section 9 of the Indian Income-tax Act ? The question is based on a misconception. Although at one time there were certain properties which were given the name of State property, there are no such properties at the present moment. All properties which were once called State property and other properties purchased with the sale proceeds of jewels from a certain stock of jewellery are now of the same class and their incidents are the same. If there be other properties purchased with the personal income of the Nawab Bahadur or with money provided by him from other sources, the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... themselves to the condition of the impoverished and encumbered nobility familiar in many countries. As the first step towards taking permanent measures in that behalf and placing the Nawab Nazims on a footing of financial stability the Act provided for the appointment of a Commission and by section 12 charged the Commissioners to ascertain what jewels and immovable properties were held by the Government of India for the purposes of upholding the dignity of the Nawab Nazim for the time being. In due course the Commissioners submitted a most illuminating and instructive report, to which the added six schedules. Schedules I and II set out what was described as State property and the nature of those properties was stated to be that they were properties which had been originally designed for the maintenance of the title and dignity of the family and which were being held by the Government of India for the same purpose. The interest which a Nawab Nazim for the time being had in those properties was not his private or personal interest which he could relinquish or convey at his pleasure, but he was only entitled to the enjoyment of the profits and the properties were really appanages of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te property; and all property becomes State property which is acquired by the Nawab Nazim by reason of his holding the dignity. Property acquired by the Nawab Nazim by purchase or by gift to himself is his own and may be alienated as freely as it is acquired ; but if it is not alienated and on the death of the Nawab Nazim passes to the successor appointed by Government because it belonged to the deceased Nazim, it becomes State property. It will thus be seen that by describing certain properties as State property, the Commissioners did not mean that they belonged to the Government. What they meant was that the properties belonged to the State of Murshidabad if any such thing could be conceived of as distinguished from the individual who might for the time being be the Nawab of Murshidabad and their function was to serve as a permanent source from which the successive Nawab Nazims might be supplied with the means of maintaining the dignity and state of their office. One sees in that concept the well-known division between State property and personal property of the Ruler of a State which has been explained by the Judicial Committee on several occasions, notably in the Tippera St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with and subject to the incidents, powers, limitations and conditions as to inalienability and otherwise hereinafter contained. The deed of settlement was confirmed by Act XV of 1891 of which it was made part. The deed itself provided that the Nawab Bahadur or any of his successors to the titles held by him would have no power to sell, mortgage, devise or alienate the properties or any of them otherwise than by lease or demise, the terms and conditions of which have been previously approved by the Governor of Bengal in Council. The words I have quoted were substituted by Act XXV of 1923 for the words for a term not exceeding twenty-one years and under a rent without bonus or selamee. It was provided further that if the Nawab Bahadur or any of his lineal heirs male successors to the titles should at any time, in contravention of the terms of the deed, attempt to sell, mortgage, devise or alienate otherwise than in the approved manner any of the immovable properties, referred to in the deed, or should by a course of extravagance or by waste or mismanagement of the properties disable himself from duly maintaining the dignity of his position and station, then the Secretary of Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment to transfer or deal with the properties in any manner at their pleasure, but it is clearly impossible to contend that the Government have any right of ownership in the properties. It appears to me that the notion that the properties belonged to the Government arose from a confusion as to what the term State property in the report of the Commissioners meant and because the word State was taken as meaning the. Government of the country, whereas it really meant the State of Murshidabad or the State of the Nawab Nazim. The Government of the country were not the owners of the property at any time and they are not the owners now. Dealing with the deed and Act XV of 1891, Pearson and Mallik, JJ., observed in Civil Partition Case No. 1251 of 1931 decided on the 29th February, I932,(unreported)as follows:- There is nothing here to confer any rights of ownership or disposition on the Secretary of State with or without the concurrence of the Nawab Bahadur. With respect, it appears to me that the learned Judges held rightly that any right of ownership in the Government was out of the question. If the ownership be not in the Government, it must be in some one and it appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Nawab Bahadur. It is now settled law, observed Maxwell, that the title of a statute is an important part of the Act and may be referred to for the purpose of ascertaining its general scope and of throwing light on its construction. This rule seems to apply alike to the 'long' and the 'short' title. (See Maxwell, on Interpretation of Statutes, Ninth Edition, page 44). I need only add that the properties with which the Murshidabad Estate Administration Act is concerned are immovable properties of the estate and that term had been denned in the Act as meaning the properties contained in the Schedules to the indenture included in and confirmed by the Act of 1891, together with certain subsequent additions. They there/ore, are the same properties as those specified in Schedules I and II of the report of the Commissioners and Schedules of the same numbers to the deed of settlement as also those specified in Schedule III to the deed. Some light may also be drawn from references to the properties and the status of the Nawab in judicial decisions. In the case of Nawab Bahadur of Murshidabad v. Karnani Industrial Bank, Limited [1931] L.R. 58 I.A. 215, it w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... swers to that contention. In the first place, it is wrong on the facts. The contracting parties to the deed are the Secretary of State on one part and Sir Syed Hussan Ali, the Nawab Bahadur of Murshidabad, on the other part, who was no longer the Nawab Nazim. In the second place, it will appear from section 6 of the Act of 1891 that the indenture is to be treated as duly stamped and registered under all relevant enactments and admissible as such. If the deed was a deed between sovereign and sovereign, it was not necessary to save it from the effect of non-registration or nonpayment of stamp duty by a special provision like section 6. It was lastly contended by Mr. Bose that the word owner in section 9 of the Income-tax Act meant a full owner and not a limited owner and he relied upon the decision of Commissioner of Income-tax, Punjab v. Dewan Bahadur Dewan Krishna Kishore [1941] 9 ITR 695. In that case, the Judicial Committee observed that what section 9 contemplated was the owner of the property and not the owner of the annual value of the property, but that remark was made in connection with the property which was an impartible estate descending by the rule of primogeniture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on takes us any further. On the general reasons I have given, I am of opinion that the assessee in the present case was rightly regarded as the owner of the properties and was rightly assessed in respect of them under section 9. The second question reads as follows :- Whether on the above facts and in the circumstances of this case the income of the Imambara is exempt from taxation under section 4 (3)(i) of the Indian Income-tax Act ? In view of the findings recorded by the Tribunal the question is capable of only one answer. It has been found that the assessee owns thclmambara and that it had not been established that the Imambara was one endowed for a public religious or charitable purpose or that any portion of it was mausoleum or a tomb. It has also been found that there is no evidence that the Maharam is celebrated in it or if it is celebrated, the public are entitled to participate in the celebrations. The municipality, it has been found further, had not exempted the Imambara from the general tax. I am unable to see how, in view of those findings which we must accept and proceed upon, it can beheld that the income from the Imambara was exempt from taxation. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
