TMI Blog1991 (4) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... ome time in November, 1940, to clarify the position and the status of the said Sansthan and the managing trustee vis-a-vis the State. The objects of the trust have been mentioned in section 4 of the Sangli Ganapati Panchayatan Sansthan Act (Act No. XVIII of 1940) (hereinafter referred to as "the Act"). The objects include "the worship of the God Shri Ganapati and associated deities together called the Ganapati Panchayatan which worship includes the performance of all festivals and ceremonials traditionally performed and for the maintenance, upkeep, repairs and expansion of the temple buildings and the premises for the dissemination of religious, philosophic and spiritual knowledge and for such other charities of a religious nature as the managing trustee may, in his discretion, deem fit." That Act was amended in the year 1947. When the Bombay Public Trusts Act, 1950, was enacted, an effort was made by an application made by some persons to declare the trust as a public charitable trust. The Assistant Charity Commissioner conducted a suo motu enquiry under section 19 of the Bombay Public Trusts Act, 1950, and came to the conclusion that the institution called "Shri Ganapati Pancha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed exemption in respect of its entire wealth in Part IV of the return with the following remarks : "It is submitted that the assets belonging to the deities are held for religious purposes and are not taxable under any of the provisions of the Wealth-tax Act. They are also otherwise exempt. However, the particulars of the assets are detailed in the balance-sheet, a copy of which is enclosed and also vide letter." The Wealth-tax Officer completed the assessments under section 21(4) holding that the assessee-trust was a private discretionary trust and the shares of the deities, i.e., the beneficiaries of the trust, were indeterminate and unknown. The Appellate Assistant Commissioner upheld the order of the Wealth-tax Officer. The Tribunal agreed with the departmental authorities in that the shares of the beneficiaries, i.e., the five deities, were indeterminate and unknown and that the wealth of the trust was assessable in the hands of the trustee under section 21(4) of the Wealth-tax Act, 1957. The Accountant Member, in his concurring but separate judgment, also stated that, amongst the objects of the trust, one object was "and for such other charities of a religious nature as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hwari Kalimata v. CIT [1946] 14 ITR 703, was stated to have taken the same view. As to the question whether the fact that, in this case, the properties were vested in the trustees and not in the beneficiaries will make any difference, Shri Dastur stated that that fact by itself would not make any difference. In this context, he referred to the observation of the Judicial Member of the Tribunal at page 63 of the paper book to the effect: "It is not necessary to pursue this topic further. Section 21 of the Wealth-tax Act does not make any distinction as to whether the properties are vested in the trustee or in the beneficiaries thereof." He also stated that both in the Patna High Court decision in Sri Sri Jyotishwari Kalimata v. CIT [1946] 14 ITR 703 and the Calcutta High Court decision in CIT v. Pulin Behari Dey [1951] 20 ITR 314, the properties were vested in the trustees and not in the beneficiaries, and yet it was held that the shares of the beneficiaries, even though not specifically mentioned in the deed of trust, were taken to be equal. As to another question whether the fact that the deities herein are not made specifically owners of the corpus will make any difference, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e three groups of deities. The first question for consideration was whether on the fact that the individual share of the three deities in two cases and of the four deities in another case were not specified in the deeds of trust, it could be said that their shares were indeterminate and unknown. Following the Privy Council judgment in the case of Jogeswar Narain Deo v. Ram Chandra Dutt [1896] LR 23 I. A. 37, the Patna High Court held that it was not so. The shares of the individual deities will have to be taken as determinate and known as, under the general law, when the shares were not specified, the beneficiaries take their shares equally. Under the trust, the trustee, it may be stated, was given full discretion as to the manner and extent in which he should spend the whole or part of the income of a particular year. It was only the balance of the income remaining after meeting the expenses that was to be held by the trustee in trust for the use or the benefit of the deities, and yet it was held that this clause did not make any difference and the shares of the individual deities continued to be known and determinate and that the assessment made under the proviso to section 41(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade on the whole of the income of the deities, it was immaterial that the deities, through the shebaits, had to make payments to other persons and the amount which might be available to the deities was variable or indeterminate. It was equally immaterial that the shebaits, as managers of the deities, received the income but had to make payments to or to provide for a large and somewhat indefinite group of persons and charities. Thus, it is not possible to accept Shri Jetley's argument that the Calcutta High Court in CIT v. Ashalata Devi [1951] 20 ITR 326, in any way, took a view different from what it had taken in CIT v. Pulin Behari Dey [1951] 20 ITR 314. CIT v. Bhim Chandra Ghosh [1956] 30 ITR 46, is also a Calcutta decision. The High Court, in that case, applied its decision in CIT v. Pulin Behari Dey [1951] 20 ITR 314 and distinguished its decision in Panchanan Das v. CIT [1951] 20 ITR 57. Since the Tribunal as well as Shri Jetley had strongly relied on the Calcutta High Court decision in Panchanan Das v. CIT [1951] 20 ITR 57, it is desirable to refer to the facts in Panchanan Das v. CIT [1951] 20 ITR 57 and the manner in which that case was distinguished by the Calcutta High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt decision in Chintamani Ghosh Trust v. CWT [1971] 80 ITR 331 was strongly relied upon by Shri Jetley for the Department. In that case, 15 per cent. of the net income of the trust was required to be invested and added to the trust properties. The other 15 per cent. of the net income was to be devoted to the worship of the family deity and wages of the servants employed and for the maintenance of a charitable homeopathic dispensary and a fund for the maintenance of widows, orphans and students, etc., and 10 per cent. of the income was to be devoted to the granting of allowances to relatives and dependants of the settlor. Remaining 60 per cent. was to be given to sebayets. As regards the 15 per cent. of the income which was devoted to the family deity, for the maintenance of a charitable homeopathic dispensary and a fund for the maintenance of widows, sons, students and orphans, etc., the High Court held and rightly that the shares of the beneficiaries for that 15 per cent. of income were indeterminate and unknown. The reason is obvious. A charitable homeopathic dispensary and a fund for the maintenance of widows and orphans, etc., two of the three beneficiaries, were neither natura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the shares of the beneficiaries in the 15 per cent. of the income which was devoted to the family deity and for the maintenance of a homeopathic dispensary and for a fund for the maintenance of widows, orphans and students, etc., were indeterminate and unknown, there appears to be no discussion or debate about it in the decision. It was not even argued or considered whether, in case like this, the beneficiaries could be treated to have their shares in the income equally. The Allahabad case, thus, does not advance the Department's case further. Coming then to our High Court decision in CIT v. Lady Ratanbai Mathuradas [1968] 67 ITR 504, it is seen that our High Court held that the shares of the beneficiaries were indeterminate and unknown since the trustees had, during the period in question, absolute discretion to accumulate the income or use it for the benefit of any one or more of the children of P to the exclusion of others. It was further held that the trustees should be assessed at the maximum rate under the proviso to section 41 of the Income-tax Act. Since, however, the facts in the present case are materially different from the facts before our High Court in CIT v. Lady R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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