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TMI Blog1977 (4) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... of the income is to be divided in three shares. From two shares out of the three shares of the income, the dharmakartas or trustees appointed by the deed and their successors are to take Rs. 10 per mensem as salary for discharging their duties; and as regards the remainder of the two shares, the direction to the trustees is as follows: 'You should perform annually without failure the customary ...... pattah (meaning fateha), kuthum (meaning Khatam), etc., for our ancestors and for us after our decease. You should annually give in the month of Ramzan to the mesakins or the poor ujjivanam i.e., food, udumanam, i.e., clothes, sadaka meaning alms, jaggath, etc. The surplus should be divided in equal shares once a year by our heirs or their sons, grandsons in existence from generation to generation inclusive of you.' The third share of the income after paying the expenses is to be utilised in purchasing other immovable property which is to be added to the said charity properties and dealt with according to the above terms ....... The dharmakartas and the successors, the heirs, and the descendants are not to receive more than the shares allotted to them out of the income; and they wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner dismissed the appeal filed by the assessee. Thereafter, there was an appeal to the Appellate Tribunal and the contention taken before the Tribunal was that the earlier decision of the Tribunal that the wakf was not for charitable purposes within the meaning of section 4(b) had to be reviewed and that the decision of the Privy Council holding that the document creating the trust was valid dedication (wakf) had not been brought to the notice of the Tribunal. There was also another contention based on the decision of this court in Sri Sadaya Pillai Trust v. Agricultural Income-tax Officer [1967] 63 ITR 520 (Mad). The Agricultural Income-tax Tribunal held that the Agricultural Income-tax Officers were justified in considering that the assessee was not eligible for the exemption from assessment of the whole of the income under section 4(b) of the Act. On the contention against the validity of common assessment aggregating the income of all the beneficiaries in the assessee's hands, the Tribunal took the view that the right of a beneficiary arose only after payment for the charitable purposes was ascertained and on the decision of the trustees to purchase or not to purchase an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o all the circumstances of the case, the dominating purpose and intention of the grantors in executing this deed evidently was to provide adequately for these charities. That was their main and paramount object. The secondary and subsidiary object was to secure for their families and descendants any surplus that might remain over after the needs of the charities had been satisfied.....The provisions of the deed carry out these objects, and that being so, it is, in their Lordships' view, only right to hold that the effect of the instrument is not to give the trust property in substance to the family of the grantors, but to give it in substance to the charitable purposes named in it." The learned counsel for the petitioner submitted that in view of this passage, it would be clear that the decision of the Privy Council was that the trust was wholly for charitable purpose. We are unable to agree with the submission. The Privy Council clearly points out that the document was in substance partly for charity and partly for the maintenance of the members of the family and that both the grants were perpetual grants. Hence it is not possible to spell out from the decision of the Privy Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement is entitled to receive on behalf of any person, the tax shall be levied upon and recoverable from the court of wards, administrator-general, official trustee, or from such receiver, administrator, executor, trustee, guardian or manager, as the case may be, in like manner and to the same amount as it would be leviable upon and recoverable from the person on whose behalf such agricultural income is receivable, and all the provisions of this Act shall apply accordingly. " This provision would apply in a case where the income is received on behalf of a beneficiary. The point to be considered is whether the income has been received on behalf of the beneficiaries in the present case. From the judgment of the district munsif, to which we have made reference already, it is clear that there are 26 sharers. Subsequently, the number of sharers appears to have increased and there was an agreement saying that there are 36 sharers, who are entitled to a share in the surplus of the trust income. If the income is receivable on behalf of these 36 sharers then under section 8(1)(a) extracted above, the assessment will have to be in like manner and to the same extent as it would be leviable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or his or their benefit. None of them has any beneficial interest in the income ; he collects the income for the benefit of others. In this view, even if the nattanmaigars were trustees in whom the properties of the Durgha vested, they should be deemed to have received the income only on behalf of the kasupangudars in definite shares." The Tribunal has distinguished this case as if it did not apply to the present one on the ground that the facts in the present case are not the same as in the case of Nagore Durgha and the issues raised in that case are not the same as in the case on hand. The issue under consideration in the case of Nagore Durgha was the justification, or otherwise of the departmental action of assessing persons in a single assessment. The question is the same here. We do not consider that the Tribunal has properly understood the principle laid down by the Supreme Court. From the passage extracted already it is clear that in the case of a trust deed like the one before us the income is received only on behalf of the beneficiaries especially when the shares of the beneficiaries are ascertained and clearly defined. In these circumstances, we do not consider that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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