9911796707
TMI Blog1972 (2) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... cts necessary for the decision of this question may now be stated. One Sri Chhadami Lal Jain, by a deed dated November 14, 1947, purported to create a trust known as " Chhadami Lal Jain Trust ". In the preamble to the deed in question, reference is made to the necessity for building a college hostel and for maintaining an Aushadhalaya in Firozabad district, Agra. The relevant portion of the deed runs as follows : " 1. That the name of this trust shall be Chhadami Lal Jain Trust. 2. That the following institutions shall be under this Trust : (a) Boarding House, (b) Dharamshala including temple, (c) Commercial and Industrial Institute, (d) Jain Religious School, (e) Jain Dispensary including Medicine Department, (f) Scholarship Fund, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hindu undivided family up to the assessment year 1949. In the year 1949-50, a part of the said income was exempted by the Income-tax Officer, Firozabad, holding that the trust was exempt under section 4(3)(i) of the Indian Income-tax Act, 1922. In the assessment years 1958-59 and 1959-60, with which the present reference is concerned, the Income-tax Officer took the view that inasmuch as the income from the property was transferred to the trust and not the properties, no exemption could be granted in respect of the income under section 4(3)(i) of the Act. On appeal, the Appellate Assistant Commissioner confirmed the view of the Income-tax Officer. The assessee, thereafter, filed an appeal before the Income-tax Appellate Tribunal. The Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... took the view that the right to receive income from the trust properties constituted property within the meaning of section 4(3)(i) of the Act and was as such exempt under section 4(3)(i). Secondly, that in any event, the income which the trust received fell under section 4(3)(ii) of the Act, for it could be said that the amounts received were in the nature of voluntary contribution by Lala Chhadami Lal Jain, and there being no dispute that the said income was applied for charitable purposes, the income was entitled to exemption under this section. We propose to consider the reasons given by the Tribunal in seriatim for the purpose of answering the question referred to us. A reading of the trust deed does not leave any doubt that only th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. Even if it be assumed that the Tribunal could take into consideration the various circumstances relied upon by it, the conclusion which the Tribunal has reached is that the intention of the author of the trust was to create a trust in respect of the properties themselves. The mere intention to create a trust in respect of certain properties is not by itself sufficient to bring the case under section 4(3)(i) of the Act. Before advantage of section 4(3)(i) of the Act can be taken, the property must be held under trust, which implies that the trust in respect of the property must be complete, i.e., all the formalities which are required under the law for creation of a trust in respect of the property must be complied with. In the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It has been found as a fact that there was no dispute that the income was being applied for the purposes of the trust and that the trust was for a religious or a charitable purpose. In order that section 4(3)(ii) of the Act should apply, all that is necessary is that the religious or charitable institution should derive the relevant income from " voluntary contributions ". The word " voluntary " means an act done of one's own free will. The section does not insist on any particular manner in which " the voluntary contribution " should be made to the charitable institution, and that being so, a deed by which a donor makes a single contribution or a contribution which recurs from year to year, would be sufficient to meet the requirements of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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