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TMI Blog1978 (9) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... y shows that the share of the beneficiary under such a trust, far from being exempted, is brought to tax and the tax is made realisable from the mutawalli and read with the proviso the main provision really confines the benefit of exemption only to ultimate illusory or remote, public charitable or religious purpose and is thus completely consistent with the object and scheme of the Act. In the result, we are clearly of the view that s. 8(1) of the Act is free from the vice of discrimination under art. 14 of the Constitution and the said provision is perfectly valid and constitutional. Appeal dismissed . - - - - - Dated:- 12-9-1978 - Judge(s) : R. S. PATHAK., P. N. BHAGWATI., V. D. TULZAPURKAR JUDGMENT The judgment of the court was delivered by TULZAPURKAR J.--The short question raised in this appeal by special leave is whether section 8(1) of the Orissa Agricultural Income-tax Act, 1947, suffers from the vice of discrimination and as such is hit by art. 14 of the Constitution ? The petitioner is the Mahant of Emar Math at Puri, which is an ancient public Hindu religious trust. The trust owns considerable endowed properties both agricultural and non-agricultural. After ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gricultural income of such assessee. (2) In this section ' purposes of a charitable nature' include relief of the poor, education, medical relief and advancement of any other object of general public utility." Section 9 runs thus : " 9. Exemption of Wakf-alal-aulad.-- All agricultural income of Muslim trusts referred to in section 3 of the Mussalman Wakf Validating Act, 1913, created before the commencement of this Act, shall be excluded from the operation of this Act : Provided that the share of a beneficiary under a trust under the aforesaid Act, commonly known as Wakf-alal-aulad shall not be exempted and the tax may be realised from the mutawalli and the basis of taxation shall be the share of each beneficiary. Explanation.--For the purposes of this section, a beneficiary means the settlor, his family, children and descendants. " Since s. 9 refers to Muslim trusts " referred to in section 3 of the Mussalman Wakf Validating Act, 1913 ", it would be proper to set out the provisions of s. 3 of the Mussalman Wakf Validating Act, 1913. Section 3 of that Act runs as follows : " 3. Power of Mussalmans to create certain wakfs.-- It shall be lawful for any person pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... slim trusts known as wakf-alal-aulad but is applicable to all wakfs and, therefore, in case of wakfs other than wakf-alal-aulad the exemption granted by s. 9 of the Act which is in respect of all agricultural income must be regarded as discriminatory as against the exemption granted by s. 8(1) of the Act. He, therefore, urged that s. 8(1) which grants a limited exemption would be violative of art. 14 of the Constitution. On the other hand, the learned Attorney-General appearing for the respondents contended that s. 9 is confined to Muslim trusts commonly known as wakf-alal-aulad and all other Muslim trusts are covered by s. 8(1) of the Act with the result that to all such Muslim trusts, other than wakf-alal-aulad, the limited exemption is applicable. He urged that wakf-alal-aulad do stand in a class by themselves and as such have been dealt with by s. 9 in keeping with the objective of the Act. He further urged that sections 8(1), 9 and 16 showed the scheme of the Act and if these provisions were considered in the light of the main objective of the enactment it was clear that s. 8(1) could not be held to be discriminatory or violative of art. 14. Before considering the rival con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar nature and extent contemplated by s. 16 is in regard to the agricultural income of any assessee who may not be a trustee owning lands under a public charitable trust ; in other words, in either case, the exemption is confined to such part of the agricultural income which is actually spent by the assessee for charitable purposes. The legislative intent of granting such a limited exemption having been thus clearly brought out by ss. 8(1) and 16 of the Act, the question would be whether by enacting s. 9 the legislature really intended to accord or has actually accorded favourable treatment to Muslim trusts in the matter of granting exemption in the manner suggested by counsel for the appellant ? Having regard to the submissions made by counsel for the appellant the question raised for determination may be formulated thus : Whether ss. 8 and 9 while providing for exemption to charitable or religious trusts discriminate between agricultural income derived from lands held under non-Muslim public trusts and those held under Muslim trusts and accord to the latter a favourable treatment as against the former by confining the exemption in the former case to such income as has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debts out of the rents of the property dedicated provided that the ultimate benefit is in such cases, expressly or impliedly reserved for the poor or for any other purpose recognised by the Mussalman law as a religious, pious or charitable purpose of a permanent character. Section 4 also declares that no such wakf as is referred to in s. 3 shall be deemed to be invalid merely because of remoteness of benefit to charity. In fact, s. 3 is declaratory of a right of a Muslim to create a valid wakf of the type described therein and the proviso makes it clear that but for the reservation of ultimate benefit to charity that has to be made, such family settlement (private wakfs) would be invalid. It is conceivable that a deed or instrument of wakf may be a composite one partly incorporating a public wakf and partly a private wakf but s. 3 of the Validating Act unquestionably refers to that part of the instrument which incorporates a private wakf--wakf-alal-aulad, the validity of which must depend upon whether in that part of the instrument the ultimate benefit is expressly or impliedly reserved for charitable or religious purposes or not. It is thus clear that s. 3 of the Validating Act re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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