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TMI Blog1985 (12) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... n the declaration. The trust was also registered by the Commissioner under section 12A of the Income-tax Act, 1961 ('the Act') on 28-9-1979. It was also granted a certificate on the same date, i.e., 28-9-1979 under section 80G of the Act by the Commissioner. The trust also maintained regular books of account which were duly audited. 3. On 1-4-1977, the assessee set apart, endowed and dedicated the aforesaid property situated at 16/72 Civil Lines, Kanpur, together with the hospital and the nursing home run therein, including all the buildings and lands or rights therein or appurtenant thereto for the public charitable purposes of rendering medical services and relief to the poor and weaker sections of the society in particular and the public in general. The said dedication was made in favour of the aforesaid Chandrakanta Jawaharlal Public Charitable Trust. She gave a written shape to the above dedication through a declaration on 7-4-1977. We will quote this declaration in full in this order as under : "This declaration is made on this 7th day of April in the year one thousand nine hundred seventy-seven by Dr. Chandra Kanta Rohatgi, adult daughter of late Dr. Jawahar Lal Rohatgi, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing home situated at 16/72, Civil Lines, Kanpur, including all other buildings, lands and rights therein or appurtenant thereto (as described in the plan annexed hereto) have been irrevocably, set apart, endowed and dedicated by me on 1st day of April, 1977 for the public charitable purposes or providing medical services and relief to the poor and weaker sections of the society in particular, and the public in general, and I have no right, title or interest therein except as trustee of the aforesaid trust ; and for all intents and purposes, the said Trust has all the rights, title and interest to hold, run and manage the said hospital and nursing home for the purposes aforesaid as part of the corpus of the Trust for the aforesaid public charitable purposes." 4. The question of assessing the income of the above property, situated at 16/72 Civil Lines, Kanpur, as also the income of the nursing home and hospital engaged the attention of the ITO. In this appeal, we are concerned only with the former, viz., the income of the property only, as the other matters have been settled at the level of the Commissioner (Appeals). It was contended before the ITO that since the aforesaid proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the endowment of the property in favour of the charity was permissible under the Hindu law and it was not required to be effected by a regular instrument of transfer and registered with the Registrar. The Commissioner (Appeals) observed that the reference to endowment under the Hindu law meant renunciation of all interest in the property but that was not the case here. He held that the legal ownership over the property continued to vest in the assessee and, therefore, its income was also to be assessed in her hands under section 22 of the Act. He, however, directed the ITO to recompute the income of the property by adopting the municipal value as the gross annual letting value. 7. The assessee is now in appeal before us. The learned counsel for the assessee Dr. R.C. Vaish narrated the history of the trust and the endowment made by the assessee in respect of the aforesaid property. He pointed out that while the trust was created on 18-4-1976 with a corpus of Rs. 1,100 only, the dedication or endowment of the property itself was made on 1-4-1977 and that the dedication was reduced to writing through a declaration dated 7-4-1977. He submitted that there was no dispute that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a 'legal obligation', which would suffice for the purpose of the Act. Menakuru Dasaratharami Reddi v. Duddukuru Subba Rao AIR 1957 SC 797. It was held in this case that the principles of Hindu law applicable to the consideration of the questions of dedication of property to charity are well settled. Dedication to charity need not necessarily be by instrument or grant. It was also observed that from the standpoint of the Hindu law, it is not essential to a valid dedication that the legal title should pass from the owner. Tadi Bulli Gangi Reddi v. Tadi Bulli Tammi Reddi AIR 1927 PC 80. In this case also, it was held that the dedication of a portion of a family property for the purpose of a religious charity may, according to Hindu law, be validly made without any instrument in writing, even if it be an appropriation of landed property. 9. The learned counsel for the assessee as an alternate contention submitted that for assessing the income under section 22 mere legal ownership was not necessary. For this proposition, he referred to the decision of the Madras High Court in P. Joseph Swaminathan v. CIT [1984] 145 ITR 198. It was held in this case that where a house property st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .P. Agrawal. On page 275 of the book it is stated that section 17 would operate when the dedication is by deed, and make it wholly inoperative unless it is registered. "An 'Arpanama', by which immovable property is given to certain specified deities must rank as a deed of gift which is compulsorily registrable under section 17(a) of the Indian Registration Act, and it would also have to be stamped as such---Bhoopati Nath v. Basanta [1936] ILR 63 Cal. 1098. Similarly, if a settlor wants to transfer property to trustees, the deed of settlement or trust, if it relates to immovable property of the value of one hundred rupees or upwards, would require registration." The learned departmental representative also submitted before us that there was no evidence that the deed of dedication was performed on 1-4-1977 in respect of the aforesaid property and, therefore, the presumption was that it was intended to be transferred only on 7-4-1977 when the declaration was made by the assessee. He contended that since this declaration was in writing, it also required registration. Here he referred to the decision of the Allahabad High Court in CGT v. Maharaja Pateshwari Prasad Singh [1971] 82 ITR 65 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was duly signed by the trustees and was also audited. It also could not be denied that the assessee had made a dedication or renunciation or endowment of the property in question on 1-4-1977 in favour of the above trust. She did not transfer the property through any deed in writing either in favour of the trust or in favour of its trustees. She, of course, subsequently confirmed the above dedication through a declaration made on 7-4-1977 which was in writing. We have already quoted the declaration in full in our order above. 13. The question for consideration arises whether on the above facts it can be said that there was transfer of the property from the assessee to the trust on 1-4-1977. To come to our conclusion, we have also relied on Tagore Law Lectures on the Hindu Law of Religious and Charitable Trust by B.K. Mukherjea 1983, Fifth edn. In paragraph 3.3 of Chapter III of these lectures, it is stated that no trust in relation to immovable property is valid unless it is declared in the prescribed manner specified in the Indian Trusts Act, 1882, or unless ownership of the property is transferred to the trustee. The said Act is applicable to Hindus, but section 1 of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by renouncing his rights in specific property and indicating the particular religious or charitable purpose for which the property is to be used. No deed is necessary and no trustee need be appointed, for the law will impose the duties of trustee upon the founder or his heir, or such other persons, as might have control over or possession of the endowed property. Of course, the property in respect of which the endowment is made must be designated with precision, the object or purpose of dedication should be clearly indicated and the founder must effectively divest himself of all beneficiary's interests in the endowed property. 15. The basic concept of a religious endowment under the Hindu law differs in its essential particulars from the concept of 'trust' known to the English law. As a dedication of land for public temple is not a gift within the meaning of section 122 of the Transfer of Property Act, the provisions, therefore, of section 123, which require a gift of land to be effected by a registered document, do not apply to such a dedication. In this connection, we will also like to refer to a decision of the Madras High Court in the case of S. Devaraj v. CWT [1973] 90 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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