(1.) THE petitioner holds about 50 acres of land in his individual capacity, besides certain other properties as Mutavalli of a wakf. THEse latter proper ties were endowed as wakf by the petitioner himself for the benefit of his wife and six minor children and their descendants from generation to generation, and on the total extinction of all the descendants, for the benefit of an orphanage in Tellicherry called Dharusalam Yathimkhana or, in its absence, for any other Muslim orphanage in Malabar. THEre was a provision that out of the income of the endowed properties, after meeting all expenses, a sum of one anna in the rupee was to be spent by the Mutavalli the petitioner himself for the support of orphan boys and girls in Tellicherry. On these provisions, the Agricultural Income-tax Appellate Tribunal overruled the petitioner's contention that the income from the wakf properties had been set apart wholly for religious or charitable purposes and was exempt from taxation. Ex. P6 is a copy of its order in the appeals relating to the years 1958-59 to 1961-62. In this writ petition to quash the same, two questions nave been raised. (1) whether the income from) the wakf properties, is liable to be assessed under the Agricultural income-tax Act 1950; and (2) if so, whether the same could be clubbed with the income of the petitioner from properties held is his individual capacity. On the first of the questions, the relevant statutory provision is S. 4 of the Agricultural Income-tax Act, which reads: "4. Total Agricultural Income Subject to tb3 provisions of this Act, the total agricultural income of any previous year of any person comprises all agricultural income derived from land situated within the State and received by him within or without the State, but does not include (a) any agricultural income derived from land situated without the State; (b) any agricultural income derived from property held under trust or other legal obligation wholly for religious or charitable purposes and in the case of property so held in part only for such purposes the income applies thereto. Explanation In this section "charitable purposes" includes relief of the poor education, medical relief and the advancement of any other object of general public utility. ", THE ancestry of the section may be traced to S. 4 (3) (1)of the Indian Income-tax Act, 1922, which, in so far as it is material, reads as follows: "4 (3) (1) Any income profits or gains falling within the following classes shall not be included in the total income of the person receiving them: (i) Subject to the provisions of clause (c) of sub-section (1) of S. 16, any income derived from property held under trust or other legal obligation wholly for religious or charitable purposes, in so far as such income is applied or accumulated for application to such religious or charitable purposes as relate to anything done within the taxable territories, and in the case of property so held in part only for such purposes, the income applied or finally set apart for application thereto: XX X X X
(2.) IN this sub-section 'charitable purposes" includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility, but nothing contained in clause (i) or clause (ii) shall operate to exempt from the provisions of this Act that part of the income from property held under a trust or other legal obligation for private religious purposes which does not enure for the benefit of the public. " It will be noticed that the place of the explanation to s. 4 of the Agricultural INcome-tax Act, is taken by the last portion of S. 4 (3) (i) of the INdian INcome-tax Act 1922, and that the latter is clear and specific that the income from the property held for private religious purpose which does not enure for the benefit of the public does not qualify for the exemption. Such a clear provision is absent in S. 4 of the Agricultural income-tax Act. By the explanation to the said section the requirement of general public utility is postulated only with reference to a charitable, but not, a religious purpose. On the language of the explanation, and on the terms of the deed, it is impossible to regard the wakf as wholly for charitable purpose. But can it be regarded as wholly for a religious purpose? Counsel for the petitioner contended that once the properties are found to be endowed for wakf, the conclusion that they have been endowed for religious and charitable purposes must follow. It was conceded before the Tribunal that a valid wakf as known to the Muslim Law had been created by the deed in question. The question regarding the eligibility for exemption of income arising from what may be called private wakfs (Wakf -Alal Aulad) as known to Mohammedan Law, has come before the Courts, under the INdian INcome-tax Act of 1922, on several occasions. Till the passing of the Mussalman Wakf Validating Act of 1913, the settled position was that there can be no valid dedication by way of wakf unless it was predominantly one for a charitable purpose. If the dominant object was to perpetuate the property in the family of the settlor, or to use it for the aggrandisement of the settlor and the members of his family the wakf would be regarded as illusory and void. The 1913 Act, in brief, recognised, that there can be a valid wakf for purposes recognised by the Muslim Law, as religious, pious, or charitable. With this historical background, a Full Bench of the Lahore High Court in Umar Bakshsh v. Commissioner of INcome-tax, Punjab (ILR. 12 Lahore 725) had to consider the claim for exemption under S. 4 (3) (i)of the INdian INcome-tax Act 1922, of income from properties of a private wakf, more or less on the same terms as the present one. I leave aside that part of the judgment which holds that a taxing statute is to be applied to all persons irrespective of the personal law and, that the expressions "religious or charitable purposes" occuring in the section should not be understood in the light of the personal law of the assessee. It is not necessary to consider how far this view has been sustained in the later rulings. The matter was delt with alternatively on the assumption that the expressions in question should take their colour or content from the personal law of the assessee. I shall also proceed on the same basis. On this footing, and in the light of the Privy council decision in Muhammed Ebrahim v. The Commissioner of INcome-tax, Nagpur (A. I. R. 1930 P. C. 226), it was held that the Wakf Validating Act 1913 can be understood or construed as having introduced a third element in the case, namely "pious" purpose as distinguished from "religious" or "charitable" purpose, and as drawing a distinction between a "pious" purpose on the one hand, and a "religious" and "charitable" purpose on the other. It was ruled that the income in question cannot be held to be income derived from wholly religious or charitable purposes, within the meaning of S. 4 (3) (1) of the Act. The decision was referred to, and the same conclusion that a private wakf is not entitled to exemption under S. 4 (3) (i) of the INcome-tax Act, was reached by a Full Bench of the Madras High Court in Commissioner of INcome-tax, Madras v. M. Jamal mohammed Sahib (1941 (9) I. T. R. 375) This decision noticed that the words in the last clause of S. 4 (3) (i) of the INcome-tax Act denying exemption to income of a private religious trust which does not enure for the benefit of the public, were added by amendment made in 1939, and observed that it was made to put beyond all doubt the intention of the legislature not to exempt even private trusts for religious purposes. IN East INdia INdustries (Madras) Ltd v. Commr, of INcome-tax Madras, (A. I. R. 1967 S. C. 1554), the Supreme Court held that where one of the objects of the Agasthyar Trust was not charitable, the income derived therefrom was not from property held wholly for a charitable purpose, and therefore not entitled to exemption under S. 15 B read with s. 4 (3) (i) of the INcome-tax Act 1922. Kanga in his "law and Practice of income-tax" has noticed with reference to the authorities, that even before the amendment of the last paragraph of sub-section (3) of S. 4 of the indian INcome-tax Act 1922, by the addition of the words excluding private religious trusts from the operation of the sub-section, courts held that some of the so-called private religious trusts were not entitled to exemption. (See 1958 Edition-page 218 ). IN the light of these authorities, I hold, on the first point that the wakf in question is not for wholly religious or charitable purpose & is not entitled to exemption under S. 4 (3) of the Agricultural income-tax Act 1950. The Tribunal recorded that for the years in question the accounts did not show that a sum of one anna in the rupee had been spent for the purpose mentioned in the wakf deed. The conclusion cannot be assailed and no case is made out to exempt any portion of the income.
On the second question, the matter was argued before the Tribunal, and before the Appellate Assistant Commissioner of Income-tax, with respect to S. 9 (2) (b) of the Agricultural Income-tax Act which reads as follows: " (9) Income from settlement, disposition, etc: (2) in computing the total agricultural income of any individual for the purpose of assessment there shall be included XX X X X X (b) so much of the agricultural income of any person or association of persons as arises from assets transferred otherwise than for adequate consideration to the person or association by such individual for the benefit of his wife or minor child or both. " It was not contended that the section is not attracted to the case on hand. Reliance was placed on the decision in Abdul Jalil Khan v. Agricultural Income-tax Board, Lucknow (34-I. T. R. 421 ). The decision, as observed by the Tribunal seems to have proceeded on the special provisions of s. 3 and 9 of the U. P. Agricultural Income-tax Act 1948, and it was ruled that the income from the wakf properties held by the Mutavalli and the income from his personal properties should be assessed separately and cannot be clubbed together. The wakf deed in that case was executed by the assessee's wife and constituted the assessee as a Mutavalli. There is no reference in the decision to any provision corresponding to S. 9 (2) of our Act; and it seems obvious that a provision in similar terms cannot apply to the facts in 34-I. T. R. 421. On the other hand, in Mohammed Ishaq v. Commr, of Income-tax, U. P. (19-I. T. R. 70) it was ruled with respect to S. 16 (3) (b) of the Indian Income-tax Act 1922 that the income of the wife and minor children of an assessee arising from wakf created by the assessee under the Wakf Act of 1913 and in respect of which the assessee was the Mutavalli, can be included in the total income of the assessee. S. 16 (3) (b) of the Income-tax Act 1922 corresponds to S. 9 (2) (b) of the Agricultural income-tax Act 1950. The second contention urged by the petitioner also fails.
I dismiss this writ petition, but without costs.
(3.) EX. P-6 order disposed of four appeals for the years 1958-59,1959-60,1960-61 and 1961-62. Only one writ petition has been 61ed to quash the orders. No objection was raised that the petition is detective or has not been properly constituted.;