COMMISSIONER OF INCOME TAX Vs. LAD PARISHAD KARYALAYA

JUDGEMENT

(1.) THIS is a reference under section 66(1), of the Income -tax Act, 1922, (hereinafter referred to as 'the Act'), at the instance of the revenue. The question referred for our determination is :

(2.) THE question arises in respect of the assessment years 1958 -59 and 1959 -60, for which the relevant previous years ended on December 31, 1957, and December 31, 1958, respectively. Lad Parishad Karyalaya, Bombay, the assessee, is assessed as an association of persons for these assessment years. It was formed or it came into existence in or about the year 1947 under a written constitution which is in Gujarati. The object for which the assessee is constituted is set out in clause 1 thereof. There is a provision for an elected standing committee and the constitution, functions and duties of the standing committee are provided in clause 8 of the constitution. The constitution also provides for a smaller body which is entitled managing committee and its constitution and other functions are laid down in clause 9 of the constitution. Clause 18 of the constitution is as under :

(3.) THE short question then arises is, are the properties which are held by the assessee held under trust or other legal obligation as contemplated by section 4(3)(i ? It is now well -settled that a formal deed of trust is not absolutely essential in order to come to a conclusion that any particular property is held under trust or other legal obligation. It will be useful in this connection to refer to the observations of the Privy Council in All India Spinners' Association v. Commissioner of Income -tax :