HARRIES, C. J. - (1.)THIS is a case stated ny the Bibar Board of Agricultural Income-tax in which anwers to the following questions are requested :-
(1) whether in view of para. 21 of the will of the late Maharaja Sir Radha Prasad Singh the direction to spend the sum of Rs, 32,400 for certain charitable and regilious objects constitutes a binding turst within the meaning of Section 8, Bihar Agricultural Income-tax Act, upon all holders of the Dumraon Raj including the assessee.

(2) Whether the amount of interest charged on arrears of rent is rent within the menaing of the Bihar Agricultural Income-tax Act so as to entitle the assessee to claim a deduction as provided under Section 6 (c) of the Act.

(2.)THE assessee is the Maharaja Bahadur Ram Ran Vijay Prasad Singh, who is the present holder of the Dumraon Raj, which is an impartible estate.
On the 17th day of December 1890, the then holder of the Dumraon Raj Maharaja Sir Radha Prasad Singh Bahadur, made a will by which he appointed his wife and the Dewan of the estate executrix and executor thereof. At the date of this will the Maharaja had no son, and in the event of no sons being born to him he empowered his wife, if she survived him, to adopt a son. He left the property subject to certain legacies to his wife for life with the remainder to the son to be adopted by her. The wife survived the Maharaja and purported to adopt a son; but on her death this adoption was challenged by the nearest reversioner who claimed the estate on failure of the will. The question was litigated and was compromised. By the compromise decree the adoption was held to be invalid and the child who had been so adopted was given a large sum of money. The reversioners, who challenged the adoption, therefore, obtained possession of the estate. The present assessee is a son of the reversioner who so acquired possession of the estate. The present assessee, therefore, does not hold the property under the terms of the will.

It appears that the late Maharaja Sir Radha Prasad Sungh and his predecessor had from time to time established various religious, charitable and educational institutions, and the Maharaja like his predecessor was maintaining these institutions at the time of his death. By para. 21 of his will the testator provided as follows :-

My predecessors and I have from time to time established and I at present support various religious and charitable and educational institution in various parts of the country and it is my wish and I direct my Executrix and Executor and whoever may be in the enjoyment of my property either as my heir or under the provisions of this my will, do preserve and maintain and support such institution in the manner I am doing and to avoid all difficulty in the matter I have annexed hereto a schedule giving the names of the institutions aforesaid and the amount which I spent yearly for their respective support.

Annexed to the will is Schedule B giving a list of such religious, charitable and educational institutions. In this list certain institutions are expressly named, and the sums annually granted to them are set out. Other institutions are described generally and the total amount granted to them is stated. Under the heading of Dispensaries there is an item Other Dispensaries without further specification for which a sum of Rs. 600 was annually granted. Under the heading Educational Institutions is an item subscriptions to other Schools amounting to Rs. 1,200. There is also another general item other charities for which a sum of Rs. 3,000 was granted.

(3.)IT is found that the present assessee does maintain the religious, charitable and educational institutions named in the schedule and does in fact spend more on these institutions than the total sum stated in the schedule to have been spent by the testator, namely Rs. 32,400.
The present Maharaja claimed before the Income-tax Authorities that the sums spent by him on these religious and charitable purposes were exempt from agricultural income-tax by reason of Section 8, Bihar Agricultural Income-tax Act. He contended that this income was derived from land held by him on trust for public purposes of a charitable or religious nature. The Income-tax Authorities have come to the conclusion that the direction in the will to which I have referred does not create a trust but it is only an expression of a pious hope or which of the testator. That being so, the taxing authorities have refused to exempt from taxation the actual sum spent by the Maharaja on these institution or indeed any sum expended on such institiutions. These are the facts which give rise to the first question set out in the case.

It will be convenient to deal with these questions separately, and I will first deal with the question whether the assessee is entitled to exemption from taxation on the amount spent by him in accordance with the terms of the will.

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