Mrs. Sujata V. Manohar, J. - (1.) The appellants are the trustees of H. E. H. Nizam Pilgrimage Money Trust, Hyderabad. On 2-11-1950, H. E. H. Nizam of the erstwhile State of Hyderabad created a trust under which the settlor set apart Government of India Loan Securities of the face value of Rs. 22.20 lakhs yielding an annual income of Rs. 66,600/- for certain charitable and religious purposes. The relevant clause of this settlement is Clause 3(c). The relevant provisions of Clause 3 are as under:"3. The Trustees shall hold and stand possessed of the Trust Fund Upon Trust:- (a) To manage the Trust Fund and to recover the interest and other income thereof; (b) To pay and discharge out of the income of the Trust Fund all expenses and charges for collecting and recovering the income of the Trust Fund and all other costs, charges, expenses and outgoings of and incidental to the trusts of these presents and the administration thereof; (c) During the lifetime of the Settlor to defray the expenses of Haj of the Settlor and of such of the members of his family as he may take with him and of their visit and pilgrimage to various Mohmmedan Shrines and holy places in Hedjaz and Iraq and for making religious offerings and expending moneys for charitable purposes at such places and for such other religious of charitable purposes as the Settlor in his absolute discretion may from time to time think fit and require out of the income as well as the corpus of the Trust Fund in such manner and to such extent as the settlor may from time to time direct and for all or any of such purposes as aforesaid to pay such moneys out of the income or the corpus of the Trust Fund as the Settlor may from time to time require."
(2.) The settlor appointed himself as one of the trustees along with other trustees. The settlor died on 24-2-1967. The Assistant Controller of Estate Duty held that the settlor was not completely excluded from enjoying the benefit of the corpus of the trust and hence under Section 10 of the Estate Duty Act, 1953 the property which was the subject matter of the settlement was includible in the estate of the deceased. On appeal, the Appellate Controller of Estate Duty also held Section 10 to be applicable. In second appeal before the Tribunal, three contentions were raised on behalf of the revenue invoking Section 12 as a more relevant section, and submitting that under Section 12 also the property which was the subject matter of the settlement was includible in the estate of the deceased. This contention was upheld by the Tribunal.
(3.) From the decision of the Tribunal, the following question was referred to the High Court under Section 64(1) of the Estate Duty Act, 1953: "Whether on the facts and in the circumstances of the case, the trust property of the value of Rs. 13,57,205/- is liable to be included in the estate duty assessment of the deceased as property deemed to pass - (a) either under Section 12 of the Estate Duty Act, (b) or under Section 10 of the Estate Duty Act - ;