T.P. Mukerjee, J. - (1.) THE present reference made by the Appellate Tribunal under Section 27(1) of the Wealth-tax Act, hereafter referred to as the Act, arises out of the assessment of net wealth of the applicant, Chintamani Ghosh Trust, Allahabad, hereinafter referred to as " the trust". THE statement of the case relates to the assessment years 1957-58, 1958-59, and 1959-60. THE corresponding valuation dates are 31st March, 1957, 31st March, 1958, and 31st March, 1959, respectively. Four questions of law, to be set ovt presently, have been raised by the Tribunal for the opinion of this court.
(2.) THE trust was created by the late Sri Chintamani Ghosh by and under written and registered deed dated July 24, 1924, for making provision for decendants and other relatives of the settlor, for charity, and for due performance of the worship of the family deity, Sri Sri Sridharjee. THE property settled on trust consisted of certain shares valued at Rs. 2,19, 765 and also a sum of Rs. 2,80,235, which had been deposited by the settlor with the Indian Press Ltd., Allahabad. THE total value of the amount settled on trust was, thus, Rs. 5,00,000 only, at the inception. THE property so settled has been referred to in the deed as endowed property. Subsequently, the trustees acquired extensive house properties in Allahabad and also movable properties with the trust money which constituted the basis of the assessment of the net wealth of the trust, during the three relevant: assessment years. Under the terms of the deed of trust, the settlor constituted himself the sole trustee and the absolute sebayet of his family deity, Sri Sri Sridharjee, who is one of the beneficiaries. After the settlor's death, the management and administration of the trust estate vested in a board of trustees. The habendum of the deed runs as follows : "Now these presents witnesseth... .that the settlor... .doth hereby .....convey, transfer, alienate and make over... .to and in favour of the trustees (after divesting himself fully and completely) the said endowed property... .by way of endowment of religious and charitable trust to unto, and in favour of and on behalf of the said deity known as and called Sri Sri Sridharjee, subject to the provisions, conditions, stipulations and terms herein set out TO HAVE AND TO HOLD unto and to the use, enjoyment and benefit of the said deity Sri Sri Sridharjee through the trustees... .for the purposes of puja, seva and utsab as for carrying out the objects of trust and charity mentioned hereinbelow." Clause 7 of the deed of trust sets out the names of the different beneficiaries and the extent of the benefits conferred on them. The terms of this clause are set out below in extenso : " 7. That, out of the income and rents arising out of endowed property all taxes, revenues, cesses, rent, repairing charges, costs of litigation and other periodical dues, payable in respect of the endowed property or any portion thereof or for the upkeep thereof, shall in the first instance be paid. Out of the blance left, shall be devoted, spent and utilised various sums of money for the following objects, in the manner following, that is ta say: (1) That the trustees shall set apart 15 per cent, of the net income every year, which shall be invested in securities and properties allowable under law in the case of trustees and this shall be added to the endowed property. (2) That 15 per cent, of the net income shall be devoted, in such share and proportion as the trustees may decide : (a) to the worship, performance of ceremonies, festivals and rituals in connection with or relating to the worship of the said deity Sri Sri Sridharjee in the manner enjoined by the Hindu sastras and by the traditions of the family of the settlor and for the salary, remuneration or sacredotal dues of the priest or priests as the case may be, as well as for the wages and salaries of the servants, employees and menials engaged for the seva, puja and utsab of the said deity. The said sum shall be spent by the sebayets hereinfter mentioned who shall render six monthly accounts of the same to the trustees ; (b) for the maintenance of the following institutions and funds, of which the trustees shall themselves keep accounts : (i) a charitable homeopathic dispensary to be known as 'Hari Pada Infirmary' to be located at Allahabad. (ii) 'Golapmohini Fund', a fund for the maintenance of widows, orphans and students at Allahabad or elsewhere, to be located at Allahabad. (3) that 10 per cent, of the net income shall be devoted to the granting of allowance to relatives and dependants of the settlor. The first recipients -of the allowances shall be the following, and they shall respectively receive the following allowance during life:-- (a) the settlor's eldest daughter-in-law, Srimati Durgamoni Ghosh, Rs. 50 per mensem for fife ; (b) the settlor's daughter, Hari Bibha alias Chhabi, Rs. 50 per mensem for life ; (c) the settlor's niece-in-Iaw, Srimati Megh Mala Dasi, wife of the settlor's nephew, the late Hari Charan Bose Rs. 30 per mensem, for life ; (d) the settlor's grand nephew, Sriman Kedar Nath Bose, Rs. 30 per mensem, for life. (4) Without prejudice to the above payments and out of the said 10% of net income, the trustees shall have liberty, from time to time, to select for enjoyment of allowances, other relatives and dependants of the settlor or the settlor's family, out of such funds as may be available under this deed of trust. Any amount left after disbursement of the allowances mentioned above shall be made into a separate fund, called the 'Relatives' Allowances Fund' for maintenance of relatives and dependants of the settlor and shall be available for the benefit of the relatives (other than those mentioned above) that the trustees may select. The trustees will hold the said fund and will decide the quantum of allowance and the object thereof. (5) That sixty per cent, of the net income of the trust property shall be applied as follows : (a) 25 per cent, of the said sixty per cent of income is to be granted to the sebayets as remuneration for their services, in equal shares. This portion is to be called " A " allowance. (b) The remaining 75 per cent, of the said sixty per cent, of income shall be divided into five equal shares. Each such share is to be paid to each sebayet for the maintenance of his family......" Then follow clauses regulating the devolution of interest of the sebayets, and reserving the ultimate benefit to certain educational institutions, on the total extinction of the male line of the settlor. The three sons of the settlor and two other descendants have been named in the deed as the first five sebayets of the deity.
(3.) THE Wealth-tax Officer assessed the trust in the status of an individual and computed the value of the net wealth at Rs. 17,09,030, Rs. 14,23,633 and Rs. 14,29,999 for the assessment years 1957-58, 1958-59 and 1959-60, respectively, as against about Rs. 6'5 lakhs returned by the trust. Evidently the Wealth-tax Officer acted on the basis that the trust being the legal owner of the assets was assessable to wealth-tax on the net value thereof. He, therefore, taxed the entire value of the net wealth in the hands of the trust. In the appeal before the Appellate Assistant Commissioner, it was contended that there being an endowment or gift in favour of the deity, who is not an assessable entity, the whole of the endowed property is exempt from wealth-tax. The Appellate Assistant Commissioner turned down the contention and held that the trust in question is a " family trust", as mentioned in the preamble to the deed dated July 24, 1927, and the major portion of the income of the trust property has been set apart for the benefit of the sons and other relatives of the settlor while only a small amount has been dedicated for performance of the worship of the family deity. He held, therefore, no exemption could be granted on the ground that the deity is the, sole owner of the properties.;