MALIK, C.J. - (1.) THIS is a reference under section 66(1) of the Indian Income-tax Act and the question referred to us is as follows :-
(2.) WHETHER on a true construction of the deed of trust dated 24th January, 1944, the Tribunal was right in holding that the trust was a void one for uncertainty and ambiguity ? The assessee, J. K. Charitable Trust, made an application for a refund of tax paid under section 48 read with section 4 of the Indian Income-tax Act. The application was rejected by the Income-tax Officer on 27th February, 1950. An appeal against that order was dismissed by the Appellate Assistant Commissioner on 31st July, 1950, and a further appeal to the Tribunal was dismissed on the 21st January, 1952, on the ground that it was not a valid trust, its terms being vague and uncertain. The reason given in the statement of the case for holding that the trust was not valid is that under the terms of the deed very wide powers were given to the trustees who could utilise the income for any religious or charitable purpose of a public nature. The relevant portion of the deed of trust is as follows :-
(3.) THE Trustees.......... shall pay, use and apply the balance of the said income, dividends, interest, rents and profits for and upon such religious and charitable purposes of a public nature as the trustees may think fit and in furtherance but not in limitation of and without prejudice to the generality of this provision for and upon one or more of the religious and charitable objects hereinafter mentioned. Clauses (a) to (k) then set out the objects and learned counsel for the Commissioner of Income-tax admits that most of these objects are religious or charitable. The relevant portion of section 4(3) of the Indian Income-tax Act, before its recent amendment, was as follows :- (3) Any income, profits or gains falling within the following classes shall not be included in the total income of the person receiving them : (i) Any income derived from property held under trust or other legal obligation wholly for religious or charitable purposes,...... At the end of the section the words charitable purposes are defined to include relief of the poor, education, medical relief and the advancement of any other object of general public utility, etc. The Tribunal was, therefore, called upon to see whether the income was of trust property held wholly for religious or charitable purposes. The Tribunal has held that there was no valid, as it was vague and uncertain and the income was, therefore, not exempt from taxation under section 4(3) of the Act. ;