- (1.) WE have before us a reference made by the Income-tax Appellate Tribunal (Delhi Branch 'b') under Section 68 (1) of the Indian Income-Tax Act, hereinafter to be referred as the "act", which was so made at the instance of the assessee messrs. Laxmi Narain Lath Trust, Mandrella, Jhunjhunu, hereinafter to be referred as the "assessee". The question formulated by the Tribunal was in the following terms : "whether on the facts and in the circumstances of the case, the income from the Trust in question was exempt from income-tax under Section 4 (3) (i) of the Indian Income-tax Act?"
(2.) THE assessee was taxed as an association of persons and the assessment covered four assessment years namely, 1954-55, 1955-56, 1956-57 and 1957-58. The Trust was created by one Laxmi Narain Lath who had executed the indenture of trust on 25-8-1948. The settler of the trust Laxmi Narain Lath was residing at banaras. Four trustees were appointed; one was the settler himself, the other trustee was the son of the settler, and there were two other trustees who belonged to the Lath family. A sum of Rs. 5,000 was set apart for charity and upon the trust as mentioned in the deed. The objects of the trust were as follows : " (2) The objects of the trust shall be : (i) To advance, promote and encourage education amongst the Hindus (a) literal, (b) physical, (c) scientific, (d) industrial, (f) religious, (g)cultural (in fine arts) and (h) general education of all kinds at Mandrella in the Jaipur State or any other place in India, (ii) To establish;and promote the establishment of and or to render aid to schools, colleges and other educational institutions at Mandrella, in the Jaipur State and grant scholarships, stipends and prizes and other helps to students, teachers and other persons. (iii) To arrange for or grant aid for the seva and puja of the deity Shiva and any other deities already installed or hereafter to be installed. (iv) To maintain and arrange for proper supply of water for cattle and maintain "posala" for serving water to passers by from the pucca well situated in the Trust Property. (v) To maintain and keep in repairs the immovable properties forming part of the Trust Estate. (vi) To render aid to any persons belonging to the family of Laths and to grant monthly and other periodical aids to them. (vii) To establish and to promote the establishment of and or to render aid to temples, Dharamshalas, hospitals, orphanage homes and other institutions for the benefit of the Hindus. (viii) To grant aid for the establishment or maintenance of tube-wells and constructions of repairs to paths, roads, bridges, etc. (ix) To provide medical aid and relief to the suffering people by aiding, establishing and maintaining hospitals, dispensaries, nursing houses, clinics, sanatorium and other institutions meant for rendering medical relief. (x) To help people during natural calamities, such as flood, famine, pestilence, also during civil commotion and other distress. (xi) To grant aids for marriage of poor girls or for the shelter of homeless people. (xii) To grant aid to maternity homes and child welfare centres orphanages and widows homes. (xiii) To help helpless widows and Narikalyan Samitis. (xiv) To help in the preservation and improvement of cows and other cattle, to improve their breed and to take all steps for the increase of milk supply, to arrange for the same by establishing dairies and other organisations and for the protection of cows and for their improvement and taking all steps conducive to the welfare of the cows. (xv) To do such other acts, deeds and things for the uplift of the Hindus in all ways and for the educational medical and social welfare and cultura as the Trustees may think fit and proper. "
(3.) CLAUSE 5 of the trust deed lays down as to how the trustees were to utilise the trust funds and this clause reads as under : "the trustees shall from time to time after meeting the expenses of and incidental to the management of the Trust properties and of the Trust decide the particular object or objects for which the income or corpus of the Trust properties for the time being available shall be applied. ";