MAHARAJADHIRA SIR KAMESHWAR SINGH Vs. COMMISSIONER OF INCOME TAX BIHAR AND ORISSA

JUDGEMENT

(1.) The appellant executed a deed of trust settling certain lands described in schedule "A" and the rents of lands described in schedule "C" for the maintenance of certain temples and Thakoorbaries. The material terms of the deed of trust are :

(2.) The net income of all the lands set out in Schedule "A" after providing for the expenses of management and the taxes payable thereon was estimated at Rs. 1,81,717/- and the net rental of the properties described in Schedule "C" was estimated at Rs. 10,208/- and from the aggregate of these two amounts after deducting 15 per cent as trustee's remuneration, the balance of the income estimated at Rs. 1,63,136-4-0 was to be utilised for the objects of the trust.

(3.) In the assessee's income determined by the Income Tax Officer for the assessment year 1950-51, Rs. 6,000/- were included as income from non-agricultural properties of the trust. In the view of the Income Tax Officer, the trust was not public religious trust and the income derived from properties not used for agriculture was not exempt from liability to pay tax in the hands of the appellant. In appeal against the order of assessment, the Appellate Assistant Commissioner held that the income coming to the hands of the appellant from the trust properties, was not taxable as private income of the appellant, but in his view, the remuneration amounting to Rs. 21,274/- computed at the rate of 15 per cent of the net income of the trust properties in the year in question not being agricultural income in the appellant's hands were liable to be taxed. In appeal to the Income Tax Appellant Tribunal, Patna Bench, Patna, the order passed by the Appellate Assistant Commissioner in so far as it related to remuneration received by the appellant was affirmed. The High Court of Judicature at Patna thereafter at the instance of the appellant directed the Income Tax Appellate Tribunal to submit a statement of the case on five questions set out in the order. The fifth question (which is the only question material in this appeal) was as follows :