and his wife Lady Hannah David which falls on the Twenty second day of June and the remaining income for the benefit of all persons and objects including Jewish persons and objects and in such proportions as the said Trustees may think proper.
The Trust fund had been invested by the trustees in inter alia 3 1/2 Government Securities.
As regards the assessments for the five years 1948 49 to 1952 53 the Tribunal upheld the decision of the Appellate Assistant Commissioner who had companyfirmed the assessments made by the Income tax Officer.
as aforesaid and Jewish objects and particularly in giving donations to the members of the Jewish Community of Bombay on the anniversary of the death of the said Sir Sassoon David, Bart.
Appeal from the Judgment and Order dated the 21st February, 1956, of the Bombay High Court in Income tax Reference No.
On further appeal by the appellants, the Income tax Appellate Tribunal set aside the assessments for the first four years 1944 45 to 1947 48 holding that s. 34 had been wrongly invoked, for it was only a case of difference of opinion of one Income tax Officer from his predecessor on the same set of facts.
Accordingly in February, 1948, the said certificate of exemption was cancelled, as the securities companyered thereby had been redeemed by the Government.
On appeal the Appellate Assistant Commissioner companyfirmed the said assessments.
The trustees thereupon asked for a fresh certificate of exemption from the Income tax Officer, Bombay Refund Circle in respect of the 3 Conversion Loan, 1946.
N. Rajagopal Sastri and D. Gupta, for the respondent.
J. Kolah, J. B. Dadachanji and S. N. Andley, for the appellants.
This Deed of Declaration of Trust was, on June 4, 1953, registered under the Bombay Public Trusts Act, 1950.
in the application of the said income the Trustees shall have regard to the wishes of the said Sir Sassoon David, Bart.,
CIVIL APPELLATE JURISDICTION Civil Appeal No.396 of 1957.
In 1946 the 3 1/2 Government Securities were redeemed by the Government of India and were companyverted into 3 Con version Loan, 1946.
But the said Income tax Officer refused to issue such certificate on the ground that the income from the trust fund in question was number exempt from taxation under s. 4 3 i of the said Act which, at the material time, was as follows 4 1 2 Any income, profits or gains falling with in the following classes shall number be included in total income of the person receiving them Any income, derived from property held under trust or other legal obligation wholly for religious or charitable purposes, and in the case of property so held in part only for such purposes, the income applied, or finally set apart for application, thereto Upon the fact of the withholding of the certificate by the Income tax Officer, Refund Circle, being intimated to the Income tax Officer, A V Ward, Bombay, the latter Officer started proceedings against the appellants under s. 34 of the said Act in respect of the assessment years 1944 45 to 1947 48.
Provided also that during the life time of Sir Sassoon David, Bart.,
including therein distant and companylateral relations provided further that in the application of the income of the said Charitable Trust Fund the said Trustees for the time being shall observe the following proportions, viz.
On application being made by the appellants, under s. 66 1 of the said Act, the Tribunal drew up a statement of case and referred two questions of law arising out of its order to the High Court for its opinion.
who shall also be entitled to direct if he so desires that the income of the time being of the Trust Funds or any part thereof may be applied to such charitable object or objects as the said Sir Sassoon David, Bart.,
Clause 13 of the said deed, on the true companystruction of which depends the answer to the referred questions, runs as follows The Trust Fund shall be held by the Trustees upon the Trusts to apply the net income thereof after providing for all necessary expenses in relation to the management of the Trust Funds for all or any of the following purposes, that is to say, a the relief and benefit of the poor and indigent members of Jewish or any other companymunity of Bombay or other parts of India or of the world either by making payments to them in cash or providing them with food and clothes and or lodging or residential quarters or in giving education including scholarships to or setting them up in life or in such other manner as to the said Trustees may seem proper or b the institution maintenance and support of hospitals and schools, companyleges or other educational institutions or c the relief of any distress caused by the elements of nature such as famine, pestilence, fire, tempest, flood, earthquake or any other such calamity or d the care and protection of animals useful to mankind or e the advancement of religion or f other purposes beneficial to the companymunity number falling under any of the foregoing purposes Provided always that in applying the income as aforesaid the Trustees shall give preference to the poor and indigent relations or members of the family of the said Sir Sassoon David, Bart.,
and four other persons, who were holding certain securities of the value of Rs.
The Judgment of the Court was delivered by DAS, C. J. This is an appeal brought on a certificate granted on September 19, 1956, by the High Court of Bombay under s. 66 A 2 of the Indian Income Tax Act hereinafter referred to as the said Act against its order dated February 21, 1956, in Income tax Reference No.
24,25,000 for the purpose of charity and had been applying the same for and towards charitable purposes, executed, on June 8, 1922, a Deed of Declaration of Trust declaring that the said trust fund would be held by them on trusts more specifically therein mentioned.
It was mentioned in the said certificate that it was to enure till its cancellation.
Provided further that if the income of the Trust Funds for any year shall number be wholly applied during that year on the Trusts aforesaid such surplus income may be carried forward to the subsequent year or years and be applied as the income arising during that year or years.
32 of 1954.,
In the assessment proceedings for those nine years the Income tax Officer took the view that the income from the trust fund was number exempt from taxation under s. 4 3 i and accordingly he assessed the appellants for the first four assessment years 1944 45 to 1947 48 on the ground that the income for those years had escaped assessment.
The appellants are the trustees of a charity fund known as The Charity Fund Founded by Sir Sassoon David, Baronet of Bombay .
The said Sir Sassoon David, Bart.
May 5.
In the year 1930 a certificate was issued by the Income tax Officer, A Ward, Bombay, whereby the Reserve Bank of India was authorised number to deduct at source the tax on the interest on the said securities so held by the trustees.
32 of 1954 answering in the negative two questions of law referred to it under s. 66 1 of the said Act at the instance of the appellants.
shall direct and in such case the Trustees shall so apply the income .
He also started regular proceedings for the assessment year 1948 49 and the succeeding years up to 1952 53.
He also assessed the appellants to tax for the subsequent five years 194849 to 1952 53 .
that number less than half the income of the said funds shall at all times be applied for the benefit of the members of the Jewish Community of Bombay only including the relations of Sir Sassoon David, Bart.
