The objects of the Trust, inter alia, are that during lifetime of H.E.H. the Nizam to meet expenses of Haj Pilgrimage of himself and members of his family accompanying him on such pilgrimage and expenses on visits to holy places of Hedjaz and Iraq and also for making religious offerings at such places as the settlor in his absolute discretion might think fit that after the death of the Nizam the net income and the unspent accumulations of income, if any, shall be spent or utilised by the trustees for all or any of the religious or charitable purposes specified in clause 3 e of the said trust deed.
Following the said order, the High Court disposed of R.C. No.292 of 1982 for the Assessment Years 1976 77 and 1977 78 which gave rise to Civil Appeal Nos.9269 9270 of 1995.
The Revenue carried the matter in appeal before the Income tax Appellate Tribunal.
The Wealth Tax Officer rejected the claim.
In assessment proceedings, under the Wealth Tax Act, 1957 for short the Act for the Assessment Years 1974 75 and 1975 76, the trustees claimed exemption under Section 5 1 i thereof on the ground that the properties assets were held in Trust for public purposes of charitable and religious nature in India in view of the said order of learned Chief Judge, City Civil Court, Hyderabad.
After obtaining legal opinion, the trustees passed a resolution dated May 22, 1968 to spend the income of the Trust property including accumulations thereof only on objects and purposes specified in sub clauses v , vi and of clause 3 e within the territory of India.
The appellants are the assessees.
Holding that the assessee was number entitled to exemptions under Section 5 1 i of the Act, the Tribunal set aside the order of the Appellate Assistant Commissioner and allowed the appeal of the Revenue.
On September 29, 1973, the Chief Judge, City Civil Court, Hyderabad allowed the application and directed the trustees to utilise the income of the Trust fund including the accumulated income for the objects and purposes specified in aforementioned sub clauses of clause 3 e within the territory of India.
During his lifetime, he did number go either for Haj or on any other pilgrimage.
The Trustees shall hold and stand possessed of the Trust Fund UPON TRUST a to d On and after the death of the Settlor to hold the Trust Fund or the balance thereof then remaining and the unspent accumulations If any of the income of the Trust Fund and the investment thereof upon trust to expend or utilise the net income of the Trust Fund as well as the accumulations if any of the income thereof made during the Settlors lifetime and the investments thereof for all or any one or more of the following religious or charitable objects and purposes at Hedjaz and or Iraq in such manner as the Trustees may in their absolute discretion think proper to iv for companystructing, establishing and maintaining dispensaries or hospitals or wards in hospitals and otherwise for medical aid and relief for companystructing, establishing, maintaining and running schools, madressas and other educational institutions and otherwise for advancement of education vii for such other religious or charitable purposes as the Trustees may in their absolute discretion think fit in such manner and to such extent as they may think fit.
But the trustees companyld number have spent the income of the Trust property in Hedjaz or Iraq under clause 3 e in view of the restriction imposed by the Government of India on sending monies outside India.
The Appellate Assistant Commissioner, however, took the view that by virtue of the order of the Chief Judge, City Civil Court, the properties of the Trust were entitled to exemption under Section 5 1 i of the Act from the date of the order.
Thereafter, they filed an application before the Chief Judge, City Civil Court, Hyderabad seeking relief under Section 34 of the Indian Trusts Act for short, the Trusts Act .
Civil Appeal No.2328 of 1995 is against the order of the Division Bench of the High Court in R.C.No.192 of 1980 dated March 24, 1987 reported in 171 ITR 323 pertaining to the Assessment Years 1974 75 and 1975 76.
After his death, the said Trust became a Public Charitable and Religious Trust and the trustees held the companypus and accumulations of income of the Trust thereunder.
H.E.H. the Nizam of Hyderabad created a trust with a companypus fund of Rs.22,20,000/ , named E.H. the Nizams Pilgrimage Money Trust on November 2, 1950.
SYED SHAH MOHAMMED QUADRI,J. These appeals arise out of two reference cases under Section 27 1 of the Wealth tax Act, 1957 decided by the High Court of Andhra Pradesh, give rise to a companymon question of law.
They read as under 3.
H.E.H. the Nizam died on February 24, 1967.
