A. Velambal Ammal vs The Agricultural Income Tax Officer, Tiruchirapalli

Jagadisan, J.—This revision petition arises out of proceedings of assessment under the Madras Agricultural income tax Act, 1955 Madras Act V of 1955. One Ayyaswami Chettiar, the deceased husband of the petitioner, endowed an extent of about 15 acres 60 cents under his last Will and testament dated 21st June, 1924, for the performance of certain religious and charitable trusts. Under the terms of the said Will properties were dedicated for the following objects and purposes : 1. The performance of the second kalasandhi kattalai in the shrine of Sri Saptharishiswami, Lalgudi; 2. The performance of the 8th day (Horse Vahanam) Mandagapudi during the annual Brahmotsavam festival in the month of Panguni in the said Saptharishiswami temple ; 3. The daily puja and neivedhyam in the temple of Sri Vinayagar situated in Big Chetti Street, Lalgudi ; 4. The performance of water pandal charity during summer months of Panguni, Chitrai and Vaikasi every year in Keezhavashi village, Lalgudi taluk ; 5. The performance of one day mandagapadi in the annual festival of Sri Sellandiamman temple in Agalankanallur village, Lalgudi taluk ; 6. The performance of Somavara Mandagapadi on the last Somavara (Monday) in the month of Karthigai every year in in the shrine of Sri Saptharishiswami, Lalgudi. The properties are described in the A schedule attached to the Will of the of the late Ayyaswami Chetti, as having been dedicated for the performance of the charities (dharman) founded by the late Lalgudi Ayyaswami Chetti. The petitioner claimed that the income from these properties is exempt from taxation under S. 4 (b) of the Madras Agricultural income tax Act, which reads as follows : Subject to the provisions of this Act, the total agricultural income of any year of any person comprises all agricultural income derived from land situated within the State which is received by him or which accrues to him within or without the State, but does not include...... (b) any agricultural 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 thereto...

The petitioner was summoned by the Agricultural income tax Officer to produce the accounts relating to the income from property and its expenditure. The petitioner claimed that the trust founded by her husband was a private " family " trust in respect of which she could not be called upon to submit accounts to anybody. The income tax Officer negatived the petitioner''s claim for exemption under the Act in the following words :

In spite of the notice last served on her on 27th October, 1959, she has not produced the accounts for verification. Her petition claiming exemption from Agricultural income tax for certain lands set apart for charitable purposes is therefore rejected, as she has no accounts for the maintenance of the trust properties.

The petitioner preferred an appeal before the Commissioner of Agricultural income tax, Board of Revenue, Madras. By order dated 18th August, 1960, the appellate authority confirmed the decision of the Agricultural income tax, Officer. The Commissioner, also failed to exempt the income from the lands from the operation of the Act on the ground that the petitioner was not prepared to concede that she was liable to render account for the income from the property to any public authority. In this revision petition the correctness of the view of the authorities functioning under the Act has been called in question.

The Will of late Ayyasami Chetti is a registered instrument. Indeed there is no dispute about the genuineness of the Will. The terms of the Will expressly and quite explicitly constitute a trust or endowment of religions and charitable nature. The water pandal charity directed to be performed is a charitable trust. The performance of Kalasandhi kattalai and Brahmotsavam and daily puja and neivedyam to a deity constitute a religious endowment attached to public temples. It is not necessary to consider whether the plea of the petitioner that the testator constituted only a private trust is well founded or not. Every charitable trust is only a public trust as benefit to the community at large or to a section of the community is of the essence of a valid charity. The conferment of a specified benefit in favour of a particular private individual cannot constitute a charitable trust. But a religious trust need not necessarily be a public trust as there can be a private religious trust. S. 4 (b) of the Madras Agricultural Income tax Act does not specifically provide that the property must be held under a public trust. If the property is held under a trust or other legal obligation wholly for religious or charitable purposes the income from that property is exempt from taxation. Where there is only a partial dedication of the property for religious or charitable purposes, the income applied for the performance of the religious or charitable purposes alone is exempt from taxation, and not the entire income of the whole of the property. Under the Indian Income tax Act, S. 4 (3) provides as follows :

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, in so far as such income is applied or accumulated for application to such religious or charitable purposes....

It is significant to note the following words in S. 4 of that Act ;

In this Sub-Section '' charitable purpose '' includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility, but nothing contained in Cl. (i) or Cl. (ii) shall operate to exempt from the provisions of this Act that part of the income from property held under a trust or other legal obligation for private religious purposes which does not tenure for the benefit of the public.

It is not necessary for us to consider, in this case, the question whether the agricultural income from property dedicated to a private religious trust is exempt from taxation or not. There can be no doubt that in the instant case the trust or endowment though partly religious and partly charitable is of a public character.

It is inconceivable how the taxing authorities failed to grant the exemption in favour of the petitioner for the income of the property held by her under a trust and a legal obligation to carry out and perform the objects of the trust directed by her late husband in and by his last Will and testament. The petitioner''s contention before the taxing authorities that the trust was of a private nature could not disentitle her to the benefit of the statutory exemption. The Agricultural Income tax Officer took upon himself the wholly supererogatory task of calling upon the petitioner to produce the account books relating to the trust. The Officer was not concerned to investigate the question whether the petitioner was guilty of breach of trust in administering the trust properties. Even if it were to be found that the petitioner failed to apply the income for the performance of the trust, that will not in any way affect her capacity as a trustee holding the properties in trust. The application of the income by the petitioner is wholly irrelevant and not germane to the ascertainment of the character in which she held the properties. Surely the petitioner held the properties only as a trustee under a legal obligation to perform the religious and charitable objects prescribed under the Will of her late husband, and it follows that the income therefrom is within the ambit of the exemption under S. 4 (b) of the Act. The order of the Taxing Authorities holding that the petitioner is not entitled to the benefit of S. 4 (b) is manifestly erroneous in law and should be set aside. The revision petition is allowed, and the Taxing Authorities are hereby directed to grant the exemption prayed for by the petitioner. The petitioner will have her costs from the respondents. Counsel''s fee Rs. 100.