ADDITIONAL COMMISSIONER OF INCOME TAX Vs. GANGABAI CHARITIES

JUDGEMENT

(1.) THERE is a well-known building complex in Purasawalkam in the City of Madras called Dharmaprakash. The main building consists of a mandapam and other portions. Similar is the layout for an annexe. The buildings are much sought after for celebration of weddings and reception for which they are let out on rent, for three days at a time, at certain rates. The buildings are much sought after for celebration of weddings and reception for which they are let out on rent, for three days at a time, at certain rates. The building was constructed with a nucleus of a trust fund provided therefor by a lady called Ganga Bai, who was at that time in her nineties. With that fund a plot of land was purchased and the construction begun. The fund was augmented by her son, Seetharama Rao, who was a hotel owner, from his own contribution as well as from outside donations. Ganga Bai's original outlay amounted to Rs. 34,000 in all. But the funds which went into completion of the building amounted to nearly Rs. 6,00,000. Even while the building was under construction, Ganga Bai executed a document described as a deed of trust on September 13, 1958, in which the trust was named as "Ganga Bai Charities". It is to this deed that practically every one connected with this case has turned his gaze to find out what the object of Ganga Bai was in providing the fund and in constructing the building and to what use the properties are to be put, even though she provided but the nucleus of the whole project and it was only a part of the total outlay on the building, her deed of trust is the basic document to which we have to address ourselves in order to ascertain the objects and functions of the trust.

(2.) EVER since the construction of Dharmaprakash, it was being let out as a marriage mandapam to be used by members of the public as such. The income derived from the letting out of this Kalyana Mandapam came to Rs. 1,06,392 in the year ended March 31, 1963. For the subsequent years also the income was substantial. Under the aegis of Ganga Bai Charities, a printing press was also being run. The trust earned a profit of Rs. 27,784 from the printing press in the year ended March 31, 1963, and a sizable income in the subsequent years as well.

(3.) THE deed executed by Ganga Bai starts by reciting that she had a long cherished desire to construct and provide a building in Purasawalkam, Madras, for the benefit of the public, to be used by them for religious, charitable, and or cultural and social purposes. THE preamble also shows that the old lady intended thereby to secure a religious benefit for herself as well as to satisfy a long felt need of the public in that part of the city. After referring to the provision made by her of the initial fund for bringing into being the trust property, the trust deed proceeds to declare that the fund is being provided for the express purpose of constructing a building and dedicating the same for use by the public, inter alia, for religious, charitable and cultural purposes, by way of an irrevocable trust. After setting out the name of the trust as "Ganga Bai Charities", the trust deed proceeds to reiteration of the objects of the trust by insisting on the trust property being used only for religion, charitable, social, cultural and other allied purposes. Seetharama Rao, the son of the author of the trust, is named the trustee. Provision is made for a succession to the office of trustee. THE trustee is empowered to obtain further funds, and also to realise form the trust properties rents and profits. More specifically, the trustee is permitted to let or allow the trust building or such portion thereof for the use of the public for social, cultural, religious and educational purposes, free of charge, or at such rents and on such terms Without prejudice to the generality of this provision, it is further stated that the trustee has power to let, or allow, the building for holding and conducting religious discourses, and for running schools for the development of Sanskrit learning, free of cost or at such rents and on such terms and conditions as the trustee thinks reasonable and proper in the interests of the trust. Power is also given to the trustee to construct a few shops and let them out on rent to pay for the maintenance and upkeep of the trust properties. Appropriate provisions are also made in the deed for the maintenance of accounts, investment of surplus funds, and other sundry things.