COMMISSIONER OF INCOME TAX Vs. AGASTYAR TRUST

JUDGEMENT

(1.) Two persons by name K. Rajagopal and V. S. Nanjappa Chettiar into a partnership by a deed dated November 28, 1941. Under the terms of the said partnership deed they were carrying on a business in the purchase and sale of waste papers. The partnership deed provided that out of the net profits of the business after meeting all charges and expenses, 80% shall be set apart and allotted to charitable and religious objects set out therein, that the said 80% of the profits shall be kept invested in the business but the shall be separetly entered in the account of the firm under the head "Charity account" and that all disbursements made out of the said amount shall be debited to the said account and the surplus, if any, carried over to the next year. The partnership deed also declared that a sum of Rs. 9,900 which lay to the credit of the Charity account is set a part finally for the purpose of religious and charitable objects set out therein, that the sums lying to the credit of the Charity account as on the date of the partnership deed and all future amounts that will be credited to it out of the profits of the business in future years shall be disbursed by one T. N. Venkatarama Chetty as a trustee of the said fund for carrying out the religious and charitable objects mentioned therein. The religious and charitable objects contemplated by the partnership deed are the conduct to temple festivals in Madras and other places like Conjeevaram, Tirupathi, Srirangam, Salem and other places, medical relief, giving of alms including food to the poor on occasions of Hindu festivals as selected by T. N. Venkatarama Chetty in his discretion, gift of sums of money to poor deserving persons for celebration of marriages and generally on any object of general public utility like educational institutions, orphanages, choultries, work houses and hospitals, etc. The partners retained the power to revoke the trust created thereby. The partnership deed was to take effect from July 14, 1940.

(2.) By an agreement dated August 26, 1943, entered into between the two partners and the trustee, the trust was made irrevocable. BY another document styled as "trust deed" dated July 1, 1944, T. N. Venkataramam Chetty, the trustee appointed under the partnership deed, extended the objects of the trust and made a trust called "Agastyar Trust". That deed enumerated the various objects of that trust. The said trust deed was also attested by the partners. On July 7, 1944, itself the partnership came to be dissolved. Later, on June 12, 1961, another trust deed had been executed by the sons of the original partners and the sons of the trustee, T. N. Venkatarama Chetty. But we are not concerned in this case with the scope and effect of the said trust deed dated June 12, 1961.

(3.) AGAINST the refusal to refer the other questions, the Revenue had filed T.C.P. No. 115 of 1980, under s. 256(2) of the I.T. Act, 1961, seeking a direction from this court to the Tribunal to refer another eight questions.