AZAD AHMAD KHAN Vs. INCOME TAX APELLATE TRIBUNAL

JUDGEMENT

(1.) By the present writ petition, the petitioner is challenging the assessment order dtd. 31/1/1989, passed by respondent No. 3; order dtd. 16/9/1991 whereby Appellate Authority partly allowed petitioner's appeal against the assessment order and; order dtd. 30/11/1999, passed by the Income Tax Appellate Tribunal whereby it dismissed petitioner's appeal.

(2.) Brief facts of the case are that one Gulam Ahmad Khan was running a engineering workshop in the name and style M/s. General Engineering Works. On 25/8/1951, he claims to have created a waqf-alal-aulad under the provisions of the Mussalman Waqf Validating Act, 1913 (hereinafter referred to as the Act of 1913) through a registered deed and transferred his business to the waqf and became its first mutwalli. Gulam Ahmad Khan was isueless and claims to have adopted his nephew Sardar Abdullah Khan alias Azad Ahmad Khan, the petitioner, as his son. As per the terms of the Waqf deed, an amount of Rs.100.00 out of the total proceeds of the M/s. General Engineering Works was to be spent towards almighty and rest of the proceeds were to be utilised as per the wishes of the waqif Gulam Ahmad Khan during his lifetime. Gulam Ahmad Khan also reserved to himself right to effect titamma of the original waqf deed and sell off the assets entrusted to the waqf including M/s. General Engineering Works. With regard to succession of mutwalli, it provided that one Mst. Hasina Khatun would be the next mutwalli and after her demise, her children and their descendants were to succeed her as mutwalli. In case, Mst. Hasina Khatun was to die issueless, then Inam Ahmad Khan, who is the brother of waqif Gulam Ahmad Khan and after him his son Azad Ahmad Khan and his descendants would succeed as Mutwalli of the Waqf. As per clause C (jim) of the waqf-deed, after death of Gulam Ahmad Khan, Rs.100.00 were to be continued to spent towards charitable purposes and with regard to rest of the proceeds from the waqf property, Rs.400.00 was to be paid to Inam Ahmad Khan for helping Mst. Hasina in managing the waqf property and the remaining amount was to be divided amongst Inam Ahmad Khan, Azad Ahmad Khan and Mst. Hasina Khatun. It is an admitted fact that even after creating the waqf, Gulam Ahmad Khan continued to mention the waqf property as his personal property while filing his income tax returns. Waqif Gulam Ahmad Khan amended the original waqf-deed by a titamma dtd. 22/1/1980. As per the relevant amendments effected by the titamma, the waqf now excludes Inam Ahmad Khan from ever becoming a mutwalli and he was also ousted from receiving any benefits out of the waqf property. Since, Mst. Hasina Khatun died issueless, therefore, two-third of share would now go to Azad Ahmad Khan and one-third was to be utilised for charitable purposes. It is also disclosed in the titamma that a portion of the property of the workshop was rented out and machineries lying in the workshop were sold to pay off personal debts of the waqif Gulam Ahmad Khan.

(3.) Gulam Ahmad Khan died issueless on 2/12/1980, and as per the terms of the amended deed, petitioner Azad Ahmad Khan, became mutwalli of the waqf. The petitioner filed returns under Estate Duty Act, 1953 (hereinafter referred to as the Act of 1953) with regard to the properties of the waqf and claimed immunity from paying estate duty on the same. However, a show cause notice was issued to the petitioner on 24/11/1988 seeking explanation for the exemption claimed by him from paying estate duty. Petitioner submitted his reply on 29/12/1988 and on the basis of the same impugned assessment order dtd. 31/1/1989 is passed. Petitioner challenged the assessment order before the Appellate controller of Estate Duty, which upheld the assessment order by its order dtd. 16/9/1991. Against the same, petitioner preferred an appeal before the Income Tax Appellate Tribunal, which was dismissed by order dtd. 30/11/1999.