TRUSTEES OF GORDHANDAS GOVINDRAM FAMILY CHARITY TRUST NAVALGADH Vs. COMMISSIONER OF INCOME TAX CENTRAL BOMBAY

JUDGEMENT

(1.) THIS reference raises the question whether a certain indenture of trust settles property wholly for charitable purposes and whether income derived by the trustees is exempt from payment of tax under Section 4 (3) (i) of the Act. The trust we are concerned with was executed on June 11, 1941, and significantly enough it is described as "gordhandas Govindram Family Charity Trust". Clause 2 of the trust deed provides for the application of the balance of the income (after payment of all necessary outgoings) in giving help or relief to such poor Vaishya Hindoos or other Hindoos as the trustees may consider deserving of help in the manner and to the extent specified in the said trust deed and subject to the conditions and directions stated in the next following clauses and/or for the charitable object or objects thereinafter mentioned. Therefore, the relief to poor Vaishyas or other Hindoos is qualified by the conditions which are prescribed in the subsequent clauses. Sub-clause (a) of Clause 3 provides that poor Vaishya Hindoos who are members of Seksaria family shall be preferred to poor Vaishyas not belonging to the said family and poor Vaishyas of Navalgadh shall be preferred to poor Vaishya Hindoos of any other place in or outside India. Sub-clause (b) provides for maintenance that is to be paid to any poor male descendant of the settlor. Sub-clause (c) provides for the maintenance of any unmarried female descendant of the settlor. Sub- clause (d) provides for payment of marriage expenses to any poor male descendant of the settlor. Sub-clause (e) provides for the marriage expenses of any poor female descendant of the settlor. The Sub- clauses that follow thereafter provide for payment of money to the poor male or female descendants of the other members of the Seksaria family. Having exhausted all the members of the family, both for the purposes of maintenance and for marriage expenses, Sub- clause (r) provides for the payment of Rs. 5 per month as and by way of maintenance to any poor male Vaishya Hindoo who may be deserving of help, and Sub-clause (s) provides for a similar payment to be made to any female Vaishya Hindoo for maintenance who may be deserving of help. Then Sub- clause (t) provides for payment of Rs. 500 as marriage expenses of any poor male Vaishya Hindoo who may be deserving of help and Sub-clause (u) provides for the payment of Rs. 500 as marriage expenses of any poor female Vaishya Hindoo who may be deserving of help. Clause 4 of the trust deed provides for the disposal of the surplus of the income, and the provision is that the trustees may apply the balance or surplus in their absolute discretion for giving monetary help or relief to poor members of the Hindoo community in such way as they consider most advantageous to the objects of such charity, and liberty is given to the trustees to hand' over the unpaid balance or such part of it to the trustees of "gordhandas Govmdram Charity Trust" which was another trust created by the settlor on March 25, 1941. These are the material provisions of the trust deed and the question that arises is whether within the meaning of the Income-tax Act the property under this trust is held wholly for religious or charitable purposes.

(2.) NOW, "charitable purpose" is defined, and the definition is that it includes relief of the poor, education, medical relief and advancement of any other object of general public utility. Therefore, it is clear, apart from authorities, that in India relief of the poor by itself would not be a charitable object unless it involved an object of general public utility. To further analyse this proposition it must result in any charity which was intended for the relief of the poor relatives of the settlor or donor not being a charity that falls within the definition of the Act. It is impossible to contend that relief of poverty when that relief is restricted to members of one's family can be a charitable object which is of general public utility. It may be that if the intention was clearly to benefit the public generally and incidentally or indirectly the members of the family of the settlor were also benefited, then a view may be taken that the settlement was for a charitable purpose; but when you have a case in which the primary purpose of the settlor is to benefit the members of his family and remotely and indirectly to benefit the general public, then it cannot be stated that the settlement is for a charitable purpose within the meaning of the Income-tax Act.

(3.) NOW turning to the trust deed itself it seems to me clear that the primary object of the trust was to benefit the poor members of the family of the settlor. It is true that in Clause 2 it is provided that the income should be applied in giving help or relief to the poor Vaishya Hindoos or other Hindoos, but this provision is, as I observed before, made subject to the conditions and directions which follow in the subsequent clauses, and the subsequent clauses make it perfectly clear that the members of the family of the settlor were to be the first objects of charity, both in respect of maintenance and also for marriage expenses. It is only after all the members of the family were exhausted that a section of the public, the Vaishyas or other Hindoos, would come in for benefit under the trust. It is not even, as Sir Jamshedji contended, a preference given to the members of the settlor's family. As I understand "preference" it means that all other things being equal you prefer a person who satisfies certain other qualifications. But the object of this trust is not for preferring members of the settlor's family if the conditions were alike when compared to the poor members of the Hindoo community. The whole intent and object is that the trust should constitute a first charge in favour of the poor members of the settlor's family. It is only when that first charge is satisfied that the members of the public may come in for any benefit under the trust. In my opinion the benefit which is reserved for the public under the trust deed is much too remote and much too illusory for being held that this is a trust which has its object, 'general public utility".