NAWAB HABIBULLA Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THE appellant is the hereditary mutawalli of a waqf estate, and as such he draws remuneration, and the question in the appeal arises on a claim by him that the income thus received by him is exempt from taxation, which came before the High Court of Judicature at. Fort William in Bengal on a reference by the respondent, at the appellant's request, under Section 66(2) of the Indian Income-tax Act, 1922, with a statement of the case and the opinion of the respondent rejecting the appellant's claim to exemption. THE question of law referred to the Court was : Whether in the facts and circumstances of the case the sum of Rs. 49,500 received by the assessee as his remuneration as mutawalli was ' agricultural income' within the meaning of Section 2(1) of the Income-tax Act?"For the assessment year 1938-1939 the appellant was assessed for income-tax purposes on an amount which included the sum of Rs. 49,500 under the head of salaries, which was the appellant's remuneration as mutawalli for the year of account and included both current salary and arrears. It is admitted that the income of the waqf estate from which the appellant's said remuneration was drawn, was " agricultural income.

(2.) THE waqf was created by an ancestor of the appellant by a waqfnamah dated June 1, 1854. THE post of mutawalli was made hereditary, the waqifs son being first appointed. No benefit was reserved in any way either to the waqif himself or to his descendants and no remuneration was provided for by the waqfnamah for the post of the mutawalli. In 1925, a suit in the Court of the District Judge, Dacca, in which the removal of the appellant was sought, was compromised on the basis of a scheme of administration which had been filed before the High Court and agreed to by all parties, and a decree in terms thereof was made by the District Judge of Dacca on May 24, 1928. Under the scheme the appellant's remuneration was provided for as follows : 15. THE remuneration of the mutawalli payable from the waqf shall be rupees two thousand five hundred monthly together with a fixed allowance of rupees five hundred monthly for his conveyance the lighting of his apartments medical attendance and other personal charges incidental to his position.... It is enough to say that it is clear that under the scheme the appellant has only powers of management of the waqf estate and that those powers are limited in certain respects by the control of a committee of management.

(3.) IN the opinion of their Lordships, that case affords a useful contrast to the present case. The position of the asse,ssee in that case had been described by the Chief Justice of Patna-and this Board adopted the description-as follows (p. 221): The mortgagee-lessee was to be in possession of both properties, and, in his relation to the cultivators of the soil he stood in the position of landlord, dealing directly with them and collecting the rents. He had moreover to pay the Government revenue, cesses and taxes and his name was registered in the Land Registration Department. He alone was able to sue for rent whether current or arrears, to sue for enhancement or for ejectment and was able to settle lands with raiyats and tenants in all the properties, in fact he was in a position to take all proceedings which the mortgagor would have been able to take in the ordinary course if the lands leased and mortgaged had remained in her khas possession. Accordingly, the assessee collected the rents directly in his own right and the amount of his income therefrom depended on his exercise of these rights. The position of the appellant is very different :-the recovery of the rents depends on the rights of the waqf estate, and on the appellant's performance of his duties of managements as mutawalli, and the amount of his remuneration does not depend either on the nature of the properties or assets which constitute the waqf estate, nor on the amount of the income derived therefrom by the waqf estate. If, as might possibly happen, the whole or a portion of the waqf property ceased to be represented by agricultural lands, it is clear that the remuneration fixed by Article 15 of the scheme would not be affected.