Appeal No 397 of 1960
Appeal from the judgment and order dated  November 24 1958 of the Kerala High Court ill I T R No 23 of 1957
K N Rajagopala Sastri and I PC Menon for the appellant
A V Viswanatha Sastri Narayanaswami and R Gopalakrishnan for the respondent
August 14
The Judgment of the Court was delivered by SUBBA RAO J
This appeal by certificate  granted by the High Court of Kerala raises the question of the application of a 411 of the Indian Income tax Act hereinafter calledthe Act to the fact of the case
139 One P B Umbichi and his wife executed a deed dated December 20 1915 creating thereunder a wakf of their properties
It was provided therein
 inter alia that the income from the properties mentioned therein should be utilised for the maintenance of their two daughters and their children on the female side
For 40 years upto and inclusive of the assessment year 1954 55 the income tax assessments were made on the wakf through its manager under section 41 of the Act in the status of an individual
But for the assessment year 1955 56 the Income tax Officer treated the assessee as an association of persons and on the ground that the shares of the beneficiaries are indeterminate levied tax at the maximum rate under the first proviso to section 41 of the Act
On appeal the Appellate Assistant Commissioner of Income tax held that the Income tax Officer was not right in holding that the members of the family were indeterminate but he confirmed the assessment for the reason that the shares were not specified among the individual members of the family and also between the members of the family on the one hand and the charitable and religious purposes on the other the first proviso to section 41 would be applicable to the assessee
On further appeal the Income tax Appellate Tribunal took the View that the proprietary rights in the property in question vested in the Almighty and that the Mutawalli was only to look after ant administer the properties as a manager and therefore the proper person in whose hands the income from the properties should be assessed was the Mutawalli in his status as an individual at the rates applicable to an individual
ID that view the appeal was allowed
At the instance of the Commissioner of Income tax the Appellate Tribunal referred to the High Court of Kerala the following question for its determination  Whether in the facts and circumstances of the case the first proviso to section 41 is applicable
140 The High Court held that the said proviso was not applicable as under the wakf deed the beneficiaries and their shares were ascertainable
Aggrieved by the said order the Commissioner of Income tax has preferred the present appeal
Mr Rajagopala Sastri learned counsel for the Commissioner of Income tax contended that on a fair reading of the terms of the wakf deed it would be clear that the Mutawalli was only directed to maintain the members of the family that none of the members of the family had any ascertainable hare in the income and that therefore the case squarely fell within the first proviso to section 41 of the Act
Mr Viswanatha Sastri learned counsel
for the respondent in addition to his attempt to sustain the construction put upon the wakf deed by the High Court contended that the instant case fell outside the scope of section 411 of the Act as the Mutawalli was only receiving the income on behalf of the Almighty that the Almighty was not a Person and that therefore as the main section lid not apply the proviso also would not be attracted with the result that the Muta award would have to be assessed as an individual
As the argument turns upon the construction of section 41 of the Act it will be convenient atthe outset to read the relevant parts thereof
Section 41  1 In the case of income profits or gains chargeable under this Act which any trustee or trustees appointed under a trust declared by a duly executed instrument in writing whether testamentary or otherwise including the trustee or trustees under any Wakf deed which is valid
under the  are entitled to receive on behalf of any person the tax shall be levied upon and recoverable from such trustee trustees 141 in the like manner and to the same amount as it would be leviable upon and recoverable from the pers on on whose behalf such income
profits or gains are receivable and all the provisions of this Act shall apply accordingly  Provided that where any such income profits or gains or any part thereof are not specifically receivable on behalf of any one person or where the individual shares of the persons on whose behalf they are receivable are indeterminate or unknown the tax shall be levied and recoverable at the maximum rate but where such persons have no other personal income chargeable under this Act and none of them is an artificial juridical person as if such income profits or gains or such part thereof were the total income of an association of persons
 This section in term s applies to a trustee under a wakf deed which is valid under the 
Under the substantive part of
the section tax is leviable on the trustee of the wakf in the like manner and to the same amount as it would be leviable upon and recoverable from the beneficiarythat isthe assessment would be at the individual rates of tax applicable to the beneficiary
But under the first proviso to that section there are two exceptions to the general rule viz 1 where the income is not specifically receivable on behalf of anyone person and ii where the individual shares of the persons on whose behalf the income is receivable are indeterminate or unknown
In those two circumstances tax shall be levied and recoverable at the maximum rate
It is agreed that the first exception does not apply to the instant case
But the question that falls to be decided is whether the individual shares of the persons on whose behalf the income is receivable are indeterminate or unknown
The answer to the question depends upon the construction of the 142 provisions of the Wakf deed
The Wakf deed was executed on December 20 1950 by Umbichi and his wife dedicating their entire property moveable and immoveable of total value of rupees one lakh for the objects mentioned therein
The Mutawalli appointed thereunder was directed to manage the properties in such a way as to do acts necessary for charitable purposes and to meet the maintenance expenses of their children and grand children and the female children that might be born to them in future and to the male children born to the said female children
The document proceeded to give further specific directions in the management of the properties
After payment of taxes and meeting the expenses incurred for repairs and maintenance of the properties the balance of the income should be utilised for the daily necessary expenses of the house and food expenses as we are doing now and for purchasing dresses and other necessities for the then male and female members of the tarwad and for conducting nerchas ceremonies such as Yasin Moulooth etc charitable ceremonies for feeding the poor and such other necessary expenses  and out of the balance if any the Mutawalli was directed to acquire properties yielding good income
The rest of the recitals in the document are not relevant for the present purpose
Can it be said that under the document the individual shares of the beneficiaries are specified  The document does not expressly specify the shares of the beneficiaries nor does it do so by necessary implication
Indeed  the individual shares of the beneficiaries Are not germane to the objects of the document
The Mutawalli was directed to bear out of the income the expenses necessary for maintaining the members of the tarwad and to conduct the necessary religious ceremonies
The distribution of the family income and family expenses was left to the discretion of the 143 Mutawalli the document also further contemplated that the Mutawalli by his prudent and efficient management would save sufficient amounts for purchasing properties
The directions indicate beyond any reasonable doubt that no specified share of the income was given to any of the benefit series and their right was nothing more than to be maintained having regard to their reasonable requirements which were left to the discretion of Mutawalli
While it is true that the number of beneficiaries would be ascertainable at any given point of time it is not possible  to hold as the High Court held that under the document the beneficiaries had equal shares in the income
The beneficiaries had no specified share in the income but only had the right to be maintained
The construction put upon the document by the High Court cannot therefore be sustained on the plain wording of the document We therefore bold that under the terms of the document the individual shares of the beneficiaries are indeterminate within the meaning of the first proviso to section 411 of the Act
If so under the said proviso the assessee is liable to pay income tax at the maximum rate
The alternative contention of learned counsel for the respondent remains to be considered
The argument is that under the Wakf deed the properties vest in the Almighty and therefore the Mutawalli receives the income only on behalf of the Almighty and not on behalf of any person within the  meaning of section 411 of the Act with the result that section 411 is not applicable to the assessment in question
The argument is rather subtle but it has no force
There are three effective answers to this contention Firstly it was not raised before the High Court the only question argued before the High Court was whether the beneficiaries of the trust and their individual shares of the income of the trust were ascertainable
144 Secondly though under the Mahomedan Law the properties dedicated under a Wakf deed belong to the Almighty it is only in the ideal sense for the Mutawalli in the name of the Almighty utilises the income for the purposes and for the benefit of the beneficiaries mentioned therein
Under the Mahomedan Law the moment a Wakf is created all rights of property pass out of the wakf and vest in the Almighty The property does not vestin the Mutawalli for he is merely a manager and not a trustee in the technical sense Though Wakf property belongs to the Almighty the practical significance of that concept is explained ill Jeuwun Dass Sahoo vs Shah Kubeer ood deen 1 thus     
Wakf signifies the appropriation of a particular article in
such a manner as subjects it to the rules of divine property whence the appropriator s right in it is extinguished and it becomes a property of God by the advantage of it resulting to his creatures 
 That is though in an ideal sense the property yet in the Almighty the property is held for the benefit of His creatures that is the beneflciaries Though at one time it was considered that to constitute a valid Wakf there must be dedication of property solely to tbe Worship of God or for regious or charitable purposes the Wakf Validating Act 1913 discarded that view and enacted by section 3 that a Mussalman can create a wakf for the maintenance and support wholly or partially of his family children or descendantsprovided the ultimate benefit is expressly or impliedly reserved for the poor or for any other purpose recognised by the Mussalman law as a religious pious or charitable purpose of a permanent character
Section 4 of the said Act goes further and says that a wakf shall not be invalid by the mere  circumstance that tile benefit 1 18402
MIA 390 421
145 reserved for the poor or for religious purposes is postponed until the extinction of the family It is therefore manifest that under the Mahomedan Law the property vests only in the Almighty but the Mutawalli acting in  His name utilises the income for the advantage of the beneficiaries
Therefore the words on behalf of any person in section 41 of the Act  can only mean on behalf of the beneficiaries and not on behalf of the Almighty
The third and more effective answer to the argument is that section 411 of the Act provides for a vicarious assessment in order to facilitate the levy and collection of income tax  from a trustee in respect of income of the  beneficiarios
In express terms it equates the Mutawalli of a wakf to a trustee
For the purpose of section 41 the Mutawalli is treated as a trustee and on the analogy of a trustee he holds the property for the benefit of the beneficiaries
There is no scope for importing the Mahomedan Law of Wakf in section 41 when the section in express terms treats the Mutawalli as a trustee though he is not one in the technical sense under the Mahome dan Law
If the argument of learned counsel for the respondent be accepted it would make section 41 of the Act otiose so far as wakfs are concerned for in every case of wakf the property I would be held for the Almighty and not for any person
We therefore reject this contention and answer the question in the affirmative
In the result we set aside the order of the High Court and hold that the respondent was rightly assessed by the Income tax Officer at the maximum rate
The appeal is allowed with costs
Appeal Allowed


Summary:
The question for determination in the appeal was whether the wakf in question should be assessed to tax under s41 1 of the Indian Income tax Act
1922 through the manager as individual or as an association of persons at the maximum rate under the first proviso to that section on the ground that the individual shares of the beneficiaries were indeterminate and unknown
The wakf deed directed the mutawalli to do acts necessary for charitable purposes and to meet the maintenance expenses of the wakif s children grand children the female children born in the future and the male children born to the said female children and after payment of taxes and meeting of expenses for repairsand maintenance of properties to utilise the balance of the income for daily necessary expenses of the house and for food for purchasing dresses and other necessities for the and female members of the tarwad
for conducting specified ceremonies for feeding the poor and for
meeting such
other then necessary expenses and thereafter to utilise the balance if any in acquiring properties yielding good income
138 Held that under the terms of the wakf deed the individual shares of the beneficiaries were indeterminate within the meaning of the first proviso to s41 1 of the Indian Income tax Act 1922 and as such the assessee was liable to pay income tax thereunder at the maximum rate
It was not correct in view of ss3 and 4 of the  to say that under the wakf deed the property vested in the Almighty and the Mutawalli did not therefore receive the income on behalf of any person within the meaning of s41 1 of the Indian Income Tax Act and as such the proviso could not come into operation
Under the Mahomedan law wakf property vests in the Almighty only in an ideal sense and the Mutawalli acting in his name utilises the income for the advantage of the beneficiaries
The words on behalf of any person in s41 of  the Act therefore could only mean on behalf of the beneficiaries and not on behalf of the Almighty
Jewun Doss Sahoo vs Shah Kubeer ood deen 1 841 2 MI A 390 referred to
Held further that there was no scope for importing the Mahomedan Law of wakf in s41 of the Act since that section in express terms treated the Mutawalli as a trustee though he is not one in the technical sense under the Mohamedan Law