Case: Hazarat Pirmahomed Shah Saheb Roza Committee Vs. Commissioner of Income Tax, Gujarat

doctrine, all Muslims, whether Murids or non-Murids, had unrestricted access to the Roza and the mosque. It was further held that the income of the Roza properties after payment of municipal taxes, insurance premia, etc., was utilised for maintenance of the Roza and the mosque and the observance of the festive occasions such as Urs, death anniversaries, etc. It appears from the statement of receipts and expenditure for the years 1942-43 to 1956-57 produced before the Appellate Tribunal that a part of the surplus income of the properties was also utilised for running madrassas, library and for langar and bhandar for giving food to pilgrims attending the Roza and the mosque on festive occasions. There was, however, no evidence before the Appellate Tribunal to show that any portion of the income of the wakf was utilised for madrassas or library prior to the year 1942-43. The Tribunal therefore held that the original purpose of the wakf was confined to the maintenance of the Roza and the mosque and celebration of festive occasions and therefore the wakf was established for a wholly religious purpose. At the hearing of the reference, the High Court has interfered with the finding of the Tribunal on this point. The High Court considered that the maintenance of madrassas and the library must be taken to be one of the original purposes of the wakf and the finding of the Tribunal that the wakf was wholly for a religious purpose must be overruled. It is manifest that the question as to what was the object of the wakf is essentially a question of fact and the High Court had, therefore, no justification for interfering with the finding of the Tribunal on this point. It was pointed out by this court in India Cements Ltd. v. Commissioner of Income-tax that in a reference under section 66 of the Act the High Court must accept the findings of fact made by the Appellate Tribunal, and it is not open to the High Court to reopen the findings of fact unless the party concerned has applied for a reference to challenge those findings first by an application under section 66(1) of the Act. If he has failed to file an application expressly raising the question about the validity of the findings of fact, he is not entitled to urge before the High Court that the findings are vitiated for one reason or another. Similarly, in another case, Commissioner of Income-tax v. M. Ganapathi Mudaliar, it has been pointed out that, even if the question referred to the High Court is regarding the existence of material to support a finding of fact arrived at by the Appellate Tribunal, the High Court should not act as an appellate court and consider whether the finding was justified or not. In the present case, we think that there was no warrant for the High Court to interfere with the finding of the Appellate Tribunal that the purpose of the wakf was wholly religious and the maintenance of madrassas and library from 1942-43 onwards was not the original purpose for which the properties were gifted by the Murids, and that the allotment of money for the maintenance of madrassas and library did not alter the original character of the wakf which was established for a wholly religious purpose, viz., for the maintenance of the Roza and the mosque and the observance of festive occasions such as Urs and death anniversaries, etc., at these institutions. It has been stated by the Appellate Tribunal that the benefit of the wakf was available to all Muslims whether Murids or non-Murids who had unrestricted access to the Roza and the mosque and the festivities celebrated therein. Upon the facts found by the Appellate Tribunal we are of opinion that the Roza properties were held for a wholly religious purpose of a public character and therefore the income of the Roza properties was exempt from assessment under section 4(3)(i) of the ActOn behalf of the appellant an alternative argument was presented that the class of Murids constituted an appreciable section of the Sunni Bohra community and the income from the Roza properties was exempt from assessment on the ground that the Roza properties were held under a legal obligation for a wholly charitable purpose. The opposite view-point was put forward on behalf of the respondent and it was said that the class of Murids did not constitute a section of the community but was merely a fluctuating body of private individuals. In support of this argument reference was made to the decision of the House of Lords in Oppenheim v. Tobacco Securities Trust Co. Ltd., where it was held that, though the group of persons indicated was numerous, the nexus between them was employment by particular employers, and accordingly the trust did not satisfy the test of public benefit requisite to establish it as charitable. Reference was also made to a later decision in Mohamed Falil Abdul Caffoor and Others (Trustees of the Abdul Caffoor Trust) v. Commissioner of Income-tax, Colombo, in which it was held by the Judicial Committee that in view of the absolute priority to the benefit of the trust income which was conferred on the grantors own family by clause (2)(b)(i) of the trust deed, this was a family trust and not a trust of a public character wholly for charitable purpose, and the income thereof was accordingly not entitled to the exemption claimed by the appellant. In our opinion, it is not necessary to express any concluded opinion on this aspect of the case, because we have already held that the appellant is entitled to exemption from being taxed on the ground that the income was derived from property held under a legal obligation wholly for a religious purpose4. For these reasons we hold that the judgment of the High Court should be set aside and the questions referred to the High Court must be answered in the affirmative and in favour of the assessee.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]In the present case, we think that there was no warrant for the High Court to interfere with the finding of the Appellate Tribunal that the purpose of the wakf was wholly religious and the maintenance of madrassas and library fromonwards was not the original purpose for which the properties were gifted by the Murids, and that the allotment of money for the maintenance of madrassas and library did not alter the original character of the wakf which was established for a wholly religious purpose, viz., for the maintenance of the Roza and the mosque and the observance of festive occasions such as Urs and death anniversaries, etc., at these institutions. It has been stated by the Appellate Tribunal that the benefit of the wakf was available to all Muslims whether Murids orwho had unrestricted access to the Roza and the mosque and the festivities celebrated therein. Upon the facts found by the Appellate Tribunal we are of opinion that the Roza properties were held for a wholly religious purpose of a public character and therefore the income of the Roza properties was exempt from assessment under section 4(3)(i) of the ActOn behalf of the appellant an alternative argument was presented that the class of Murids constituted an appreciable section of the Sunni Bohra community and the income from the Roza properties was exempt from assessment on the ground that the Roza properties were held under a legal obligation for a wholly charitable purpose. The oppositewas put forward on behalf of the respondent and it was said that the class of Murids did not constitute a section of the community but was merely a fluctuating body of private individuals. In support of this argument reference was made to the decision of the House of Lords in Oppenheim v. Tobacco Securities Trust Co. Ltd., where it was held that, though the group of persons indicated was numerous, the nexus between them was employment by particular employers, and accordingly the trust did not satisfy the test of public benefit requisite to establish it as charitable. Reference was also made to a later decision in Mohamed Falil Abdul Caffoor and Others (Trustees of the Abdul Caffoor Trust) v. Commissioner ofFor these reasons we hold that the judgment of the High Court should be set aside and the questions referred to the High Court must be answered in the affirmative and in favour of the assessee. We accordingly allow these appeals with costs. There will be one consolidated hearing fee.