Case: Commissioner Of Income-Tax, Keralaand Coimbatore Vs. Puthiya Ponmanichintakam. Wakfmanager P. P. Ayesha Bi Bi

not relevant for the present purpose.6. 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 Muthawalli 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 Muthawalli; the document also further contemplated that the Muthawalli by his prudent and efficient management would save sufficient amount; for purchasing properties. The directions indicate beyond any reasonable doubt that no specified share of the income was given to any of the beneficiaries, and their right was nothing more than to be maintained having regard to their reasonable requirements which were left to the discretion of Muthawalli. 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, hold that under the terms of the document the individual shares of the beneficiaries are indeterminate within the meaning of the first proviso to S. 41(1) of the Act. If so, under the said proviso the assessee is liable to pay income-tax at the maximum rate.7. 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 Muthawalli receives the income only on behalf of the Almighty and not on behalf of any person within the meaning of S. 41(1) of the Act, with the result that S. 41 (1) 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:8. 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.9. 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 Muthawalli 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 wakif and vest in the Almighty. The property does not vest in the Muthawalli, 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 in Jewan Doss Sahoo v. Shah Kubeer-ood-deen, 2 Moo Ind App 390 (421) (PC) thus:"... . . . . . .. . . Wakf signifies the appropriation if a particular article in such a manner as subjects it to the rules of divine property, hence the appropriators 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 vests in the Almighty, the property is held for the benefit of His creatures, that is the beneficiaries. Though at one time it was considered that to constitute a valid Wakf there must be dedication of property solely to the worship of God or for religious or charitable purposes the Wakf Validating Act, 1913, discarded that view and enacted by S. 3 that a Mussalman can create a wakf for the maintenance and support, wholly or partially, of his family, children or descendants provided the ultimate benefit is expressly or impliedly reserved for the poor or for any other purpose recognized 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 the benefit 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 Muthawalli acting in His name, utilises the income for the advantage of the beneficiaries. Therefore the words "on behalf of any person in S. 41 of the Act can only mean on behalf of the beneficiaries and not on behalf of the Almighty.10. The third and more effective answer to the argument is that S. 41(1) 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 beneficiaries. In express terms it equates the Muthawalli of a wakf to a trustee. For the purpose of S. 41 the Muthawalli 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 S. 41, when the section in express terms treats the Muthawalli as a trustee, though he is not one in the technical sense under the Mahomedan Law. If the argument of learned counsel for the respondent be accepted, would make S. 41 of the Act otiose so far as wakfs are concerned, for in every case of wakf the property would be held for the Almighty and not for any person. We, therefore, reject this contention and answer the question in the affirmative.

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

Explanation:
1[ds]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 provisions of the Wakf deed. The Wakf deed was executed on December 20 1915 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 Muthawalli 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 feedling the poor and such other necessary expenses", and out of the balance if any, the Muthawalli was directed to acquire properties yielding good income. The rest of the recitals in the document are not relevant for the presentdocument 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 Muthawalli 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 Muthawalli; the document also further contemplated that the Muthawalli by his prudent and efficient management would save sufficient amount; for purchasing properties. The directions indicate beyond any reasonable doubt that no specified share of the income was given to any of the beneficiaries, and their right was nothing more than to be maintained having regard to their reasonable requirements which were left to the discretion of Muthawalli. 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, hold that under the terms of the document the individual shares of the beneficiaries are indeterminate within the meaning of the first proviso to S. 41(1) of the Act. If so, under the said proviso the assessee is liable to pay income-tax at the maximumis, though in an ideal sense the property vests in the Almighty, the property is held for the benefit of His creatures, that is the beneficiaries. Though at one time it was considered that to constitute a valid Wakf there must be dedication of property solely to the worship of God or for religious or charitable purposes the Wakf Validating Act, 1913, discarded that view and enacted by S. 3 that a Mussalman can create a wakf for the maintenance and support, wholly or partially, of his family, children or descendants provided the ultimate benefit is expressly or impliedly reserved for the poor or for any other purpose recognized 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 the benefit 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 Muthawalli acting in His name, utilises the income for the advantage of the beneficiaries. Therefore the words "on behalf of any person in S. 41 of the Act can only mean on behalf of the beneficiaries and not on behalf of the Almighty.10. The third and more effective answer to the argument is that S. 41(1) 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 beneficiaries. In express terms it equates the Muthawalli of a wakf to a trustee. For the purpose of S. 41 the Muthawalli 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 S. 41, when the section in express terms treats the Muthawalli as a trustee, though he is not one in the technical sense under the Mahomedan Law. If the argument of learned counsel for the respondent be accepted, would make S. 41 of the Act otiose so far as wakfs are concerned, for in every case of wakf the property would be held for the Almighty and not for any person. We, therefore, reject this contention and answer the question in the affirmative.