Case: Trustees of Gordhandas Govindram Family Charity Trust Vs. Commissioner of Income Tax, Bombay

3. The facts of this case lie within a narrow compass. Govindram Gordhandas Seksaria, Ramnath Gordhandas Seksaria, Makhanlal Gordhandas Seksaria and Bholaram Gordhandas Seksaria constituted a Trust on June 11, 1941 in respect of a sum of Rs. 11 lac (Rupees eleven lacs). That Trust was known as Gordhandas Govindram Family Trust. Clause (2) of the Trust deed says that it was created "for 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 hereinafter specified and subjects to the conditions and directions stated in the next following clauses and/or for the charitable object or objects hereinafter mentioned." Clause (3) (a) of the Trust deed provides that "the conditions and directions to be observed and followed by the Trustees in the execution of the Trusts herein declared are as follows :-"Poor Vaishya Hindoos who are members of Seksaria families shall be preferred to poor Vaishya Hindoos of Navalgadh not belonging to that family."4. Sub-clauses (b) to (q) provide for the payment of maintenance and marriage expenses of the poor male or female descendants of Seksaria family.      5. We shall now set out sub-clauses (r) to (u) of clause (3). They read :-"(r) Rs. 5/- (Rupees five) per month may be paid as and by way of maintenance of any poor male Vaishya Hindoo who may be deserving of help.      (s) Rs. 5/- (Rupees five) per month may be paid as and by way of maintenance to any poor unmarried female Vaishya Hindoo or a poor Vaishya Hindoo or a poor Vaishya Hindoo widow who may be deserving of help.      (t) Rs. 500/- (Rupees five hundred) may be expended or given for the purpose of meeting the expenses of marriage of any poor male Vaishya Hindoo who may be deserving of help.      (u) Rs. 500/- (Rupees five hundred) may be expended or given for the purpose of meeting the expenses of marriage of any poor female Vaishya Hindoo who may be deserving of help."The deed further provides :-"If the income of the Trust Estate is not sufficient to carry out the charities specified in sub-clauses (a) to (u) above the charity specified in an earlier sub-clause shall be given priority over a charity specified in a later sub-clause."6. From the above, it is clear that charity provided was primarily for the benefit of the members of the family of Seksaria, no doubt including both male and female descendants. It is also clear from the deed that the amounts provided for the payment of maintenance and marriage expenses for the poor members of the Seksaria family is bound to take away a substantial part of the income of the trust, if not the whole of it.      7. As mentioned earlier, the Trust is known as "Gordhandas Govindram Family Trust". That is a clear pointer. That shows that the Trust was primarily intended for the benefit of the family of Gordhandas Govindram. This is made further clear from the various provisions in the Trust deed. A reading of the Trust deed as a whole clearly goes to prove that the charity under that deed begins with the family of Gordhandas Govindram and possibly ends with it. Charity in favour of the Vaishya Hindoos other than the members of the family of Gordhandas Govindram is not only marginal, but also quite tenuous.

Court's reasoning:
14. In Suhashini Karuri v. Wealth Tax Officer, Calcutta, (1962) 46 ITR 953 (Cal.) , the Calcutta High Court opined that the joint trustees could be assessed as individuals under the Act. A similar view was taken by the Bombay High Court in Abhay L. Khatau v. Commr. of Wealth Tax, Bombay City II, (1965) 57 ITR 202 (Bom.) . We are in agreement with that view. We, accordingly, agree with the High Court and hold that the trustees of the trust, with which we are concerned in these appeals, constitute an assessable unit under the provisions of the Act15. Now, let us turn to the other question viz. whether the trust in question can be considered as a trust created for public purpose of a charitable or religious nature. As seen earlier, the trust in question was created primarily for the benefit of the members of the family of Gordhandas Govindram Seksaria. That is clear from the title given to the Trust as well as from the various provisions to which we have made reference earlier. Therefore, it is not possible to hold that the Trust in question is a Trust for any public purpose. It is clearly a private Trust. The character of the Trust in question came to be considered by the Bombay High Court in Trustees of Gordhandas Govindram Family Charity Trust v. Commr. of Income-tax (Central), Bombay, 21 ITR 231  at p. 237 = (AIR 1952 Bom 346 ), under Section 4 (3) (i) of the Indian Income-tax Act. After examining the various provisions, the High Court opined that it was not a trust for charitable purpose within the meaning of Indian Income-tax Act, 1922. It was held that the primary purpose of the settlor was to benefit the members of his family and remotely and indirectly to benefit the general public. We agree with that conclusion. The decision in the above case came up for consideration by this Court in Trustees of the Charity Fund v. Commr. of Income-tax, Bombay, 36 ITR 513  = (AIR 1959 SC 1060 ). This Court did not differ from the view taken by the High Court. But distinguished the same.