Law: Income Tax Act, 1922

Section: 4(3)(i)

Income-tax--Charitable trusts-Exemption-Installation of idols and dedication of properties for worship and puja and sadabrata, for upkeep or Sanskrit patasala and Dharamsala-Management vesting in settlor's family-Trust whether a public charitable trust Exemption" Family deity", "sadabrata", meanings of-Indian Income-tax Act, 1922, S. 4(3)(i). The settlors of a trust installed a temple of Rama, Sita and Lakshman in a bazar area and settled some properties in trust for the following purposes : (1) to use Rs. 250 per month out of the income to carry on the worship and puja of the abovesaid deities and sadabrata, (2) to spend Rs. 25 per month for upkeep of a dharamsala, (3) to spend Rs. 125 a month for a Sanskrit patasala, (4) to pay an annuity of Rs. 50 and Rs. 20'per month to two female members of the settlor's family for their life [cl. d] ; (5) to pay Rs. 50 per month to each of the settlors to be spent by them for public charitable purposes ; (6) the balance to be kept as a reserve fund to be resorted to if income was insufficient for the foregoing purposes, and to be spent for alms to the poor or contributions for hospitals or educational institutions as the trustees deemed fit with the consent of the settlors The income tax authorities and the Tribunal held that the trust was not of a public charitable nature on the following grounds : (i) the students of the Sanskrit patasala were all Brahmins, (ii) the dharamsala was in a dilapidated condition, (iii) the Sadhus and Brahmins to whom the prasad was distributed after the pujas could not be regarded as the public, (iv) distribution of alms to the poor and the public was done even in private temples, and (v) the temple was managed by members of the settlor's family and the public hid no control over the management of the pujas. On a reference to the High Court: Held, (i) a trust may be of a public charitable nature even if the control of the trust property was not vested in the public but was retained by the settlors: (ii) "family deities" ordinarily mean deities installed by members of the family in a part of their residential house for being worshipped by the…