Law: Income Tax Act (XI of 1922)

Section:

Income tax Act (XI of 1922)----   ----- S. 41 Manager Religious trust Surplus distributable to beneficiaries Board of trustees-Managing trustee appointed in pursuance of scheme framed by Court Duty to allocate and distribute surplus to beneficiaries-Whether such Managing trustee "manager appointed under order of Court" Assessment how made.   The Nagore Durgah, which was consecrated to a Muslim saint, derived income from extensive properties and offerings made by devotees. The surplus of the income remaining after application for the purposes of the Durgah was, according to long usage, divided into 640 shares among the descendants of the foster son of the saint. There was no document of trust and the Durgah was managed by a body of hereditary trustees. In a scheme framed by the Court there was provision for the election by the board of trustees of one among the trustees as managing trustee for a period of three years. Under clause 43 of the scheme the managing trustee was entitled to receive all gifts intended for the Durgah and under clause 44 he had to prepare a balance sheet at the end of each Fasli year and declare the amount due to each beneficiary out of the surplus, prepare a list thereof and arrange for payment of the amount due to the beneficiaries. By a variation by the Court of the scheme the trustees were at liberty to appoint one or two of them as managing trustee or managing trustees for a period not exceeding five years :   Held, (i) that even assuming that the clauses in the scheme framed by the Court were permissible in nature, when the power so granted was exercised by the trustees it had to be related to the power specifically granted by the scheme. The appointment of the managing trustee (under the clause of the scheme authorising such appointment) was referable; to the order of the Court and must be regarded as having been made under the order of the Court ;   that though the estate of the Durgah might vest in the body of the trustees, thesurplus income was owned by the beneficiaries and the mangaging trustee was placed in charge of the management of the surplus divisible amongst the beneficiaries and his right…