Law:

Section:

JUDGMENT Srinivasan, J.-The question referred under section 66(1) of the Act for the decision of this court is "whether the provisions of section 41 can be said to apply to the assessee in this case." The assessments relate to the assessment years 1953-54 and 1954-55. The assessee is the managing trustees of Nagore Durgah. In order to appreciate the contention that has been raised, it is necessary to set out in brief the status of the trustees of Nagore Durgah. This Durgah situated in Tanjore District is of considerable historical and religious importance. A Muslim saint is entombed here. This Durgah has been endowed with large extents of properties. From these immoveable properties considerable income is derived, and "hundial" offerings are also made by the devotees. The Durgah is managed by a body of trustees called the nattamaigars. After application of the income for the purposes of the Durgah surplus is available, which, according to long usage, is divided into 640 shares among the descendants of Yusuf, the foster son of the saint. These beneficiaries go by the name of kasupangudars. It is common ground that there is no document of trust. The nattamaigars are hereditary trustees and the right of kasupangudars to the surplus has been recognised both by custom and by judicial decisions. The history of this trust is set out in some detail in the decision in the Trustees, Nagore Durgah v. Commissioner of Income-tax [1954] 26 ITR 805 (Mad.). Reference will be made to this decision in due course. Up to and including the assessment year 1952-53, the surplus income of the Durgah was assessed in the hands of the trustees of the Durgah as an "association of persons". In the case of the assessment proceedings for the years now in question, it was claimed before the department that the assessment should be made under section 41 of the Act. It was urged that the managing trustees of the Durgah managed the properties on behalf of the kasupangudars under the orders of court. This contention was not accepted partly for the reason that the estate vests in the trustees and also that even if managers have been appointed by the court, it was on terms agreed between parties.…

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