Law: Income Tax Act, 1922

Section: 4(3)(i),66(1)(2)

Income-tax Act, 1922 -- Section 4(3)(i) proviso 13 -- Trust -- Religious and charitable trust -- Business carried on behalf of trust -- In terms of the deed of trust three-fourth of income applied to religious and charitable objects -- One-fourth appropriated for use of settler and his family -- Three-fourth income of trust business, whether exempt from tax -- Held, to the extent actually expended and applied for the purpose of trust and excluding income from business neither carried on in the course of carrying out of religious or charitable purpose of the institution nor carried on by the beneficiaries of the trust -- Principle of res judicata -- Practice of ignoring Tribunal's decision without fresh materials deprecated -- Charitable trust -- Exemption available on that portion of income which is set apart for religious and charitable purposes -- Provisions do not require that whole income from trust be spent -- Income not spent for such purposes is taxable -- Income-tax -- Principle of res judicata -- Applicability -- Reopening of issue decided in appeal against earlier year's assessment -- Permissibility -- Charitable trust -- Business carried on behalf of Charitable Trust -- Income from sale of commodities not manufactured in course of carrying on its purposes -- Not exempt -- Nature of business must also be of charitable or religious nature -- Absence of proper purchase vouchers and manufacturing account -- Rejection of book version justified - ORDER The order was passed by NUR ILLAHI, President.---These are three direct appeals by the assessee against the assessments made on it in respect of the charge years 1955-56, 1956-57 and 1957-58. As precisely the same questions are involved in all the three appeals we propose to dispose them of by this one and the same order. The appellant is B Dawakhana, Trust having business at Karachi, Lahore and Dacca with the head office at Karachi. Mr. S (hereinafter called Hakim Sahib) is the main figure of the concern. As the admitted story goes somewhere in 1906 father of Hakim Sahib set up an institution at Delhi to develop Unani and Islamic system of medicines. The old gentleman died sometime in 1922 whereafter Hakim…

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