Sardar Bahadur S. Indra Singh Trust v. Commissioner Of Income Tax, Bengal

ATAUT ARIST Uto gaa fag ze aatH, MART aga, TART eT (Sardar Bahadur S. Indra Singh Trust ,Commissioner of Income-tax, West Bengal } (05 rete, 1971) (rate Ro Ho Rng ste Go Gao Taz) 77 gfoega sean daq dae (arate mast afafaaR), 1922 (1922et afefrar dear 11)—arer 4(3) (i)ale aud ara (aferafezaa zez) a waaT a arr ale Gary ore BTA HT eH cTfeaTT Ga A|| MAT TZ cara gitar aA as fasat F gas fag se seve a awa: Ta vara wl feet cafes are aa fee ag Tat SY aT TT aTaeTa@ oz faa anet ¢ afe wg cafes aaa stadt ar aia feet ate ara etTa Ta F ara Hrar f fe ara aw F gaara ae Ca Hawa Ht iadgeaBE THA a Gat ava wt faferarea B ate Var ary Aa HWA STAT ATT—-RITStgfeeaa MIT TL gennMART gaa FT BETA dee, 1922—are BI TBAT FI 66-¢ (2)—ee ar BF7weiter oriter aeat & ferg gee eqrares sre BE HITT gery fat TATT-|qa faa aa TeaaA ATaTAT RN TAMA TT AUIS GAaTE|agt STAI TVA eATTTIGA Bl HIT aarat arfet AAI Tar TATATTTafafaniea 3 alt Va NATTA aT HT TE ATA Get AAT Twat|7 ana ara ve Sued sata x a 10 faaraz, 1944 BY afsat featTa M1 Bt AM A oranda faatea ae 1960-61 Fi Aware aaa fag 4adtaret sara st 640,000 et F guia:awarza 640 wat aeafea far |confadt tga aT st fae He fear ate aaa eae Se seat ageAdTWY ae fear) star TAT Tz 1,28,000 aaa ar araia Meya gar we ala Ie TC aterWARS 4(3)(i) Fla * agare BT et ag TS arar1 eafaat fear fe A F wredla gaa ara sraHe ae TAHT afefaae, FT GS 1922 TAH aBrae F Ale Gels ete fe ae wr % sfaara (fenos) sr arat fear|marae afeartl Fag erat ea AT TT ATA HT feat fe aoa fag arefeat war 640 wav ar ara fafa ara aval ataeree migad(adler) 9fratfedt & aa at ofea sguar fag fara are aaa atta afeata ayaT Bt A It gat adler aT we at 1 afrwtT are ag amar fadfaaHUa IT Tea eaTaTaAT A aaTa fag are fag wy ara a fafrara szear fagag afufaaifea fear fe fratfedt araa< at aetat& sfsara ar gaat aah@ | Gem eqraraa & faata % faes ea eararag A ages ay aa at atta HAZBa ge,|| afafratfca—adaredl ca ata cata& | Tah Veer Gust steq Ftamiag fag A sa cara & steal Bt aaa Heafare Hat alt A, say featmeq seam at sift sr gare vel fear ar 1 carfaat & ara‘afardia we fratur. eara-facre & catfaal at arg var ara ofaréta wea 8 ofafes aval fear varei maraa fag are fear var aa caw fafeara aia at aa ata feu au Razareafafea at ae ate gafae cara ga Wad aH araet siea VA aes araiatFl SHAT J1 GA AAT ge gre, 4(3)(i) F ware TA Ge wea yl Aa.adtaret rar fea ay afsara ar eware g (Fe 11)1 sea rararaa at ofafsag at eet 66-g (2) F aela aTA saTAIA Fae attr wat feat 3 fe aaa ada axa % fae sogar31 ag acai2alt Var waraaa afafaara sada gat Alt TAH BMT ce HT TE AZata wat ad andl (tr 1)4| | fafa adtet afearicar: 1968 et fafar adie do 1885 ate 1971at fafaat sata ao 1084.| «1964 F arate fade der 21% aaa seq aa & ade AAT, 1967 ater fata Ae aaa H fees st TE aa 1a ADA Bl MTFait uae WIte aA, lo lo aM TIT(tat satel #):Fo sto saratait. Haat at AIT aTat aloUHoFare,dlo Uae aa,(atat adteat 4)Mito UAo Aas Wit alo Seo UAT raTaTaa at fata eatarfaqfa he cae Baz A fears earnfaafa as— ° . a dat ate arate amaaz afafian, 1922 (fae at vafafrara”.mer Tat @) AY ae 66(1) F aeta far qe fade A HaHa yea Maa & fafivay & geqa sat f 1 ea at oaat Fa cet ada aia wa 4sem rarararg era afafraa et arr 66-¢ (2) & ada see carga &BATT ITH EL Ia TATU H Tea qaTATFX ag ster saa faar 2 faAaa ea rarareaa A adie Heat H fre sage f1 ka qraraa a aa fafaatafear 3 fa tar saraqa ufafeara sareaa & att Ra wareBH grax gzwt ag acter wear agl aad tga area a adharet a 1971 wt fare gage &faa mazar ert 2214 Tiga fear atx saa sat fauta %fees, a 1968 Ftfafaer atta dear 1885 Haga at fara a, ata wt F far cavaraTay & fare erat atlcartrel et Gaarg wea H oearg gar ag fasadfaarat fa att 1g garra daz at arty arfataz facta wa 1971 atfafa acta deat 1084 % er A aerifea Ht aE a| 2. Seq aay. wt frafera fae ae at cet ga-gHIT F— (1) #ar ga ara qeqt F graze ge ate afefeafaat A afewa ug ata afufratiea fear e fo acare aaraa fag are feat qar erafafiater att fafa at afse & qu at ? Section: CONCLUSION SARDAR BAHADUR S. INDRA SINGH TRUST COMMISSIONER OF INCOME TAX, BENGAL August 25, 1971 [K. S. HEGDE AND A. N. GROYER, JJ.J Gift made to charitable trust-If valid. Income-tax Act, s. 4(.3) (i)-1/ the income of charitable trust arising from a gift will C<ugment the assessee -trust. The assessee is a charitable trust created under two trusts deeds. One of the trustees, gifted certain fully paid up equity shares to the trust. On the said share~ dividend accrued on w.hich tax was deducted at source. The trustees claimed that the said income of the assessee was exempt from pay-ment of Income-tax in view of s. 4(3) (i) of the Act and hence they claimed refund of the tax deducted at source. The Income-tax Officer refused to grant the refund on the ground that the trust deed did nllt con-tain any provision for recei~ts of gifts from outsiders and so the gift in <JUestion was not a valid gift. Th" Appellate Assistant Commissioner and the Tribunal held the gift valid and decided against the revenue. On reference, High Court held that the gift was a valid gift, but it d"d not have the effect of augmenting the assessee trust and the assessee was not entitled to get the refund of the tax. HELD : (i)That the gift was a valid gift. The trustees had accepted the gift. The trust ·deed does not prohibit the trustees from accepting a new gift. The trustees can accept gift from third parties for the purpose of furthering the objectives of the trust. So long as the trust deed did not prohibit from receiving such gifts and so long as the gift made did not in any manner impinge on the objects intended to be achieved by the Trust. In the present case, the shares gifted are vested in the appellant trust and therefore, the trust is entitled to the dividends received in respect of the gifted shares. Since the dividend is exempt from tax under s. 4(3) (i) the appellant is entitled to the refuncl claimed. [39'7 A-DJ CIVIL APPELLATE JURISDICTION :. Civil Appeals Nos. 1885 of 1968 and 1084 of 1971. Appeals from the judgment and order dated November 7, 1967 of the Calcutta High Coun in Income-tax Reference No. 21 of 1964. ' S. R. Banerjee, P. C. Bhartari, for the appellant (in both the appeals). V. S. Desai, P. L. luneja, R. N. Sachthey and B. D. Sharma, for the respondemt (in both the appeals). The Judgment of the Court was delivered by Begde, J. Both these appeals arise from the decision of the Calcutta High Court in a Reference under s. 66( 1) of the Indian Income-tax Act; 1922 (to be hereinafter referred to as 'the Act'). A The first of these two appeals was brought by the appellant Trust on '!he strength of a certificate granted by the High Court under s. 66(A)(2) of the Act. In that certificate all that we find is a bald statement by the High Court that the case is a fit one for appeal to this Court. This Court !las ruled that such a certificate is an invalid one and an appeal brought on the strength of such a B certificate is not maintainbale. It is for that reason, the appellant filed the Special Leave application No. 2214 of 1971 seeking special leave from this Court to appeal against the very judgment which was the subject matter of the appeal in Civil Appeal No. 1885 of 1968. After hearing the parties, we came to the conclu-sion that the leave asked for should be granted. That Petition is c now numbered as Civil Appeal No. 1084 of 1971. The two questions referred to the High Court are : " ( 1). Whether on the facts and in the circums-tances of the case, the Tribunal was right in holding that the gift made by Sardar Ajaib Singh was valid and complete in law ? ( 2) If the answer to the first question is in the affirmative then whether on the facts and in the circum-stances of the case, the assessee was entitled to · the refund of tax deducted at source on the dividends accru-ing on the shares gifted by Sardar A jaib Singh ?" E The High Court answered these quest1ons as follows : (2) afe cae vet aT sa aATTCAH F Ta ea GA AAA H geal& arart oe we ofefeafaatA azare aaraa fag ara fac qeBad we Mare ga ars araial ye Ma ae A Relat fae ae az Fsfaara & fag faatical geet ar?7 Seq raraTaa AF eat weal BT BAT ga TaTt faqr— :(1) azare aaraa fag ater feat nat ara fafaarea ote gat ataat ferg saat vata faaffedt cara ar dada sear aa at, ate (2) weare aoraa fag area fa me aati ae Megat AAare arate ot ata oc at weld fee me ae % sfserr } fae fasifetgmat wet at 3. Wa gh ga geal ot faare Hear eM aaa % faatay F gaafga @at adel & fra fafa ag & gare araeq 3 ag 1960-61 8 fram fougana Fa aT 31 Ars, 1960 Bl aarca at war, faatfedd ca Meret cara &.ot atta 10 faaraz, 1944 are eqra-faye % ada afsa fear aat arty oHsages rara-facre 10 waatt, 1951 ay fasarfza feat tar) seq ara-fataHora ® seeq va ware afaa & fe “eorfaat a ana-anaqz< ta daarmaar at watrat ay sofa & faq at agraar & fare farer fa carat ageeras frata At aad sar wae ufan sagm amé, aada 2a } favMATT BUA FT TY faraifewe gar’| cam fara F afua seeat a factafava Fo sitz facarc & eave feat aor frat ag ater at ag 2% fH eqray aed:atat S ara-are ea. arat & fre sqa att—ara att fan at afuafe h farstvar ara aa A at arafcat a) saad B fac arfs, <q at da ae feat far Far, faq ar ara qaar & ay area ae at fraral 2, gga sana % farQeraragy at geararaat ¥ wa-zara & fang, we caeg aaliag st aealfea wz,oe aga aT SaRT sara BTA F raat H fae, feat ww aah faarfaat& faq care at ara et mare ar argien ara (ata)aferfera star alcWET ate eae cee afera afead F far aia ate sencal FY saaeat HU& saat & far, ger eq 8 ar ura: araar arg eRa ate wo alo fafeaeH H omg gt Hwa ¥ far—eaa aqal wy ga facare aw ate WR aang * facmt 8 aaa F aera gu ww & faa ga aH fe era aat wear 3 aye/attal are ay agt seul A amar Fe fe carat ana-ang ae at gatfatarfrnre & gare te Peet salsa ar gavel B fre ar east srea wer,Sal AAMT HA al x sate Bt F far age eaara faata gre ws afewSIAM ANF|| 4. aiaret sara & earfaat § & cw card azare aomaa fag 2X arte23 waaty 1959 Has ce gage ETA ana640 weary (eft)wat, farat afer yer 6,40,000 ead ar,fraifeat at oeafta ax feuWe GAT ar at Ft 640 Mae at saw faat ura } qeawy sr sfadwaw HrUT MATT HY AHA ST we aTTA orca HT AAofeare ay arefegrearfreq ag rata sy de dal S ofeara far ary a arde B qe ara ag areaala& gga tar aét wt amar ar) carfaal % ga geargar et arde@ 1 Gra,1959 & waa va are sfamdia et fear ate ara ae faaeaa ak ud whmia of fare grave at searaar at ag fy ate carfaal & arte 5 Grad,1959 Wt 4 ard,1959 % adwegl arr saer aqaada ax fears F Tazaeafta az faa aeate a eofaat eo after ax fac aeyea Tad az1,28,000 way at aria Maya gar fra ae Mla Te at HT HY Haley HY TE|eaifaat @ ag aar fear fae ara ofeftam st eer 4(3)(i) ® aqarzfretted as) sat ara at ararat Haare & Ge wea {1 ga: BAA ala az amalar faa ae ae & sfaara ar arar fear| arene afaarey 9 ath ve afaerawl AAT HLA A eT ara ge gare HT fear fe ga cara-fara ¥, farada rare aarar mar ar, arett aafaaat & fag} daret (stam) ar tat(fagea) at oreq arafar mg gaarageafase adl ar ale safae aTza1zoeraa fag are fear aqar 640 wav art ara fafaare ara af at1 say agwa a} sqad fear fe wal ar eater ara ay } qearg sfadawaa a atkAST AZ AMA Mara arywa: wea oe gt sere faa ae wr F gfaara exerar era & fraffedl sarfta 2| §. faaifial 4 sa mae & fares agree orgaea (sitet) wr atte arwa afaare a faaifedl & wx & cfaerr B afeare ey ee arent at afew°agurar fe gang ae & ckua daz fasifed Bg & ale st ot Maya HF "l. The gift made by Sardar Ajaib Singh was a valid and complete gift but did not have the efiect of augmenting [1]the assessee trust, and 2. The assessee was not entitled to the refund of the tax deducted a1 source on dividends accrued on the shares gifted by Sardar Ajaib Singh ?" Now let us turn to the facts a< set out in the Statement of case. The assessment years with which we are concernd in these appeals is 1960-61 for which the relevant previous year ended on :\'larch 31, 1960 The assessee is a charitable Trust constitu-ted under a Trust Deed dated December 19, 1944. A supple-mentary Trust Deed was executed on January 10, 1951. In the first Trust Deed, the <Jbjects of the trust are mentioned as those that "Trustees may in their absolute discretion from time 10 time determine in-and towards the attainment assistance or support of such charitable purpose or purposes as 1he Trustees may in their unfettered iudgment deem to be the most deserving of support." The objects mentioned in the first deed were further elaborated in the second Deed which requires the Trustees to spend the income "amongst others for the advancement of learning and education and/ or ameliorations of the sufferings of all citizens of the Indian ·union, irresi;cctive of caste, colour or creed for mair.taining library or libraries for the free use of •the public 'in general who are residents of the Indian Union for fostering encouraging and providing the means of healthy recreation including teaching or singing classes or choruses for the residents of the Indian Union and for the purpose of providing music and instruments for the town and in the premises hereinbefore mentioned for meeting the expenses wholly or in part of the Khalsa High School and A. V. Middle SchQS>I~ to the extent and for and during such times as Jong as the trust continues and/ or to apply such income in simi-lar such objects as the [1]trus•tees may in their absolute discretion from time to time determine in and towards the attainment assis-tance and support of such charitable purpose or purposes as the Trus•ieozs may in •their unfettered judgment deem to be the most deservin,g of support." avell rai at ara faatfedt at ora et ate gate ala oe aeltdt fre ayat arafar aqaa21|oe6. sa arte & faeg fratgreat atta afese at atta aafi & ane fara a agaaia at fe cara aradt eafceal & ara siea Tet& fag aay adl¢ aaife cara-fata@ & tar ale aus aahATCA ar reaweefw amar azar ali ag dete ate at a€ fe ara ama a atcsfadazaita an, va: ae fate at efee & afafaarea atafraem A ag freadfara fe faaifeat ca ata Geral cara gate ag aaa Pearwaral & fearcarc& ait F ga eara-fate &, faa® gre ag gse feat war ar, fafa vat aryafraza 4 ag afaftaifea fear fs om ae Gare care TAA a art ae aalasea HUA H fre arfaare sHare S MX TT THT arare asrag fag gradav & ara ey faaifedt & fafirareag: sea fearde1 aegare afsacy 4frarat BT ate & at ag cecil aetter HY aa He fear gatadia A dafetaeal & sf free azar ent fac masse vet & atife ag ara aft gartavafan 2 fan| ad ¢ aaife afaaza| a va faam & faveSo afafraifia az 7. Har qea afaa fRat vat 3, afeazm are facae fata aBATS BWIBU, sea araiaa a gorge fag are feu ag ara at fafrara fag ag agasta arag fe ag afafraifer wea & gear fe caaaa ait arag fe ag afafraifer wea & gear fe caaaa aitg fe ag afafraifer wea & gear fe caaaa ait fe ag afafraifer wea & gear fe caaaa ait ag afafraifer wea & gear fe caaaa ait afafraifer wea & gear fe caaaa ait wea & gear fe caaaa ait & gear fe caaaa ait gear fe caaaa ait fe caaaa ait caaaa ait aitfafaareg %, sea eararaa a ag faseg faster fe saa aa at sara faaicatHUTT BT aasa Brat aglFate safe waza fag gre ara far qe TadOt MAAS Va ares Arata ae Mage A wetet faq ae az s ofaara s farfaeifedt snare atFtae a fase ga. cweqe fatal sala sta siafeserra art wan fafrarer aitg at rare za fag Te gaut wT carat aa TAT|tar AA ge ae sea Arata ar at carat aa qar| gafeau sa aratat Ht rareHY MIA ATAAT GSAT||| Batra) fag ag agasta arag fe ag afafraifer wea & gear fe caaaa ait arag fe ag afafraifer wea & gear fe caaaa aitg fe ag afafraifer wea & gear fe caaaa ait fe ag afafraifer wea & gear fe caaaa ait ag afafraifer wea & gear fe caaaa ait afafraifer wea & gear fe caaaa ait wea & gear fe caaaa ait & gear fe caaaa ait gear fe caaaa ait fe caaaa ait caaaa ait ait 8. seq araiaa % fag aaraeletAF far area & saga frsagfasrat & ga% fata wt gfza Gocga & ges 21 ate 22.9¢ soafaa s1 aAsoa earaTay F fata F sa aT Hl VaT BI F—| ‘feeg gat ana fara % far set ae e fe earfaal a faaeq % aq sfarda fear ar ar va ara & faatfedtrare ar dadawu H Tata F fae Paar ar saat sara ae ar fH aa fathead Famfaal & ara A ce gam eae gar wer Ae se oeaTaad! ataat ara at fratfedt-eare & wae & fag sonfne (aaaTT) wr aTwaaaat at| at aasif a ag acter at fs afaeraa eq & care at ataraeq FH dara, art ar fara sfaadta ea B fae amar wear_ ararern aval or | saat ag aca & fe ag tet aes toge aT + ayorafafas wa & oer ot | ga art H et ade 81 ara dar faema& St fare enfier ar aferay % fae Oat arcs aA ataa feat strat2faa oe saat ar saat fafa wear gat 3 ar fee ve ag ot A afsa aTve faeart aH sate at aaa & fe ag ard arcf are st aR ear feet ara cafe arsésa } Gad % fae sa afer ara ae aaa@i wa ea fasara F qraere wa & gay org ag eaaezar afenfaa matet aaa fe caret dara sfaadla wea ardat fad fe qex qa caraasate crag aar fear ae ar garafea we fear are ar fadfiaaet fear sre, afe sqaeqrraaal carfaal # ty afar fatafea acaazar & a ag arat wear gfeagaa dtd fe afer sa fate era yeaay oral aifan fae care ase fear vat ary tar sata dar & fa oacare & fae ot at fare azar 2, eaifazt a1 dara, era ar farataSarat are at afafes afte san dt at i 81 aa: garerag faarzvel & fe earfaat atfafafece srfeara ® aaa #afaf.sfaygta ttal, Wet cara ar dada awa a atc aa aeaiaaqiaae tAafefaare # arer 4(3) (i) ® qraz ar arar Hwa st eaaeaar at ofaaremeq gt”: Sardar Ajaib Singh one of the Trustees of the appellant Trust by his letter dated January 23, 1959 transferred 640 fully paid up equity shares of the face value of Rs. 6,40,000/-to the D assessee reserving to himself the right to revoke and recall the transfer or either the entire 640 shares or any portion thereto but not until the expiry of clear full seven years from the date of the delivery of the shares to the Trust. The Trustees by their letter dated February 1, 1959 accepted the offer and also the terms and conditions upon which the offer had been made and ratified the sam(: by the resolution& of the Trustees dated February 5, 1959 E and March 4, 1959. The shares were transferred and given deli-very of to the Trustees. On the said shares dividend amounting to Rs. 1,28,000/- accrued on which tax was deducted at the source. The Trustees claimed that the said income of the 11ssessee was exempt from payment of income-tax in view of s. 4 ( 3 )( i) of the Act. Hence they claimed refund of the tax F deducted at the source. The Income-tax Officer refused to grant the refund asked for on the ground that the Trust Deed under which the Trust was formed did not .contain any provision for receipt of donations or gifts from outsiders and therefore the gift made by Sardar Ajaib Singh of the 640 shares was not a valid gift. He also observed that the transfer of the shares was revoc-able alter seven years .and accordingly was a conditional transfer; hence the assessee was precluded from claiming the refund of the tax deducted at the source. The assessee appealed against that order to the Appellat~ Assistant Commissioner. That Officer upheld the assessee's right to the refund of tax on the ground that during the relevant H year the shares did belong to the assessee and the dividend in-come accruing thereon was rthe income of the assessee and there-fore refund of the tax deductl!d at the source was· allowable. The Department went up in appeal to the Lncome-tax Appel-late Tribunal as against that order. Before the Tribunal the Department contended that the Trust was not competent to receive gifts from outsiders. There being no clause in 'the Trust Deed empowering"the receipt ol such gifts. It was further contetded that the gift being conditional and revonble was invalid in the eye B of law. The Tribunal fot.nd that the assessee was a public charitable Trust and it was not limited in its scope of activities within the four corners of the Trust Deed by which it was created. A public charitable Trust, the Tribunal held, was entitled as of right to receive gifts and donations from the public and as such the gift of the shares made by Sardar Ajaib Singh had been validly c received by the assessee. The Tribunal accordingly dismissed the first contention raised on behalf of the Department. It is not necessary for us to refer to the facts relating to the second conten-tion as that matter is not in issue before us, now the same having been held against the Department by the Tribunal. While dealing with the reference made by the Tribunal, as D mentioned earlier, the High Court upheld the validity of the gift made by Ajaib Singh but strangely enough after holding that the gift in question was a valid one, it came to the conclusion that the said gift did not have the effect of augmenting the assessee's Trust and therefore the assessee was not entitled to-the refund of the tax deducted at the source on the dividend accrued on the E shares gifted by Ajaib Singh. To us these findings appear to be somewhat mutually conflicting. If the gift in question was a valid one then the Trust became the owner of the shares gifted. That being so it also became the owner of the dividends received. Hence those dividends will have to be considered as the income of the Trust The reason which persuaded the learned judges of the High Court for coming to the above conclusion are set out in their judgment at pp. 21 and 22 of the printed paper book. We shall quote that part of the High Court's judgment : 9. sea eararara & faary earartell & A as aearaT8, eB arawfet1 at at wares fag are fear mar ate earfeat aren sfandta fear aaara gw fafearea art ar ar ag fafaara ara aét ar) afe ag fafaater aqora at ara faq ay fae sare at aeafer A ae| afe ag fafeara eraaet ar tat aa dt area fas at arafa ad <2| dat cal HA fra W qeare vel el & fe ga are F cara ® az cara ar) QB cara at aaa afaary & at wet g ate a fratfedt a a ate afeaaa fear 8 1 cara at faararagat um aea 3 a fie moor| ara aaah ae rat arate fe fare earareiterFag fread fra sare fara fe sara fag 3 fart fat Fah sx ara dlfaa feet seea & tact wr art wee eqra $8 qee fear atz ara dt faatfedraTa % eyrfaay BY ag cara B raga fagaa wx feata at azaa: ate a fafaat afse & ea areursit & fer ate mare 8| face10. Ra cH FH aH ag afera He & fe eet fara cararefiait 3, fara? ea st fafreaa feat g, sana asa araraa & afatea az 1963 & qaaxfram der 444 Hag afufaatfea fear or fe aura fag aver ara few avwat Saal araiet ast wz1 afe 3 soaa fag at acafa al &, aa 3 feataaaFt gar Fae ae Gat gfe X atta ara at arafe ¥ 1 3 axTAT F aek aa TE AHI | GaHT HE as aE caret dar A arfec 1 :11, Sar wget aaarat wary, ata vm ate care21 vast BemQt auat seer s1 waaa fag F va cara & Seay Bt gt sary ery F far havait 1) sax fad er ahr at orfta wr gare aat fear ar) cafe 7 _ ara aferdita we foray ateare-fadea Hearst at AS var ara sfamata BVTR sfaafers aah fanart var 81 gare ae Hae ora fas earferalt wt eare F T aTosat afg wx & sate & fry eae carat a aa TH TA strata wey Fat|afsaré at aa an fx carafate aret are 8B ara orca Hea B ofafvs a fear_Tar at att sa ae fa fear war art Fare SIT Tea fea safaa anlar;_ aeaal & fant wt care farda a at gary aay Haat arar & fH eared ag4ara sfeadta aat vat at eat:7|F 42, gard ra H asa rata at ag area fe aaaa fag are fazmu aia at mite Hea H fre carat aera A, aaa1 gah fart et afeaca‘Ragaa & fe aaa fag are feat var ara oa fafearea aa a ait aa ferme waz cara H fafga at ay ate gafag cara sa Tae aT araa Ita Blt aTetarate ar enartdi ag arate arer 4 (3) (i) F wgare aT F Bz mea FIge: attaredl arar fae ag sfaare Br RATT Fl| 13, gfemraeaed er 1971 a fafas ate wert 084 Ge TET gee cararaa ara fac me sat ar aued HAE IT BAR CalA IT THAsqraraafading facag ovat & gat areas we fratfedl F at aaa Fi ofardl sa ata FH ge ay ae sr HATE FAT || |eet 2114. 1971 am 1968 a fafaa a fafae ate oats dear Feat 1084 1885 F gat ¥ de ot fafaeaq far we TATTT fearg FY saatsara H WET FL TH ATA HY GST ATTTATT BY TART. AAA HBL TTATAO® faq arg Far atare wea Ta J I aAeGae ag ata aaa aa AF sla FBIW ATA FT ardfae at aa arg alee vet fear star 21_Oo:aie Ha eta Heffae "The question for our consideration, however, is G whether the gift, as accepted by the trustee, had fhe effecct of augmenting the assessee trust for taxation pur-poses, or whether the effect of it was that it remained a separate trust in the hands of the trustees of the assessee trust, with liberty to them to apply the incor e of the subsequent trust for the benefit of the assessee trust. Mr. Banerjee urged that it was not necessary expressly H to empower the trust as of a public trust to ~ccept gifts, donations or endowments. That, he subnutted, was a power inherently vested in ihem. We have our doubts. A Trust is a confidence reposed in a person or persons,, with respect to property of which he had or they have legal possession or over '1hich he or they can exercise power, to the intent that he or they may hold the pro-perty or exercise the power for the benefit of some other person or object. Now, this confidence may not neces-sarily include in itself the liberty that the trustees would B go on accepting donations and try to augment the trust to such dimensions that the purpose for which the origi-nal trust was created may be swamped or modified or qualified. If a settlor wants' to invest the trustees with such a power, it is but reasonable to expect that the power should be conferred by the deed which created c trust. The trust that we have to consider does not appear lo confer upon the trustees the further power to accept donations gifts or endowments. We, therefore, do not think that the trustees have the liberty or· the right to accept further gifts, in the absence of specific authorisation, augment the original trust and then claim the benefit of section 4(3) (i) of the Indian Income-D tax Act." It is somewhat difficult to follow the reasoning adpoted by the learned judges of the High Court. Either the gift made by Ajalb Singh and accepted by the Trustees was a valid gift or it wa>. not a valid gift. If it was a valid gift, the shares gifted be-cam~ the property of the Trust. If it was not a valid gift, the shaMs still continued to be the property of Ajaib Singh. It is no body's case that there was a Trust within '1 Trust. No such Tn11>t is put forward either by the Department or pleaded by the assl)lsee. The existence of a Trust is a fact and not a fiction. We fail to see how the learned judges were able to come to the con-clusion that Ajaib Singh while gifting the shares created one more Trust without any writing and without any objective and appoint-ed the Trustees of the assessee Trust to be the Trustees of the new Trust as well. These assumption have no basis either in fact or in law. At this stage we may mention that the very learned judges who decided this Reference had held in Wealth Tax Reference No. 444 of 1963 on the file of the High Court of Calcutta that the shares gifted by Ajaib Singh did not continue to be his property. If they are not Ajaib Sing's property, whose property are !hey? The only answer is that they are the property of the appellant Trust. Those shares cannot float in the mid air. They must be owned by someone .. As seen earlier, the appellant is a public Trust. Its objects are charitable objects Ajaib Singh made over the shares to that A Trust for effectuating the very objects of the Trust. He did not stipulate any other object to be attained. The Trustees had accepted the gift. The Trust Deed does not prohibit the Trustees from accepting a new gift. We fail to see what difficulty was there for the Trustees to accept gifts from third parties for the pur-pose of furthering the objectives of the Trust, so long as the Trust B Deed did not prohibit them from receiving such gifts and so long as the gift made did not in any manner impinge on the obejcts intended to be achieved by the Trust. We fail to see why the Trustees could not accept that gift. In our opinion the assumption of the High Court that the Trustees were incompetent to receive the gift made by Ajaib Singh c is an erroneous one. On the other hand we a