# Chandra/cant K rishnarao . P'l'ad,ha,n v. The Colledo'I' of Customs, Bombay

- **Citation:** [1962] 3 S.C.R. 137
- **Court:** Supreme Court of India
- **Decided:** 1962
- **Bench:** P. B. Gajendragadkar, K. SuBBA RAO, M. H!Dayatullah
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/chandra-cant-k-rishnarao-p-l-ad-ha-n-v-the-colledo-i-of-customs-bombay-2315
- **Pages:** 9

## Headnote

Income Tax-Wakf-AssesBment-If must be in tlte status
of individual or as association of persons-llfut(J;waU.i, 1j a
trustee-Indian Income-tax Act, 1922(11of1922), s. 41(1), First
proviso-MuBBalman WakfValidating Act, 1913 (6 of 1913), ss . .3,4.
The question for determination in the appeal was whether
the wakfin question should be assessed to tax under s.41(1) of
the Indian Income-tax Act. 1922, through the manager as
individual or as an association of persons at the maximum rate
under the first proviso to that section on the ground that the
individual shares of the beneficiaries were indeterminate and
unknown. The wakf deed directed the mutawalli to do acts
necessary for charitable purposes and to meet the maintenance
expenses of the wakif's children, grand-children, the female
children born in the future and the male children born to the
said female children and after payment of taxes and meeting of
expenses for repairs and maintenance of properties, to utilise the
l!alance of the income for daily necessary expenses of the house
and for food for purchasing dresses and other necessities for the
male and female members of the tarwad, for conducting specified
~eremonies, for feeding the poor and for meet_ing such. other
necessary expenses and thereafter to utilise lhe balance, if any,
in acquiring properties yielding good income.
1961
Chandra/cant
K rishnarao .
P'l'ad,ha,n
v.
The Colledo'I' of
Customs, Bombay
Suliba Rao J.
1961
AUifUst 14.
CDmmi#icmtr of
Incottt1•tfJ~, Fitralo
and Ooim1>otore
v.
Puthiyu
Ponmott1chi"1r1kau1
H"akf· Manager
P. 1~. Ay1eha 8j n;
Si.bba Rao J,
f
138
SUPREME COURT REPORTS
-[1962]
Held, that under.the terms of the wakf deed the individual
shares of the beneficiaries were indeterminate wi1hin the
meaning of the first proviso to s.41 (I) of 1he Indian 'Income:iax
Act, 19~2, and as such the a>Sessee was liable to pay income-tax
thereunder at the maximum rate.
1 t was not co11ect in vie\\' of ss.3 anrl 4 of the Mussalman
WakfV;;lidating Act, 1913, to say that ui:der rhe wakfdeed
the property vested in the Almighty and the Mutawalli did not
therefore, receive the income on behalf of any person \vithin the
meaningofsAl(I) of the Indian Income-Tax Act and as such
the pro\'iso could not come into operation.
Under the
Mahomedau law wakf property \'Cs!• in the
Almighty only in an ideal sense and the :\futawalli, acting in
his 11an1e1 utilises
the income
for
tl'e
ad van ta~e of the
Lenrficia1irs.
The \\'07(lS '(011 hrhalf of any person" in s.41 or
the Act, therefore, could only mean on behalf of the brneficiarirs
and not on behalf of the Almighty.
Jervun Do.a Sahoo v. Sha/, Ku/,eer-ood-deen, (1841) 2 M.I.
A. '.'90, referred to.
field, further, that there ,,.a,s no .scope for iJnporting the
~fahom~dan Law of wakf in s.41 of the Act since that section in
r_xprcss terins treated the Mutawalli as a 11 ustre though hr is
not one in the technical sense under 1he Mohamedan [aw.
Crvxr. APPELLATE JURISDICTION: Civil Appeal
No. 397 of 1960.
Appeal from the ju1lgmcnt and order dated
November 24, 1958, of the Kerala High Court in
I. T. R. No. 23 of 1957.
K . • \r. Rajagopala Sastri awl P.C. ;l/enon, for the
appellant.
A. V. Vi.s·wanatha Sastri, Narayanaswami and
R. Gopalahishnan, for the respondent.
1961. August 14. The Ju1lgment of the Court
was 1lelivered by
SuBBA RAO, J.-This appeal by certificate
granted by the Hi,gh .Cour~ of Kenda raises ~he
question of the upphca lion oi s. 41 (I) of the Indian
Income-tax Act (hereinafter called .the Act) to the
facts of the c11se.
-
+
\
3 S.C.R.
SUPREME COURT REPORTS
139
One P. B. Umbichi and his wife executed a
cleed dated DeDcmber 20, 1915, creating thereunder
;a wakf of their properties. It was provided therein,
inter. aJ,ia,. that the. income from the properties
mentiOned therein should be utilised for the m1intenance of their two daughters and their children
.on the female side;· For 40 years upto and inclusive
of the assessment year 1954-55, the income-tax
assessments were mad

## Text

..
3·'S.C;R.
SUPREME COURT REPORTS
137
BY
COURT :
In
accordance
with the
opinidn · of th~ majority, the petitions must fail
except to the ext"Jnt that we declare r.10 (c) to be
an unreasonable restraint upon the right of the
petitioners to carry on thei.r avocation, and r. ll,
when it prescribes a renewal fee of Rs. 50, invalid
inasmuch as it has provided not for a fee but for a
tax. Subject to this, the petitions are. dismissed. The
petitioners will pay the costs of the other side (one
set only), as they have lost substantially.
Petitions dismissed except for
sl·ight mod·ifi·
cation.
COMMIS8IONER OF INC0.\1E-TAX, KERALA
AND COIMBATORE
v.
PUTHIYA PONMANICHINTAKAM WAKF
MANAGER P. P. AYESHA BI BI
(P. B. GAJENDRAGADKAR, K. SuBBA RAO and
M. H!DAYATULLAH, JJ.)
Income Tax-Wakf-AssesBment-If must be in tlte status
of individual or as association of persons-llfut(J;waU.i, 1j a
trustee-Indian Income-tax Act, 1922(11of1922), s. 41(1), First
proviso-MuBBalman WakfValidating Act, 1913 (6 of 1913), ss . .3,4.
The question for determination in the appeal was whether
the wakfin question should be assessed to tax under s.41(1) of
the Indian Income-tax Act. 1922, through the manager as
individual or as an association of persons at the maximum rate
under the first proviso to that section on the ground that the
individual shares of the beneficiaries were indeterminate and
unknown. The wakf deed directed the mutawalli to do acts
necessary for charitable purposes and to meet the maintenance
expenses of the wakif's children, grand-children, the female
children born in the future and the male children born to the
said female children and after payment of taxes and meeting of
expenses for repairs and maintenance of properties, to utilise the
l!alance of the income for daily necessary expenses of the house
and for food for purchasing dresses and other necessities for the
male and female members of the tarwad, for conducting specified
~eremonies, for feeding the poor and for meet_ing such. other
necessary expenses and thereafter to utilise lhe balance, if any,
in acquiring properties yielding good income.
1961
Chandra/cant
K rishnarao .
P'l'ad,ha,n
v.
The Colledo'I' of
Customs, Bombay
Suliba Rao J.
1961
AUifUst 14.
CDmmi#icmtr of
Incottt1•tfJ~, Fitralo
and Ooim1>otore
v.
Puthiyu
Ponmott1chi"1r1kau1
H"akf· Manager
P. 1~. Ay1eha 8j n;
Si.bba Rao J,
f
138
SUPREME COURT REPORTS
-[1962]
Held, that under.the terms of the wakf deed the individual
shares of the beneficiaries were indeterminate wi1hin the
meaning of the first proviso to s.41 (I) of 1he Indian 'Income:iax
Act, 19~2, and as such the a>Sessee was liable to pay income-tax
thereunder at the maximum rate.
1 t was not co11ect in vie\\' of ss.3 anrl 4 of the Mussalman
WakfV;;lidating Act, 1913, to say that ui:der rhe wakfdeed
the property vested in the Almighty and the Mutawalli did not
therefore, receive the income on behalf of any person \vithin the
meaningofsAl(I) of the Indian Income-Tax Act and as such
the pro\'iso could not come into operation.
Under the
Mahomedau law wakf property \'Cs!• in the
Almighty only in an ideal sense and the :\futawalli, acting in
his 11an1e1 utilises
the income
for
tl'e
ad van ta~e of the
Lenrficia1irs.
The \\'07(lS '(011 hrhalf of any person" in s.41 or
the Act, therefore, could only mean on behalf of the brneficiarirs
and not on behalf of the Almighty.
Jervun Do.a Sahoo v. Sha/, Ku/,eer-ood-deen, (1841) 2 M.I.
A. '.'90, referred to.
field, further, that there ,,.a,s no .scope for iJnporting the
~fahom~dan Law of wakf in s.41 of the Act since that section in
r_xprcss terins treated the Mutawalli as a 11 ustre though hr is
not one in the technical sense under 1he Mohamedan [aw.
Crvxr. APPELLATE JURISDICTION: Civil Appeal
No. 397 of 1960.
Appeal from the ju1lgmcnt and order dated
November 24, 1958, of the Kerala High Court in
I. T. R. No. 23 of 1957.
K . • \r. Rajagopala Sastri awl P.C. ;l/enon, for the
appellant.
A. V. Vi.s·wanatha Sastri, Narayanaswami and
R. Gopalahishnan, for the respondent.
1961. August 14. The Ju1lgment of the Court
was 1lelivered by
SuBBA RAO, J.-This appeal by certificate
granted by the Hi,gh .Cour~ of Kenda raises ~he
question of the upphca lion oi s. 41 (I) of the Indian
Income-tax Act (hereinafter called .the Act) to the
facts of the c11se.
-
+
\
3 S.C.R.
SUPREME COURT REPORTS
139
One P. B. Umbichi and his wife executed a
cleed dated DeDcmber 20, 1915, creating thereunder
;a wakf of their properties. It was provided therein,
inter. aJ,ia,. that the. income from the properties
mentiOned therein should be utilised for the m1intenance of their two daughters and their children
.on the female side;· For 40 years upto and inclusive
of the assessment year 1954-55, the income-tax
assessments were made on the wakf through itR
manager under s. 41 of the Act in the status of an
individual · But, for the assessment year l!l55-5G,
th!l Income-tax Officer treatecl the assessee as an
association of persons, and1 on the ground that the
.shares of the beneficiaries are indeterminate, levied
tax at the maximum rate under the first proviso to
s. 41 of the Act. On appeal, the Appellate Assistant Commissioner of Income-tax helcl that the
Income-tax Officer was not right in holding that
the members of the family were indeterminate, but
he confirmed the assessment for the reason that,
as the shares were not specified among the individual members of the family and also between the
members of the family on the one hand and the
charitable and religious purposes on the other, the
first proviso to s. 41 would be applicable to the
assessee. On further appeal, the Income-tax Appellate Tribunal took the view that the proprietary
right/! in the property in question vested in the
AJmighty and that the Mutawalli was only to look
after and administer the properties as a manager
and, therefore, the proper person in whose hands
the income from the properties should be assessed
was the Mutawalli in his status as an "individual"
at the rates applicable to an individual. In that.
view, the appeal was allowed. At the instance of
the Commissioner of Income-tax, the Appellate
Tribunal referred to the High Court of Kerala the
following question for its determination :
"Whether in the facts and circum~tances
.
of the case, the first proviso to section 41 j:;
, ,. . , .!!-ppli.cs,kl~,''.
·
, . ,
1961
Commiarion1r of
lncome-tax,.K1rala
and QoiWtbatore
v.
Puthiya
Ponmaniehtntakam
Wakf Manager
P. P, Ay1slia Bi Bj
Subba Rao J,
..
-1961
.....__
C<im'i'K'iiomr of
lnco.,,,,,.tax, Kernln
and CMmbntMt
v.
Put hi ya
J>onntanieltintalca na
IVakJ Manattr
P. P. Ayesh11 Ri fl,
140
SUPREME COURT REPORTS
[1962]
The High Court held that the said proviso was not
applicable, aii under the wakf deed the h<:'ncficiaries
and their shares were ascertainabl<'. Aggrieved by
the said order, the Commissioner of Income-tax
has pref<'rred the present appeal.
Mr. Rajagopala Sastri, leamed counsel for the
Commissioner of Income-tax, contended tlmt on a
fair reading of the terms of the wakf deed it would
be clear that the Mutawalli was only directed to
maintain the members of the family, that none of
the members of tl1c familv had anv ascertainable
share in tho income, and that, therefore, the c'l.Se
,;quarely fell within the first proYiso to s. 41 of the
Act.
:\fr. Viswanatha Sastri, lcarnecl counsel for
the respondent, in addition to his a.ttcmpt to sustain
the co11structio11 put upon thr wakf deed by the
High Court, contended that th<' instant e.1s<> fell
outside the scope of s. 41(1) of the Act, as the
:\fotawalli was only r\'cei\-ing the income on L<'-
half of t.he Almighty, that tho Almighty was not a
"person", and that, therefore, as the main scetion
1lid uot apply, the proviso nlso would not be
attrnctcd. with the result that
the :\Iutnwalli
wonld have to be assessed :rn 11n "individual".
As the argument turns upon the <'OnHtructio11
of"· 41 of the Act, it will he eo1w<'nie11t at the outHet to rt>ad the rnlevant· parts tlH•rpof.
"Section 41 : ( l) Iu the 1·ase of income,
prutlts ur gains chargeable under this Act
which ...... any trustee or trustccH appointed
under a trust declared by a duly executed
instrument in writing whether testamentary
or otherwise, including the trustee or trustees
under any Wakf deed which is valid under
the l\Iussalman Wakf \'alidating Act. l!ll3,
are entitled to receive on behalf of any
person, the tax shall be levied upon and
recoverable from such ...... trustee or trustees,
t
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3~_.o.R.
$UPR-mME d{)URT REPORTS
141
in the like manner and to the same amount
as it would be leviable upon and recoverable
.from the person on whose behalf.such income,
profits or gains are receivable, and all the
· pr~wisi<ins .of this Act shall apply accordingly :
.
Provided that where· any such income,
. profits or gains or any part thereof are net
. _specifioally receivable on behalf of any one
person, or where the individual shares of the
persons on whose behalf they are receivable
are indeterminate or unknown, the tax shall
he levied and recoverable at the maximum
rate, hut, where such
persons have no
other personal inr.om<> chargeable under this
Act and none of them is an artificial juridical·
. person, as if such income, profits or gains or
such part thrreof were the total income of an
association of persons."
This section in terms applies to a trustee under a
wakf deed which is valid under the Mussalma.n
Wakf Validating Act, 1913.
Under the substantive
part of the section, tax is leviable on the trustee of
the wakf in the like manner and to the same amount
as it would be leviable upon and recoverable from
the beneficiary, that is, the assessment would be at
the individual rates of tax applicable to the beneficiary. But, under the first proviso to that section,
there are two exceptio1:s to the !(eneral rule, viz.,
(i) where the income is not specifically receivable
on behalf of any one person; and (ii) where the
individual shares of the persons on whose behalf
the income is receivable are indeterminate or unknown. In those two circumstances, tax shall be
levied ancl recoverable at the maximum rate. It is
agreed that the firnt exception does not apply to
the in8tant <:aHe.
But the question that falls to be
decided is whether the individual shares of the
persons on whose behalf the ineome is receivable
are indetermi1iate or unknown.
The answer to the
question depends upon the construction of the
1981
~ I
Comm16.BiQnrr o
r n_eo~~;. ·s~,yta
rtnd Coi,,W~tor~ ...
' .. ':~(.,· ·, \ :
PutMya
Pon1naniclaintakam
W akf. Mani:tger
P. P . • 4y&llG Bi Bi
Subha R(io .! .
..
1Ml
\
-o-i-...ioMr of
fn~, K#rala
and Ooimbalore
v.
PulJriya
Ponmtmiehinlaka "'
JVal;J Manager
1'. P. Ayeaha Bi Bi
Subba R''" J.
t
i42
l:ibPiiE!llE COURT REPORTl:i
provisions of the Wakf deed. The Wo.kf <leed waR
executed on December 20, l!JoO by Umbichi and his
wife dedicating their entire property, moveable and
immoveable, of total valuo of rupees one lakh for
the objects mentioned therein.
The Mutawalli
appointed thereunder was directed to manage the
properties in such a way as "to do acts necessary
for charitable purposes and to meet the maintenance
expenses of their children and grand-children and
the female children that might be born to them in
future, and to the malo children born to the said
female children". Tho document proceeded to give
further specific directionA iu the management of the
propnrties. After payment of taxes and meeting
the expenses incurred for repairs and maintenance
of the properties, the balance of the income should
he utilised for the "daily necessary expenses of the
house and food expenses as we aro doing now",
and for purchaHing "dresses
and other nccc.ssitics
for the then male and female members of the
tarwad" and for conducting "nerchas (ceremonies)
such as
Yasin,
Moulooth,
etc.,
charitable
ceremonies for feeding tho poor and such other
necessary expenses", and out of the balance, if any,
the Mutawalli was directed lo acquiro properties
yielding good income. The rest of the recitals in
the document are not relevant for the present
purpose.
Can it be said that, under the document, the
individual sharci; of the beneficiarios are specified ?
The document docs not expressly specify the shares
of the beneficiaries; nor does it do so by necessary
implication. Indeed, the individual s~arcs of the
beneficiaries are not germane to the objects of the
document. The
l\fotawalli was directed to bear,
out of the income,
the expen8e8 necessary for
maintaining the members of the tarwad and to
conduct the neccsaary religious ceremonies. The
distribution of the family income and fa,mily
expenses
was left to tho discretion
of the
•. -
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,_
. '
' .
~ S.C.R. sttP.R.EM.E doURT REPORTS
i43
Mutawalli, the document also further contemplated
that the Mutawalli by his prudent and efficient
management w:ould save sufficient amounts for
purchasing properties.
'fhe directions indicate
beyond any reasonable doubt that no specified
share of the income was given to any of the beneficiaries, and their right was nothing more than to
be maintained, having regard to their reasonable
requirements which were left to the discretion of
Mutawalli. While it is true that the number of
beneficiaries would be ascertainable at any given
point of time, it is not possible to hold, ::is the
High Court held,
that under the document the
beneficiaries had equal shares in the income. The
beneficiaries had no specified share in the income,
but only had the right to be maintained. The
construction put upon the document by the High
Court cannot, therefore, be sustained on the plain
wording of the document. We,
therefore,
hold
that under the terms of the document the individual
shares of the beneficiaries are indeterminate within
the meaning of the first proviso to s. 41(1) of the
Act. If so, under the said proviso, the assessee is
liable to pay income-ta:x: at the ma:x:imum rate.
The alternative contention of learned counsel
for the respondent remains to be considered. The
argument is that under the Wakf deed the
properties vesfin the Almighty and, therefore, the
Mutawalli receives the ·income only on behalf of
the Almighty and not on behalf of any person
within the meaning of s. 41(1) of the Act, with the
result thats. 41(1) is not applicable to the assessment in question. The argument is rather subtle,
but it has no force. There are three effective answers
to this contention :
Firstly,
it wa8 not rai8ed before the High
Court-the only question argued before the High
Court was whether the beneficiaries of the trust and
their individual shares of the income of the trust
were. ascertainable.
1961
Co1nmi8a1'one1' of
1 ncome-ta.-.:, K erala
and Coimbatore
v.
l'uthiya
Ponmaniohintaloam
Wakf lllanagM"
P. P. Aye3ha Bt Bi
Subba Rao J
1961
Commi#imur of
'1'CI> mt-ta.\",. ·K rrala
-,,m Cofrnbator11
••
PutA/ya
Po•u1w11ic.Mntaka11t
· WaJtfMllMIJ<'
P. I'. AyOAha 11 i Tii
i44
SU.PRElllE COURT. REPORTS.
_[l~2J
. .
Seeondly, though under the i\Iahomedan Law
the propcrtie>< rkdicated under a Wakf deed belong
to the Almighty, it is only in the ideal sense, for
the Mutawalli i.t1 the name of the Almighty utilises
the income for the purposes and for the benefit. of
the beneficiaries mentioned therein. Under the
Mahomcdan Law, the moment a Wakf is created
all right8 of property pass out of the wakif and vc.st
in the
Almight~'· The property does not vest. in
the :\lutawalli,
for he is merely a manager and
not a trustee in the technical sense.
Though Wakf
property belongs to thl' Almighty, the practical
significance of that concept is explained in Jewun.
Dos.~ Sahon v. Shah K11beer-ood-dr.en (') thus:
" ............... Wakf signifies tho appropriat.ion of a particular article in such a manner
as subjeets it to tho rules of divine property,
whence
the appropriator·s right in it is
Axtinguished, and it be«omell a property of
· God, by the advantage of it resulting to his
creatures."
That is, though iu au ideal sense the property veati;
in the Almighty, the property is held for the bonofit
of His creatures, that is, the beneficiaries. Though
at one time it was considered that to constitute a
valid Wakf there must be dedication of property
solely to
the worship of Goel or for
religions or
charitable purposes, the Wakf Validating Act,
1913, discarded that view and enacted bys. 3 that
a l\Ius8alman can create a wakf for the maintenanco
and support,
wholly or partially, of his family,
children or descendants provided the ultimate benefit
is expressly or impliedly resened for the poor or
for any other purpose recognized by the Mussalman
law as a reli~ious, piouR or charitable purpose of a
permanent character. Sectiou .J. of the said Act,
goes
further and BUJ8 that a
wakf shall not be
invalid by tho mere circumstance that the benefit
(I) (1840) 2 M.J.A; 390, 421.
•
•
-
·-
I
.•
. r
,
' '
as.c.:R.
SUPREME cotJR'i' REPORTS
'145
reserved for the poor or for religious purposes is
postponed until the extinction of the family. It is,
therefore, manifest that under th<'
l\Iahomedan
Law, the property vests only in the Almigiity, but
the Mutawalli,
acting in His name, utilises the
income for the advantage of the beneficiaries.
Therefore, the words "on behalf of any person" in
s. 41 of the Act can only mean on behalf of the
beneficiaries and not on behalf of the Almighty.
The third and more effective answer to the
argument is thats. 41(1) of the Act provides for a
vicarious assessment in order to facilitate the levy
and collection of income-ta:x; from a trustee in
respect of income of the ' beneficiaries. In express
terms it equates t.he Mutawalli of a wakf to a
trustee. For the purpose of s. 41 the l\Iutawalli,is
treated as a trustee and,
on the analogy of a
trustee, he holds the property for the benefit of the
beneficiaries. There is no scope for importing the
Mahomedan Law of Wakf in s. 41 when the section
in express terms treats the Mutawalli as a trustee,
though he is not one in the technical serise under
the Mahomedan Law. If tho argument of learned
counsel for the respondent be accepted, it would
make s. 41 of the Act otiose so far as wakfs are
concerned,
for in every case of wakf the property
would be held for the Almighty and not for any
person. We, therefore, reject this contention and
answer the question in the affirmative.
In the result, we set aside the order of the
High Court and hold that the respondent was
rightly assessed by the Income-tax Officer at the
maximum rate. The appeal is allowed with costs.
Appeal Allowed.
. 19~1
Commi1•ioner al
Income.tax, K~,.qla
and Coimbatore
v.
Puth!1/a
Ponmanieh.tntakam
Wakf Matwi<•
P. P. Ayuha Bi Bi
Subba Rao J .