1. The short question which arises for decision in this reference is whether clause 9(2) (c) of a document of trust settled by a scheme sanctioned by this court results in the trust not being 'wholly for religious or charitable purposes' within the meaning of the sub-section (3) (i) of the section 4 of the Indian Income-tax Act thereby depriving the trust of the exemption granted under that sub-section.
2. Two separate trusts were created by two ladies, who were sisters, Hirbai Rahim Aloo Paroo and Kesarbai Dharamsey Khakoo, on the 11the February, 1888, and 12th April, 1892, respectively, by their wills. Since both of them created trust for the same purposes and objects, the trustees had applied for permeation to amalgamate the two trusts and administer them as a single trust in Suit No. 1205 of 1944 in this court, and by an order pass o the 15th November, 1944, the trust were allowed to be amalgamated and a scheme framed. The scheme framed was entitled 'consolidated scheme for the management of Bai Hirbai Rahim Aloo Paroo and Kesarbai Dharamsey Khakoo Charitable and Religious Trusts' That is the document which we are called upon to consture. After the amalgamations of consolidation of the two trusts they were throughout assessed a trust till the year 1953 and had obtained the necessary certificate of exemption under section 4(3), but it was only after 1953, that the tax authorities bean to hold that these were not trusts 'wholly for religious or charitable purposes' as required by section 4(3) (i) and, therefore, the assessee were required to make returns. All the authorities who have dealt with the question, namely, the Income-tax Officer, the Appellate Assistant Commissioner, 'Q' Range, Bombay, and the Tribunal have held that the scheme settled did not create a trust which was wholly for religious or charitable purposes and as such its income was not entitled to exemption under the Income-tax Act. We are concerned in the present reference with a common order of assessment for the assessment years 1953-54 to 1958-59 both inclusive, corresponding to the 'previous years' Samvat years 2008 to 2013 both inclusive.
3. It is not in dispute that the settlors and the present assessee are Khojas and that, so far as the other provisions of the trusts as disclosed by the consolidated scheme are concerned, they are all wholly for religious for charitable purpose, but the reason why the Tribunal and the income-tax authorities have held that it did not so partake of the nature of the a trust wholly for religious or charitable purposes, was that there was a clause 9 in the consolidated scheme of management. But for clause 9, admittedly, the trust would be wholly for religious or charitable purposes.
4. Clause 9 provides as follows :
'The said trustees shall received the rents, income, interest, dividends and produce of the movable and immovable properties for the time being subject t the said charitable and religious trust and out of the balance of the said rents, income and produce (after deducting the amounts as provided in clause 8A hereof) shall (1) pay all rates, taxes, payments for fire insurance and other outgoings and costs, charges and expenses of and incidental to the management of the trust property including the salary or wages of mehtas or clerks to be employed by the said trustees and shall out of the residue, (2) (a) celebrate the 30th day of Imam Hussein Saheb every year in the Khoja Shia Jamat and on that occasion give such feast etc., as they may consider proper at an outlay not exceeding Rs. 2,500 (b) hold annually a great 'majlis' or a meeting of the whole Jamat of Kesarbai widow of Dharamsey Khakoo, at her father-in-law's house at Kutch Bhuj on the 21st day of Ramjan on each Hira year in remembrance of the anniversary of 'Mowalla Alli Saheb' in the name of her husband Dharamsey Khakoo and give and annual feast to the said Jamat at Kutch Bhuj on the third day of Subahan in each Hijra year in remembrance of the birthday of 'Imam Husein Sahheb' in the name of her husband the said Dharamsey Khakoo at an outlay not exceeding Rs. 500 (c) hold an annual majlis or a meeting of the whole of the relations and acquaintances of Kesarbai widow of Dharamsey Khakoo and feast them in Bombay in remembrance of the anniversary of Imam Husein Saheb n the name of her said husband Dharamsey Khakoo and incur and pay such expenses in connection therewith as the trustees may think proper, and (3) out of the balance spend a sum not exceeding Rs. 12,000 per annum in the Sadavret Charities mentioned in the said Will of Hirbai and in the said deed of trust dated 28th March, 1889 in the way more specifically provided kin clues 12 and 12A hereof, (4) after deducting the actual expenses incurred for the purposes mentioned in sub-clause 1,2, and 3 if there be any balance of income the same shall be applied to or for the benefit of the poor khojas of all the Jamats in Bombay in the manner more specifically provided in clause 13 hereof.'
5. We have quoted this clause in extenso because the sub-clause thereof which has given rise to the dispute has to be read in the context principally of the whole clause and also in the contact of the other provisions of the scheme of management of the trusts. Sub-clause (c) of clause 9 when analysed provides for the following things :
(a) the holding of an annual majlis or a meeting;
(b) the majlis should consist of the whole of the relations and acquaintances of Kesarbai;
(c) that there should be a feast given to them in Bombay;
(d) that the feast should be in remembrance of the anniversary of Imam Hussein Saheb;
(e) that the feast should be in the name of Kesarbai's husband, Dharamsey Khakoo.
6. Though the authorities have considered clause 9 as whole, it was specifically the case on behalf of the department that this sub-clause of clause 9 providing as above was merely a clause for the maintenance of Kersabai's own friends and relations and in view of that clause, the income derived from the property cannot possibly be said to be wholly for religious or charitable purpose. On the part of the assessee is was contended that the holding of the annual majlis of the whole of the relations and acquaintances of Kesarbai and basting them in Bombay in remembrance of the anniversary of Imam Hussein Saheb was mainly a religious purpose and that the primary and dominant object of the scheme was to make it a religious and charitable trust. It was argued before the Tribunal that the manner in which the remembrance of the anniversary of Imam Hussein Saheb can possibly be observed is by the offering of prayers and particularly by reciting the Fateha without which the remembrance of such an occasion could never possibly be celebrated. It may be explained here that the Fateha consists of the opening seven verse of the Holy Quoran and no prayer among the Mohammedans can be complete without reciting this reciting this opening prayer or Sura-i-Fateha. This is made clear in the translation of the Holy Quoran made by S. V. Mir Ahmedali, sponsored by the Husseini Trust of Madras (vide page 4).
7. The Tribunal repelled this contention by holding that the giving of feasts though in remembrance of the anniversary of Imam Hussein Saheb but in the name of the husband of Kesarbai was not religious object even under the personal law of Kesarbai. Though, no doubt, the celebration of the death anniversary of the settlor and/or and members of his family has been recognised as a religious purpose and as constituting a value object of a wakf, it may be held that it was a religious purpose so far as the personal law of Kesarbai was concerned but still it would not necessarily be entitled to exemption under the Income-tax Act. The Tribunal pointed out that the exemption was confided only to public religious trusts and did not extent to private religious trusts. In any case, this was not a trust of a religious nature at all, because nowhere is it mentioned in the will or in the scheme sanctioned by the High Court that any prayers had to be offered much less that the Fateha was to be recited. Moreover, the trustees were given absolute discretion by the impugned clause to spend as much as they liked in their discretion towards the object of clause (c) and therefore there was no limit to the expenditure that could be incurred for that purpose. The reasoning of the Tribunal was as follows :
'We have to see what sub-clause 2(c) of clause 9 denotes, whether it manifests an overriding intention of a religious and charitable nature. The holding of the Fateha ceremony is a religious purpose, but does this mean that the meeting that has to be held under clause 9(2) (c) is of this nature The holding of feasts in remembrance of Imam Hussein Saheb in the name of the husband of Kasarbai is not a religious object even under the personal law of the widow. In section 178 of the Mahomedan Law by Mulla, celebrating the death anniversaries of the settlor and/or the members of his family has been recognised as a religious purpose and as constituting a valid object of a wakf. A purpose may be religious so far s the personal law of the settlor is concerned, but even then it may not necessarily be entitled to exemption under the Income-tax Act. The exemption is confined to public religious trusts and does not extend to private religious trusts, which do not enure for the public benefit. Apart from this, we are satisfied that the purpose as noted in sub-clause 2(c) of clause 9 is not of a religious nature even according to Mahomendan Law. Nowhere it is written in the will or in the scheme sanctioned by the High Court that the meeting of the majlis are to be held for Fateha ceremony. Could with this fact is the discretion given to the trustees for expending any amount of this purpose as they may think proper. There is no limit laid down on the expenditure that can be incurred for that purpose.'
8. Upon this finding the assessee asked that a certain question be referred for our decision, but the Tribunal has referred the following question :
'Where, on the facts and in the circumstances of the case, and in view of clause 9(2) (c) of the scheme of management of the trust, income of the trust was exempt under section 4(3) (i) of the Act for the assessment years 1953-54, 1954-55, 1955-56, 1956-57, and 1958-59 ?'
9. It may be mentioned here for the sake of the completion of the narration of facts that for various reasons the trustees have not been able to spend any money under clause 9(2) (c) for consumption of certain foodstuffs and feasting on any large scale was prohibited, but in the course of 15 years, that is to say, from S. Y. 2001 to S. Y. 2015, the total expenditure amounted to Rs. 11,332 only, whereas the other expenses meant for admittedly charitable object amounted to not less than Rs. 12,000 per year. These facts are found s taxed in paragraph 5 of the order of the Appellate Assistant Commissioner dated 29th September, 1960, and the earlier order dated 22nd April, 1960.
10. The exemption granted by sub-section (3) of section 4 of the Indian Income-tax Act is the following words (we only reproduce the relevant words) :
'(3) Any income, profits or gains failing within the following classes shall not be included in the total income of the person receiving them :
(i)..... any income derived from property held under trust or other legal obligation wholly for religious or charitable purposes....
In this sub-section 'charitable purpose' includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility, but nothing contained in clause (i).... shall operate to exempt from the provisions of this Act that part of the income from property held under a trust or other legal obligation for private religious purposes which does not enure for the benefit of the public.'
11. Now the contention of behalf of the assessee has been that the property of this trust was held under trust wholly for religious purposes. We are, therefore, not concerned with 'charitable purpose' or the first part of the definition of the ' charitable purpose' quoted above. It is also contended on behalf of the assessee that the income from the trust properties held under this trust were not 'for private religious purpose which does not enure for the benefit of the public. ' This is precisely the point on which the Tribunal held that the trust was not entitled to the exemption which it claimed.
12. Now, as we have said, the scheme of management of this trust was originally settled as we have said by an order of this court in Suit No. 1205 of 1944 passed on the 15th November, 1944. That order itself was passed under the powers of this court under the Religious Endowments Act. The provisions of the trusts as incorporated in the consolidated scheme for management describe the trusts as 'charitable and religious trusts' and the trust by which we are concerned is called by the name of the 'Bai Hirbai Rahim Aloo Paroo and Kesarbai Dharamsey Khakoo Charitable and Religious Trusts. ' A perusal of the main provisions contained in clause 9 read along with other clauses would also show that the provisions were purely and wholly to provide for charitable and religious trusts. In sub-clause (1) of clause 9 there is provisions for payment of rates and taxes on the property of the trusts, which is a normal provisions in any trust and then sub-clause (2) (a) provides for the celebration of the 30th day of Imam Hussein Saheb every year in the Khoja Shia Jamat and on that occasion to give such a feast, etc., as the trustees may consider proper at an outlay not exceeding Rs. 2,500. This has been held to be for a public religious purpose and there is no doubt that it is so. Sub-clause (2) (b) provides for the holding annually of a great 'majlis' or a meeting of the whole Jamat of Kesarbai at her father-in-law's house at Kutch-Bhuj on the 21st day of Ramjan in each Hijra year in remembrance of the anniversary of 'Mowalla Alli Saheb' in the name of her husband Dharamsey hakoo and for giving of an annual feast to the said Jamat at Kutch-Bhuj on the third day of Subahan in each Hijra year in remembrance of the birthday of 'Imam Hussein Saheb' in the name of her husband the said Dharamsey Khakoo at an outlay not exceeding Rs. 500. Then follows the sub-clause 9(2) (c) which has given rise to the dispute in this reference (we shall deal with it separately). In sub-clause (3) provision is made for the expenditure of the residuary income of the trust and it is provided that out of the balance there shall be spent a sum not exceedings Rs. 12,000 per annum in the Sadavret Charities as mentioned in the will and the deed of trust of Hirbai dated 28th March, 1889. In clause 9(4) is a further residuary clause which says that after the actual expenses are incurred for the purpose mentioned in sub-clause (1), (2) and (3) 'if there be any balance of income the same shall be applied to or for the benefit of the poor Khojas of all the Jamats in Bombay in the manner more specifically provided in clause 13 hereof.'
13. A word may be said about the provisions of clause 9 at this stage. It will be noticed that sub-clause (3) and (4) of clause 9 make similar and somewhat overlapping provisions for the expenditure of the residuary income of the trusts. The reason which has been given is that when the scheme of consolidation of the two trusts was sanctioned the provisions in the two documents by which the trusts were created by each of the two sisters, were incorporated into the terms of the scheme of management and since the purposes and object of both the trusts were similar and their main provisions were also similar, but there was some difference in the language because of the different drafting of the two documents all the terms of the both the documents were kept intact, and the same language that the draftsman of each documents used were incorporated in the document embodying the scheme of management. This is an important point to remember because it was urged that there is a contract between sub-clause (2) (b) and (c) of clause 9 in making provisions for the remembrance of the anniversary of Imam Hussein Saheb. We shall advert to this different a little later.
14. In clause 12, to which reference has already been made in sub-clause (3) of clause 9, there is provision for the expenditure of a sum not exceedings Rs. 12,000 per annum out of the residue of the money after the performance of the ceremonies in the remembrance of the anniversary of the Imam Hussein Saheb and that provision is that 6,000 shall be set part of for 'the bread distribution fund' to be spent in accordance with clause 12A and Rs. 6,000 shall be apart as the 'clothes and marriage fund' also to be given in accordance with clause 12A. As regards the distribution of bread, clause 12A provides 'the trustees shall every day buy baked wheaten bread and distribute the same once in the morning and once in the evening amongst the poor (men, women and children) of all the Jamats of the Khojas residing in Bombay who may be desirous of having aid in such quantities as may satisfy their hunger.' As regards the distribution of clothes and marriage expenses, it is provided in clause 12A that 'the amount shall be distributed by the trustees in such proportion as they may consider proper in giving from time to time presents of cloths of such quality and in such quantities as may be considered proper and necessary to the poor persons (such men, women and children) of all the Jamats of Khojas who may be desirous of having aid from the fund and who may be in the opinion of the trustees 'really poor and deserving of aid'. There is a provision also for fatherless poor girls of the said Jamat who may be given dress, ornaments and articles or dowry on the occasion of their marriages. There is a specific provisions that no amount out of these two funds shall be accumulated but must be spent if not for the two purposes stated above, in accordance with clause 13 and clause 13 also provides for the expenditure of the surplus of the yearly income of the charity. There are number of purpose or object mentioned in clause 13, every one of them, we are satisfied, being a wholly religious or charitable purpose. As for example, medical or surgical aid, provision for medicines, nourishment, milk and other food as directed by doctors, monetary assistance to poor Khojas of either sex who from age, ill-health, accident or infirmity are unable to maintain themselves and supply of necessaries including clothes, linen, etc., or other aid in sickness or infirmity and cheap residential accomodation in the trust properties to poor and deserving Khojas; for the promotion and encouragement of education amongst poor Khojas; for help to poor Khojas in industrial pursuits of which numerous and carefully complied instances have been given.
15. A mere perusal of these terms of the two trusts which were consolidated by the scheme of management sanctioned by this court makes it clear beyond doubt, in our opinion, that the dominant intention of the two ladies was to establish a religious and charitable endowment. Throughout the emphasis is upon the sent to which the settlers belonged, and in aiding the needy and poor and in order to aid such people considerable anxiety has been shown in the drafting of the terms of the document. Apart from these, the only other provisions are the provisions in clause 9 where emphasis is laid upon the giving of a feast in remembrance of the anniversary of the Imam Hussein Saheb. It is curious that each of the two sisters made similar provisions and yet there does appeal some deference in the language used in sub-clauses 2(b) and (c). The reason is obvious. The two documents were drafted at a considerable distance of time, one of the 11th February, 1881, and the other on the 12th April, 1892, and the provisions of the two deeds in this respect are to be found incorporated in clauses 9(2) (b) and 9(2) (c) clause 9(2) (b) pertaining to the trust created by Hirbai and clause 9(2) (c) pertaining to the trust created by Kersarbai.
16. Now, turning to clause 9(2) (c) which is the only clause on the basis of which it has been held that the document does not create a trust which is wholly for religious or charitable purposes. The clause no doubt provides for a feast to be given to the whole of the relations and acquaintances of Kesarbai, widow of Dharamsey Khakoo, but if it were the true intention merely to provide for a feast for them, we cannot see how that clause would occur in the context in which it occurs, because the clause beings by saying 'hold an annual majlis or a meeting of the whole of the relation and acquaintance of Kesarbai' and then comes the provisions 'feast them'. What is more, the day on which the feast is to be given, it is clear, is fixed. It is only one day in each year (this is clear from the expression 'annual majlis'). Again, the feast is to be 'in remembrance of the anniversary of Imam Hussein Saheb'. Thus, it must be on a fixed day. Imam Hussein Sahab in held in the greatest reference by the Shias, to which sect the Khojas belong and to which the two sisters belonged. He was done award with on the 19th day of the month of Moharram and, therefore, when the provisions states that the feast is to be in remembrance of the anniversary of Imam Hussein Saheb, it is clear that it should be on the exact day of which the anniversary of the death of the Imam Saheb falls.
17. Mr. Joshi, on behalf of the department, has no doubt contended that all that the clause means is that the anniversary of the death of the Imam has to be remembered, but it does not show on what day it is to be remembered. We cannot possibly accept such contention. The document says in clear words the 'remembrance of the anniversary ' and that can only be a fixed day. We cannot conceive of a clearer language to indicate that it must be on the day on which the anniversary of his death falls.
18. Now, no doubt, in connection with the purpose, namely, the remembrance of the anniversary of the Imam Hussein Saheb, it is also mentioned in the clause 'in the name of her husband Dharamsey Khakoo'. Relying on these words, it was urged by Mr. Joshi, on behalf of the department, that these words which we have just quoted indicate that it was a private object, namely, the commemoration of her husband's name, and that conclusion is also supported by the provisions for feedings the relations and acquaintances of the settlors. We do not think we can construe sub-clause (c) of clause 9(2) in this manner. The dominant intention of that clause is, as we have shown, to hold an annual majlis or a meeting in remembrance of the anniversary of Imam Hussein Sahab, who is the subject of the highest veneration by the Khojas to which sect Kesarbai belonged. The provisions that the celebrations should be associated with the name of the husband does not, in our opinion, take away from the main provision of the sub-clause. We may also emphasise here that the words used are 'majlis' and, as we shall show, a majlis is essentially a religious meeting in the context is which it is used here. No doubt, today the word 'majlis' also implies any educational or cultural propose, but in the context in which it is used, namely, 'remembrance of the anniversary of the Imam Hussein Saheb', it can only mean that it is a religious meeting.
19. We may now usefully refer to some of the cases which were cited at the Bar which would show that among the Khojas the Imam Hussein Saheb is the object of very special veneration. In fact, the history shows that he was one of the founders of that sect. The Khojas today own allegiance to the Aga Khan as their temporal spiritual head and in an early case which arose in this court, where the authority of the Aga Khan was in question, there is to be found a very useful discussion tracing the history of the Khoja community. The case is Advocate-General v. Muthmmad Husen Huseni (otherwise called Aga Khan). In that case Mr. Justice Arnold, in great detail, traced the advancement of Islam and how the division between the two main sects, namely, the Shias and the Sunnis, took place. He has pointed out that the two sons of Fatima were the two Imams, Hassan and Hoosein, and Hoosein. Hessan, the elder, was a saint and recluse and was done away with by the machinations of his wives who poisoned him. Thereafter Hoosein, the younger son of Fatima, became the Imam. He too, however, was done away with along with his entire family by treachery of his enemies at Kerbela in the year 680 A. D. (See page 331). The learned judges thus comments upon that event : 'This tragic event stirred the heart of Islam to its very depths, and even now, after the lapse of nearly 1,200 years, it separates, as from the first it separated, the Mahomedan world into to two great and hostile division of the Sunis and the Shias, - of the Sunnis, who bless the memory and are zealous in the cause of Ayesha and Abubekr and Omar and Osman - and of the Shias, who execrate the memory of the three first Caliphs, and, hardly in a less degree, that of Ayesha herself; who by degrees have been come to regard Ali as something more than mortal - as not only the Vicar, but in some mystic sense an incarnation of God; who venerate Fatima as the first among women; and yearly celebrate the martyrdom of Hoosein, not only with the outward signs but with the inward reality of lamentation and mourning and woe. ' The learned judge summed up the position at page 333 as follows :
'In short, the whole religious life of the Shia is completely steeped in a current of thoughts, beliefs, traditions, and observances which all have their source in Ali and Fatima, and their two sons, Hassan and Hoosein - the four venerated names which with that of the Apostle of God compose the Panchton (or Pentad) of the Ala Saba, or Holy Family of Islam.'
20. Now, this event happened on the 10th day of the month of Moharram and that therefore, is so far as the Shias are concerned, one of the scared days in their religion. No doubt the Imam Hussein is also held in veneration by the Sunnis, but so far as the Shias are concerned he is the subject of their highest veneration and worship.
21. A decision which is found in Ram Churn Law v. Sahibzadi Fatima Begum shows the importance of the two Imams, Hassan and Hoossein, for they are the subject of great religious endowments of the Muslim in both the sets, but the Imam Hassan is the subject of particular veneration by Shias. The decision in Ram Churn Law v. Sahibzadi Fatima Begum, at page 33, established that, where a trust property is dedicated to the service of the Imam Hassan and the deed provided that the rents and profits of the property shall be appropriated 'to the due and proper observance of the annual Mahomedan festival of the Mohurrum', it was held to be for a public and religious purpose and a valid wakf. In that case Mr. Imam observed at page 34, column 2 :
'Apart from the held to the poor and the needy, the commemoration of the historic events of Karbala, keeping alive, as it does, some of the best traditions of Islam, is to my mind as good a purpose as the followers of a faith can have. I see in it the visualization of the grandest examples of courage and endurance and all that is heroic in man, from the pages of Islamic history and I think it would be wrong to exclude it from objects valid for waqf.'
22. The decision of the Patna High Court in Sayid Ismail Ali Khan v. Musammat Hamidi Begum shows that, where the object of an endowment was to make a permanent provision for the celebration of the Moharram and the ceremonies in connection thereto the avowed object of the endowment was to perpetuate certain ceremonies for pious uses such as Fateha, Hajria, etc., and to provide the expenses of the first ten days of the Moharram, the purposes were valid purposes for a wakf and there would be a valid public religious endowment in such a case (see page 235).
23. The important circumstances that weigh with us in construing this clause are these : It is a 'majlis' that is to be held. Secondly, that majlis or meeting which is to be held is to be held annually and on a particular day, namely, the death anniversary of the Imam Hussein Saheb. Normally, in any religion the prophet and his disciples are the subject of veneration and in almost every religion the anniversary of the death of a person particularly one's own ancestors, is also the subject of religious observance or worship. How much more would that be the case where the person to be venerated is the greatest leader of their sect-a person venerated as only next after the Prophet and founder of that sect. In a case relating to the Cutchi Memon community (See Abdulsakur v. Abubkkar). Mr. Justice Mirza pointed out at page 366 that : 'Performance of the annual Fateha of the settlor and of members of his family was recognised as a valid object of wakf' and the manner in which it is done is indicated by him by quoting a passage from the judgment of Mr. Justice Crowe in the earlier decision in Haji Abdul v. Haji Hamid as follows :
'Among the memons fakirs are feasted on the day of the month on which the person whose ceremony is performed died. It is believed it tends to religious benefit of the person in whose behalf it is performed..... The money is spent as the person performing the ceremony thinks proper or sweets or..... The food is distributed indiscriminately to the poor and well-to-do Mahomedans who are present. In most cases these ceremonies are performed at private houses, but if performed at a mosque, the expenditure is on a larger scale and includes a fee for the learned man who performs the recitation and the cost of flowers and illuminations.'
24. This passage would indicate that even though the commemoration may be the death anniversary of a near relation or may be of the Imam himself, feasting does take place and sweets are distributed and the sweets or the food are not necessarily distributed only among the poor. They may be distributed equally among the poor and the well-to-do. The feature, therefore, that there is to be a feast or that the feast is to be at a private house cannot detract from the benefaction, nor would it show that it was for that reason not a public religious endowment.
25. Yet that was one of the main contentions of Mr. Joshi in the present case. He particularly emphasised the two features of sub-clause (c) of clause 9(2), namely, that in the present case a meeting was to be of the whole of the relations and the acquaintances and, secondly, that there was to be a feast given to them. Thirdly, he emphasised that it was to be a feast given in the name of her husband, Dharamsey Khakoo. These circumstances, it was said, indicate that the settlor was merely making a private disposition of her property for the benefit of her relations and acquaintance and in order to commemorate the memory of her late husband. The cases to which we have just referred indicate that even where there is truly a public religious endowment these features are present and we cannot, therefore, hold simply because these features are introduced in sub-clause (c) of clause 9(2) that the main provision of 8that clause, namely, the holding of an annual majlis in remembrance of the anniversary of Imam Hussein Saheb, is in any way diminished or wiped out.
26. We have indicated what is the nature of the celebrations on such an occasion and it is clear that some sort of prayers are always offered. We have also shown that no prayer among the Mohammedans is complete without a recital of the first seven Suras of the Holy Quoran known as the Fateha. It has been held that the reading of the Holy Quoran is not only a religious or pious act, but it would constitute a valid purpose of a public religious endowment. In a case before the Madras High Court in Abdul Sattar Ismail v. Abdul Hamid Sait, considering the question whether one of the objects of the endowment in that case, which was the celebration of the death anniversary of the testator and the members of his family and holding the Fateha ceremony on that occasion, constituted a valid wakf, the Division Bench observed at page 510, column 1 :
'We hold that the observance of the anniversaries of the deaths of the testator and members of his family, involving as it does the feeding of the poor, constitutes a valid object of the wakf. The fourth object is the reading of the Koran in public places and also at private houses.' As regards this object, after considering several authorities and pointing out that the words 'piety' and 'charity' have a much wider significance in Mussalman law and religion than in any other system, the Division Bench further held :
'The reading of the Koran in public and private places can only be regarded as religious and pious and it seems to us that it must also be regarded as charitable, for the reading is for the benefit of all Mussalmans. The fact that money may be expended on the reading of the Koran in private places as well as in public places does not detract from the religious, pious and charitable character of the object. The fifth object is the maintenance of poor relations and dependents. The decision of the Allahabad High Court in Mukarram Ali v. Mt. Anjumanunnissa Bibi is directly in point here. In that case it was held that a wakf created for the reading of Fateha and for charitable purposes including the maintenance of the founder' the Imam Huein Saheb and the holding of an annual majlis on that occasion to celebrate it, there must necessarily be prayers offered and the reading of the Holy Koran and whether the reading is in public or private, it would still be a valid purpose of a public religious endowment.
27. In the view that we take and upon the authorities which we have discussed we hold that sub-clause (c) of clause 9(2) despite the provisions for the holding of a meeting of the relations and acquaintances of Kesarbai and feasting them in the name of her late husband, Dharamsey Khakoo, would still be a valid religious purpose and not a private purpose as was contended. In that view, it is unnecessary to consider the further contention raised by Mr. Peerbhoy on behalf of the assessee that in construing a document of trust like this, it is necessary to see what was the dominant intention of the testator and if in the sequel a small portion of the endowment be in favour of the relations of the settlor or for the benefit of the settlor, the object would be a valid object for the purposes of a public religious endowment. In this respect he referred to the three decisions in Commissioner of Income-tax v. Moosa Haji Ahmed, Commissioner of Income-tax v. Trustees of S. M. M. Charity Trust and Commissioner of Income-tax v. Keshari Singh Nahar. Since we have held that, in our opinion, sub-clause (c) of clause 9(2) creates a trust wholly for religious purposes, we need not go into this point.
28. Mr. Joshi, on behalf of the department, urged that the whole object of this sub-clause was to benefit the relations and acquaintances of Kesarbai and to feed them in memory of her husband. He emphasized that there was no mention whatever of a prayer being offered in any of the sub-clauses nor to a recital of the Fateha or the performance of other ceremonies to which we have referred as being ceremonies proper on the occasion of the observance of the anniversary of the death of a person or of the Imam in this case. No doubt it is not expressly so stated in sub-clause (c) of clause 9(2), but we think we have said enough to show that there cannot be the remembrance of the anniversary of a holy person like the Imam Hussein Saheb without the recital of some prayer and that no prayer among the Mohammedans is complete without the recital of Sura-i-Fateha.
29. We must hold, therefore, that in this case the intention of the testatrix was to provide for the usual ceremonies which take place in celebration of the death anniversary of a person. We cannot suppose having regard to the other provisions in the trust deeds, which are reflected in the scheme of management, that these two ladies who were obviously religiously minded and charitably inclined, when providing for the remembrance of the anniversary of the Imam Hussein Saheb himself, the very founder of their sect, would not think of any religious ceremonies. Therefore, though it is not so expressly stated, it seems to us that it is necessarily implied in this clause that the usual ceremonies should take place and that as we have shown would clearly be a valid purpose of a public charitable trust.
30. In a case which arose before this court Advocate-General of Bombay v. Yusuf Ali, a provision was made for Jamat feast on the 21st of Ramzan and a similar contention was raised that feasting as such could not be a valid object of a public religious endowment. In that case it was also established that occasional feasts used to be given on the birth day of the Mullaji Saheb and in that connection Marten J. observed at page 1100 :
'Taking the specified objects which have been proved in this case, it is clear that the upkeep of the tomb and mosque are both charitable objects. So I think are the Jamat feasts on 21st Ramzan. These are not disputed, nor are the occasional feasts on the Mullaji's birthday....
I regard these ceremonies and feasts as religious celebrations by the whole community in honour of a saint of theirs. They tend I think to the advancement of religion in their community. In my opinion they are quite distinct from Fateha ceremonies in honour of a private individual. But even these have been held to be valid charities when accompanied by the giving of alms.....'
31. The case relied on, therefore, by Mr. Joshi does not indicate that feastings on the occasion of Jamat or on the occasion of Mullaji's birthday would detract from the endowment as a public religious endowment.
32. For the reasons stated, we are unable to accept the finding of the Tribunal and the tax authorities that this was not a trust wholly for religious purposes. We think that in the light of what we have said, some of the findings of the Tribunal are patently incorrect. For instance, the finding given in paragraph 6 conflicts with what we have shown is established upon the authorities. The finding was 'The holding of the Fateha ceremony is a religious purpose, but does this mean that the meeting that has to be held under clause 9(2) (c) is of this nature The holding of feasts in remembrance of Imam Hussain Saheb in the name of the husband of Kesarbai is not a religious object even under the personal law of the widow. The latter remark is clearly opposed to the decisions to which we have referred which show that not only is the holding of feasts in remembrance of the anniversary of the Imam or, for that matter of even the death anniversary of a lesser person an accepted mode of observance of the memory of these persons and the holding of feasts on such occasions does not deprive the endowment of the character of a religious endowment. The other remark which follows the one above was 'a purpose may be religious so far as the personal law of the settlor is concerned, but even then it may not necessarily be entitled to exemption under the Income-tax Act. The exemption is confined to public religious trusts and does not extent to private religious trusts which do not ensure for the public benefit. ' We are unable to accept the distinction which the Tribunal thus drew between a religious purpose so far as the personal law of the settlor is concerned and what is a religious purpose within the meaning of section 4(3) (i). We do not think that when section 4(3) (i) uses the expression 'Wholly for religious' it means anything else than what is a religious purpose within the meaning of the law to which the assessee belonged.
33. In that result, we answer the question referred as follows : That the income of trusts arising from the scheme of management of the trusts was exempt under section 4(3) (i) of the Act for the assessment years 1953-54, 1954-55, 1955-56, 1956-57, 1957-58 and 1958-59. The Commissioner will pay the costs of the assessee.