BRIJLAL GUPTA J. - This is a reference under section 66(1) of the Income-tax Act. The questions referred to this court for its opinion are :
'1. Whether on the facts and circumstances of the case a charge was created over the property dedicated by Jwala Sahoy to Bhagwan Sri Radha Krishna so as to entitle the assessee to claim deduction of the annuities from its income of property so dedicated ?
2. Whether on a proper and correct interpretation of the will of Jwala Sahoy these properties were dedicated in favour of one idol, Sri Bhagwan Radha Krishna, or to two separate idols, Sri Radha and Sri Krishna ?'
The facts giving rise to the reference are : that one Jwala Sahoy was the owner of considerable properties, zamindari and house property and also immovable property. On January 3, 1928, he executed a will in respect of his entire property. Some of these properties were dedicated to the deity, Sri Bhagwan Radha Krishna Ji Maharaj. By that will he also made provision for annual payments from the income of the property to some of his heirs. It appears that the properties which were dedicated to Sri Bhagwan Radha Krishna Ji Maharaj were non-zamindari properties. So far as the zamindari properties were concerned they were dedicated to various other deities mentioned in the will. It was provided in the will that the payment of annual amounts to the heirs shall be out of the income of the immovable properties bequeathed to the various deities. It was further provided as follows :
'It must be clearly understood that only the income is responsible for these payments (payments of the amounts to the heirs) as well as other payments but no property will ever be liable to sale at any time.'
One Jai Narain was named in the will as being charged with the duty to manage the entire estate and he was also appointed the executor under the will. In the case of his failure to carry out the directions contained in the will the wife of the testator, Smt. Jasoda Rani, was named as the executor under the will. It was also provided in the will that the testator shall draw up bye-laws and rules for the management of the whole estate and for the appointment of a manager and other office-bearers and for fixing the amount of money for various religious and other functions and for other purposes and it was then stated that if he omitted to make the bye-laws and rules his wife, Smt. Jasoda Rani, would do so in consultation with several persons named in the will. Power was also reserved to any committee that might be appointed to lay down instructions and directions considered necessary for the proper management of everything connected with the administration of the estate.
It appears that subsequently disputes arose between the heirs of the testator which gave rise to a civil suit in the court of the civil judge at Lucknow. In this suit the deity, Bhagwan Radha Krishna Ji Maharaj, was not a party. This suit was disposed of according to a compromise. Paragraph 14 of the compromise is to this effect :
'That the proprietary right of all the immovable property in suit will be considered vested in the deities mentioned in the will subject to the charge of the allowances mentioned in the will. The proprietary rights as claimed in the suit by the parties are to be considered relinquished in favour of the various deities mentioned in the will.'
During the assessment year 1944-45 the 'allowances' payable to the beneficiaries out of the income of the dedicated property were claimed as deductions under section 4(3)(i) of the Income-tax Act and exempt from the charge of tax. Alternatively the claim was made that the allowances paid to the beneficiaries should not be assessed along with the dedicated property and should be allowed as deduction in the computation of income. It may be stated that the assessment was sought to be made against Bhagwan Radha Krishna Ji Maharaj in the status of an individual. The claim made on behalf of the assessee on the two grounds mentioned above was overruled by all the authorities below. The view taken by them was that for the applicability of section 4(3)(i) of the Income-tax Act it was necessary, (1) that the property from which the income arose was held under trust or other legal obligation, (2) that the trust should be wholly for religious and charitable purposes and (3) that the income in respect of which the claim was made should be applied or accumulated for application to such religious or charitable purposes and in the case of property which was held in trust or other legal obligation. It was a simple bequest of all the property of the testator in favour of number of deities including the assessee. It has not been argued before us that the view taken by the authorities below on this point is in any way erroneous.
The second ground of claim to exemption was under section 9(1)(iv) of the Income-tax Act. This provision of the Act provides for allowance being made where income of property is under computation for annual charges not being capital charges to which the property is subject. It is urged that the provision for payment of annuities to heirs was in the nature of a charge on the property and as such the amount of the annuities was allowable under this provisions. The authorities below overruled this ground also by pointing to the provision in the will which has already been quoted above that the payment on account of the annuities was to be made out of the income of the properties and for the payment of these annuities the property was not liable to be sold at any time. It is clear from this provision of the will that the testator never intended to create a charge in respect of the annuities over the properties of which he was making a bequest. If his intention was to create a charge, then the provision prohibiting sale in any case would be wholly inconsistent with that intention. It follows that there is no provision in the will from which it can be inferred that the testator created a charge in respect of the annuities over the properties of which he was making a bequest. Failing on the point on the language of the will it was sought to be argued that such a charge was created by reasons of clause by reason of clause 14 of the compromise decree passed in the civil suit. There it is specifically mentioned that the properties vested in the various deities are subject to the charge in respect of the annuities. As to this, however, it is sufficient to say that the deity was no party to the suit in which this decree was passed and can in no way be bound by the provision in that decree. Further the charge, if any, had to arise under the will and not under any other document or any transaction subsequent to the will. It follows that in this case there was no such charge in respect of any annuity as could be allowed as a deduction under section 9(1)(iv). In view of this the first question which has been referred to this court must be answered in the negative and against the assessee.
So far as the second question is concerned, namely, whether the dedication in favour of Sri Bhagwan Radha Krishna Ji Maharaj was in favour of one idol or in favour of the two idols, namely, Sri Radha and Sri Krishna, learned counsel for the assessee did not find it possible to support the argument advanced on the point by its counsel before the Tribunal. On the merits also it is quite clear that the dedication was made in favourof one idol alone and not in favour of the two idols. The prefix and suffix, namely, 'Bhagwan' and 'Maharaj', will be wholly inconsistent if they were used with reference to Radha, a female deity, and not a male deity. There is also a recital in the will that the testator was bequeathing all his immoveable property in various districts and elsewhere in favour of the deity 'Bhagwan Radha Krishna present at the aforesaid temple as sole and absolute owner of it after my demise'. This clearly negatives the argument that the bequest was not in favour of the sole deity, Bhagwan Radha Krishna Ji Maharaj, but in favour of the two deities, Sri Radha and Sri Krishna. This conslusion is further reinforced by a complete omission of the specification of the separate shares of Sri Radha and Sri Krishna in the will. If the dedication were in favour of the two idols one should have expected that the property dedicated to them would be separately specified or their separate shares would be clearly expressed. It follows that the second question should also be answered against the assessee, namely, that the dedication under the will was in favour of only one idol, Sri Bhagwan Radha Krishna. The reference should be returned to the Income-tax Appellate Tribunal, Allahabad, with the above answers.
The department should be entitled to its usual costs assessed at Rs. 200.
Questions answered in the negative.