GURTU, J. - The following question has been referred to us under section 66 (1) of the Indian Income-Act, 1922, by the Appellate Tribunal :
'Whether on a true construction of the trust deed dated March 15, 1919, the income of the assessee was exempt from the income-tax under section 4 (3) (i) of the Indian Income-tax Act ?'
The facts stated by the Appellate Tribunal are as follows : Sheo Narain Misra, Son of Pandit Sheo Dhar Misra, and Ganesh Shanker Vidhyarthi, son of B. Jai Narain, started a press named Pratap Press and a paper named Pratap. By a deed dated March 15, 1919, the aforesaid persons created a trust in respect of the Pratap Press and the weekly paper Pratap. A copy of the deed, annexure 'B', is a part of the statement of the case as also the Pratap policy as set out in the first issue of the Pratap, annexure 'C'. Under the trust deed the trustees nominated are, apart from the two founders of the press and the paper named aforesaid, Sri Maithali Saran Gupta in respect of whom this court may take cognizance that he is a celebrated poet, Sri Jawaharlal Rohtagi and Sri Phool Chand. They are to be life members whose duty is to continue the publication of the paper. Clause (2) of the trust deed is important and runs as follows :
(2) That the Trust Committee cannot change the policy of Pratap, which at its inception was published in the first issued of Pratap and which in political matters is according to the aims and objects of the Indian National Congress.'
Clause (3) runs as follows :
(3) That if in any circumstances the Committee finds it impossible to continue the paper according to the above policy then by a unanimous decision of the members of the Committee the paper may be handed over to a person who runs it on the same policy which has been followed so far and the Trust Committee may use the Press or its property for things of the same kind as is being done at present.'
Turning to annexure 'C', it is stated that the ultimate aim of the Pratap is the good of all mankind and that a very important and indispensable way to achieve that aim is the progress of India by the development of agriculture, trade, knowledge, art, prosperity, self-respect, power, good conduct and character. Other requirements of organised, popular and comprehensive education of right policies of good and efficient administration conducive to the welfare of the people, prevention of social evils and persecutions, encouragement of propagation of self-dependence and strong faith in self-rule.
Ancient culture and literature, philosophy, science and religion of our forefathers are to be glorified. Social weaknesses, evil customs and vices are to be exposed. Truth and justice are to be the guide. The paper is to keep itself away from communal or personal quarrels and it is not to maintain, support, protect or oppose any particular association, organisation, person or creed. It is to work for the service of society and of the country and to make the inhabitants conscious of their rights and duties. Conflicts between ruler and ruled, one community and another and one organisation and another are to be discouraged. Its purpose is not to be to replace the British sovereignty and good Government but to remove obstacles in the achievement by Indians of the highest honour and post, and to acquire equal status for Indians in other parts of the Empire. Grievances are to be conveyed to Government fearlessly and without fear of consequence. The paper, the policy states, will be with the public and the Government in just causes but with neither is unjust causes. Aggrandizement of the weak by the strong and tyrannies, misconduct, injustice, cowardice and disunion are to be discouraged. The community is to be encouraged not to be browbeaten and not to be content with its lost and to regard itself as being destined to always linger behind. All Communities should have equal rights and opportunities. Shibboleths which impede the progress of the masses and the growth and development of human society and religion are not to be accepted. Religion is not to be divorced from correct practice and the code of conduct is to be such that principles which bring about mental, moral, social or political degradation are to be rejected. Catholicity is to be considered as essential of religion through which an era of welfare and prosperity is to be ushered. Human society is to be considered as not divided into east and west, nor white and black, nor Christian and Jew, nor Hindu or Muslim, nor poor and rich, nor learned and ignorant. The class of people who would deserve honour are those who are magnanimous, learned men of principles who have clung firmly and confidently to truth and are clearing the dark and difficult path of posterity by their constant search for truth. The quest for truth is to be encouraged and untruth is to be discouraged. The type of men who are guided by self-interest and the baser qualities are not to be honoured. The belief of the policy statement is that those who stand for truth will win against those who stand for the opposite. The path to be treated is away from slavery, weakness and little knowledge and difficulties are to be faced with moral force.
Such are the objects of the trust as appear from the deed of trust and the policy article of the Pratap.
The Tribunal by its order dated April 29, 1952, held as follows :
'The objects of the establishing this trust is mainly to support the policy of the Congress movement. In the first place this is a vague and ambiguous object and in the second place it does not comply with the provisions of section 4 (3) (i) in so far as it is neither religious nor charitable within the meaning of this section. We, therefore, hold that this trust is not exempt from taxation.'
On behalf of the assessee it was urged that this was a trust to maintain the said press and newspaper in an efficient condition and to keep up the liberal policy of the said newspaper as set out in the policy article and that the charitable purpose of the deed of trust was the advancement of a general public utility and the income and exempt within the meaning of section 4, sub-section (3), of the Income-tax Act.
On behalf of the Department it was contended that the object of the trust was the furtherance of the political policy of the Congress and as such it could not be said the charitable purpose was the advancement of an object of general public utility. Mr. Gopal Behari also contended that in construing the deed of trust, annexure 'C', which sets out the policy of the Pratap as published in the first issue of the Pratap could not be taken into consideration and the purposes of the trust had to be gathered from clause (2) thereof alone. He also contended that the purposes as set out in the policy article were so vague that they could not be enforced by a court and that of that reason this trust could not be upheld as a charitable trust.
Many cases of the English courts were cited before us. We will refer to them. Before we do so, however, we would like to point out that their Lordships of the Privy Council have no more than one occasion pointed out that the Indian Income-tax Act is in many particulars different from the English and that in construing the Indian Income-tax Act the authoritys under the English Income Tax Act or English cases relating to charities should not used as binding authorities, but a best as affording some guidance.
The earliest case that was cited before us was the case of Trustees of the Sir G. B. Hunter (1922) 'C' Trust v. Commissioner of Inland Revenue. That was a case where the trust deed provided that the net income of the trust should be paid or applied to the benefit of the Simplified Spelling Society. The object of the society was to recommend and to further the general use of simpler spellings of English words than those currently in use and to engage in propaganda to influence public opinion in favour of its object and to gain from them the approval of public education authorities. It was claimed on behalf of the assessee that the purposes for which the society was established were charitable either as being educational or as being beneficial to the community. But it was held that the trust was not established for a charitable purpose. It was observed that the object of the society were merely to make spelling more simple. But the purpose was nowhere near either of the expressed categories mentioned by Lord Macnaghten in the well know judgment of Commissioners for Special Purposes of the Income Tax v. John Frederick Pemsel, or within the classes of cases which stand enumerated in the statute of Elizabeth.
Anglo-Swedish Society v. Commissioners of Inland Revenue was a case where an Anglo-Swedish Travel Association was constituted with the object of promoting a closer and more sympathetic understanding between the English and Swedish peoples primarily by affording opportunities for Swedish journalists to visit the United Kingdom and to study the British modes of thought and British national institutions. Rowlatt, J., held that he could not bring himself to think that a charitable trust within the analogy of the Statute of Elizabeth had been created. He said that it was not doubt a trust of public utility but that not every trust for matters of public utility was a charity. In other words, that it would not be a true definition of the words charitable trust to say that it was trust for public utility. He said that the trust in question was really a trust to promote an attitude of mind, the view of one nation by another and that was all that there really was in it. He said that a trust a influence general opinion in favour of some theory or view or aspiration was not within the analogy of the Statute of Elizabeth and he pointed out that the particular trust did not seem to materialise at all in any proximate way. Rowlatt, J., then pointed out that it was easier to say that a certain case did not come within the doctrine of the Statute of Elizabeth than to define the limits of the doctrine affirmatively.
In Bonar Law memorial Trust v. Commissioners of Inland Revenue a trust was created which was interpreted by Finaly, J., to have created in effect an educational centre for the Conservative Party where persons believing in the Conservative principles would be trained in as intelligent appreciation of those principles and where political candidates would learn, where agents would learn and where those who were disposed to work in the interest of the Conservative Party could go in order that they could learn what were the principles of the party to which they adhered. That being the construction of the trust was not made for charitable purposes. It was pointed out that the very trustees appointed were important office bearers of the Conservative Party, and reference was made to the evidence tendered to show that lectures were given on Conservative Party organisation but not on social or liberal organisation principles and that the building in question was used almost exclusively for the purposes of the Conservative Party.
In Trustees for the Roll of Voluntary Wokers v. Commissioners of Inland Revenue the appellants had been appointed trustees of an unincorporated body formed to enrol voluntary workers with the object of carrying on essential public services in the event of strikes and lockouts. Funds were gathered and held by the appellants under the trust deed to be paid to the executive committee of the association of other organisation into which it might merge. The appellants were the sole judges as to whether the association remained in existence for the furtherance of its primary object and whether any amalgamated or seceding body sufficiently maintained the essential elements of this object. The association never made any payments to workers and except of for as to defray expenses of printing. postage, etc., the funds were conserved for the next emergency. It was held that the purposes for which the association existed were political and not charitable, and that the appellants had therefore no title to exemption from income tax in respect of this income. Once again the decision was upon a consideration as to whether the trust in question came within the general category of charities analogous to those set out in the English statute of Elizabeth or at least to the general spirit and intention of it. It was considered that political action could not be deemed to be charitable.
Turning now to the Indian cases cited on behalf of the Department, we may refer to the case of Subhas Chandra Bose v. Gordhandas Patel which was a case where the testator had disposed of the residue of his estate thus :
'The balance of my assets after the disposal of the above mentioned gifts is to be handed over to B, to be spent by the said B or by his nominees according to his instructions for the political uplift of India and preferably for publicity work on behalf of Indias Cause in other countries.'
The contention, that by the words 'political uplift of India' a general charitable intention was disclosed, was rejected and it was said that it was clearly not a specific charitable object. It was held by Beaumont, C. J., that there was no charitable intention expressed except that the money was to be used for the political uplift of India and that this was too vague to be enforced.
Runchordas v. Parvatibai was a case where a bequest by a Hindu testator of movable and immovable properties was made to Dharma and was held void. Their Lordships of the Privy Council said that it was not necessary to refer particularly to cases in the Indian courts where it had been held that a devise or bequest for Dharma was void for vagueness and uncertainty. They remarked that according to Wilsons Dictionary, Dharma was defined to be law, virtue, legal or moral duty, and they held that the words were too vague and uncertain for the administration of them to be under any control.
In Lokamanya Tilak Jubilee National Trust Fund, In re, the objects of the trust were for purposes which might, in the opinion of the committee, be national or of national importance. There were other objects which were clearly political and accordingly the court held that as the selection of the purpose of national importance was left to the uncontrolled opinion of the managing committee and as many purposes of national importance might not be charitable, yet the income could be applied to them therefore the trust was invalid according to various decisions cited and also according to the Tribune case which was referred to.
On behalf of the assessee certain other cases were cited. One was Attorney-General v. Heelis, reported in N. Simons and J. Stuarts Reports, Volume 2, at page 67. There it was held that it is not material that the particular public or general purpose is not expressed in the Statute of Elizabeth and that all other legal, public or general purposes were within the equity of the statute. It was pointed out that gift to maintain a preaching minister, a gift to build a sessions house for a county, a gift for the purpose of rebuilding St. Pauls Church, had all been held to be charitable uses within the equity of the Statute of Elizabeth, and gift in consequence for paving, lighting, cleansing or improving a town was upheld as being within the equity or the Statute of Elizabeth.
We were also referred to Inland Revenue Commissioners v. Yorkshire Agricultural Society. In that case Lord Hanworth construed the object of the society as being the improvement of agriculture as a whole and not for any confined purpose of benefiting only the members of the society or those resident in the locality to which its name attached and for the purpose which may bring advancement and improvement to the community, and he came to the conclusion that on the facts found by the Commissioners the society was for a charitable purpose.
Reference was also made to the case of In re Moss, in which case it was held that since the taking care of old and sick animals was calculated to develop the finer side of human nature, therefore the trust for the welfare of cats and kittens needing care and attention was upheld.
The case of Allen v. Wedgwood 4 is another case of a trust for the protection and benefit of animals which was also upheld.
In In re Hood : Public Trustee v. Hood it was directed that special trustees should hold residuary estate upon terms which were expressed as follows :
'Whereas I believe in the universality of the Christian religion and that the remedy for all the unrest and disorders of the body politic will be found in the application of Christian principles to all human relationships. And whereas I believe the drink traffic to be one of the most subtle and effective forces in preventing the successful application of these principles and I therefore hope and trust that active steps will be taken to minimise and ultimately extinguish this enemy of my countrys welfare.'
It was held that the main objects of the gift, namely, the advancement of the application of Christian principles to all human relationships, being charitable, the gift was none the less valid even though the testator had pointed out one of the means by which, in his opinion, the main object could best be attained and which in itself might not have been charitable if it had stood alone.
No doubt all these English cases are valuable in the sense that they direct the mind to the problem. But each of these cases was dependent upon its own facts and the English decisions were given in the background of the Statute of Elizabeth and of such cases as Commissioners for Special Purposes of Income Tax v. Pemsel and In re Macduff.
There is, however, a case of the Privy Council which, it would appear, is a case which proximities closely to the instant case and it is therefore necessary to examine that case closely in order to find whether it would cover the instant case. The case we allude to is In re Trustees of the Tribune. There a person, who owned a press and a newspaper, created a trust by his will by which his property in the stock and good-will of the press and newspaper was made to vest permanently in committee of certain members. It was the duty of the said committee of trustees under the will to maintain the said press and newspaper in an efficient conditions and to keep up the liberal policy of the said newspaper, devoting the surplus income of the said press and newspaper and placing it on a footing of permanency. It was also provided by an arrangement made subsequently that in case the paper ceased to function or for any other reason the surplus of the income could not be applied to the object mentioned above, the same should be applied for the maintenance of a college which had been established out of the funds of another trust created by the same testator. There was a surplus income in the hands of the trustees after defraying the expenses of the press and the newspaper and on a reference by the Commissioner of Income-tax as to whether this income was liable to be assessed in the hands of the trustees, it was held by a majority of a Bench of the Lahore High Court that the income in question was not income derived from property held under trust for charitable purposes and was not exempt under section 4 (3) (i) of the Indian Income-tax Act and was assessable to income-tax.
On appeal to their Lordships of the Privy Council it was held, reversing the judgment of the High Court, that the object of the settler was to supply the province with an organ of educated public opinion and this was prima facie and object of general public utility, that though a trust for conducting a newspaper as mere vehicle for the promotion of a particular political or fiscal opinion may not be within the exemption, where the object is to disseminate news and ventilate onion on matters of public interest, the fact that the paper may have, or may acquire, a particular political complexion would not take away its exemption;
that the admissibility of a claim to exemption from income-tax must be determined by the language of the special provision made by the Indian Income-tax Act in that behalf (and not with reference to English statutes);.....
that under the Indian Act the test of general public utility is applicable not only to trusts in the English sense but is to be applied to property held under trust 'or other legal obligation', a phrase which would include Moslem Wakes and Hindu Endowments;
that in determining whether an object is of general public utility in countries to which English ideas may be inapplicable the standard of the customary law and common opinion amongst the community to which the parties interested belong must be applied;
and that if a trust is not to be carried on for the private profit of the settler or any other person it cannot be treated as an element necessarily present in any purpose of general public that it should provide something for nothing, or for less than its costs, or for less than its ordinary price.
In order to determine what the settler meant by the words 'liberal policy' their Lordships of the Privy Council directed that a further or supplementary statement of the case should be sent up, and this was done. In the supplementary statement of the case, which is printed at page 426b of the report, reference is made to an article entitled 'Ourselves', which was a statement of the policy of the paper before the drawing up of the deed in question. The policy set out in 'Our-selves' has been summarised as follows :
'The policy laid down in this article is to ventilate the views of the educated Indian of Upper India on all questions of national importance, to create and educate public opinion, to speak plainly against and boldly assail class interests whenever they happen to clash with the welfare of the masses, to unite the various nationalities and races of Indian in the work of national regeneration, to bridge the gulf between the European section of the community and their native fellow subjects, to maintain staunch and unswerving loyalty towards the rulers of the country, but at the same time to criticise temperately and respectfully the measures and actions of the authorities which call for such criticism, to put the most charitable construction compatible with sense and to use the mildest language in criticising public men or institutions or private individuals, to maintain a strictly neutral position in religious matters and to advocate the gradual improvement of social system.'
Then at page 426e it is stated in the supplementary statement of the case as follows :
'It will appear that the policy of the Tribune as evidenced by the first issue, and subsequent issues during the lifetime of Sardar Dayal Singh can also be found within the four corners of the objects as laid down and resolutions passed in the first meeting of the Indian National Congress in 1885. Before I leave this aspect of the case, I should point out that the policy of the Indian National Congress of the 19th century and the early part of 20th century was very much different from the creed which it has since adopted. Even in 1908 the objects of the Indian National Congress were as follows :
`The objects of the Indian National Congress are the attainment by the people of India of a system of Government similar to that enjoyed by the self-governing members of the British Empire and a participation by them in the rights and responsibilities of the Empire on equal terms with those members. These objects are to be achieved by constitutional means by bringing about a steady reform of the existing system of administration and by promoting national unity, fostering public spirit and developing and organising the intellectual, moral, economic and industrial resources of the country.'
Their Lordships used the material contained in the supplementary statement of the case in order to arrive at a true construction of the trust since the testator had expressed his intention by reference to a newspaper, which had been published in his lifetime and to a policy the character and purpose of which had necessarily to be collected from its previous issues. After doing this their Lordships examined the case cited before them, particularly the cases where furtherance of political objects had been held to invalidate charitable trusts. In particular they referred to the case of In re Tetley, where the gift was for 'patriotic' and charitable objects, and Russell, J., had said as follows :
'It seems to me that it is impossible to hold that. What is or is not patriotic is in many cases mere matter of opinion. Subsidising a newspaper for the promotion of particular political or fiscal opinions would be a patriotic purpose in the eyes of those who considered that the triumph of those opinions would be beneficial to the community. It would not be an application of funds for a charitable purpose.'
They then referred to In re Scowcroft, where the devise of a building known as the Conservative Club and Village Reading Room in a certain parish to be maintained 'for the furtherance of Conservative principles and religious and mental improvement, etc.' were held to be gifts for religious and mental improvement and they noticed that Stirling, J., had said as follows :
'It is therefore a gift in one form or another for religious and mental improvement, no doubt in combination with the advancement of Conservative principles; but that limitation, it appears to me, is not sufficient to prevent it from being a perfectly good charitable gift, as undoubtedly it would be if it were gift for the furtherance of religious the mental improvement alone.'
They also referred to the case of Bonar Law memorial Trust v. Commissioners of Inland Revenue.
Thereafter their Lordships remarked as follows :
'These English decisions are in point in so far only as they illustrate the manner in which political objects, in the wide sense which includes projects for legislation in the interests of particular causes, affect the question whether the court can regard a trust as being one of general public utility. In the original letter of reference if was not suggested by the Commissioner that the newspaper was intended by its founder to be a mere vehicle of political propaganda, and in the case of Sardar Dayal Singh it seems unreasonable to doubt that his objects was to benefit the people of Upper India by providing them with an English newspaper - the dissemination of news and the ventilation of opinion upon all matters or public interest. While not perhaps impossible, it is difficult for a newspaper to avoid having or acquiring a particular political complexion unless indeed it avoids all reference to the activities of Governments of legislatures or treats of them in an eclectic or inconsistent manner. The circumstances of Upper India in the last decade of the nineteenth century would doubtless make any paper published for Indian readers sympathetic to various movements for social and political reform. But their Lordships having before them material which shows the character of the newspaper as it was in fact conducted in the testators lifetime, have arrived at the conclusion that question of politics and legislation were discussed only as many other matters were in this paper discussed and that it is not made out that a political purpose was the dominant purpose of the trust.
They think that the object of the paper may fairly be described as the object of supplying the Province with an organ of educated public opinion and that it should prima facie be held to be an object of general public utility. Having regard to the particular circumstances of the time, directions of the testator and the evidence as to the contents of the paper before 1898 their Lordships think that the present case in nearer on its facts to In re Scowcroft than it is to the case of the Bonar Law Memorial Trust or to the case put by Russell, J., in In re Tetley, of a newspaper subsidised for the promotion of particular political or fiscal opinions. They do not think that in these circumstance the case can be regarded as outside the ambit of the exemption clause of the Indian Act.'
The question arises whether it could be said that the object of the Pratap as set out in the Prataps policy article is the object of supplying the public with an organ of educated public opinion or not. From passage quoted by us hereinbefore from the supplementary statement of case in the Tribune case, which passages were taken into consideration by their Lordships of the Privy Council in the Tribune case, it would appear that the policy as set out by the Pratap in its first issue it would appear that the policy as set out by the Pratap in its first issue is hardly distinguishable from the policy set out in the article of the Pratap entitled 'Ourselves' and from the further statements made in the supplementary statement of the case that the policy of the Tribune as evidenced by the first issue and subsequent issues during the lifetime of Sardar Dayal Singh could also be found within the four corners of the objects as laid down and resolutions passed by the Indian National Congress of 1885, it would appear that the policies of the two paper is almost identical. The statement in the supplementary statement of the case that the policy of the Tribune was the same as that of the Congress was important because must stress had been laid by Mr. Gopal Behari on that part of clause (2) of the deed of trust which states that in political matters the policy of the Pratap is according to the aims and object of the Indian National Congress. It will appear that though the policy of the Tribune was to be found within the four corners of the objects as laid down and resolutions passed by the Indian National Congress in 1885, their Lordships did not take that the purpose was to supply the Province with an organ of educated public opinion.
It seems to me upon a fair interpretation of clause (2) of the deed in the instant case read with annexure 'C', namely, Prataps policy, that the charitable object of the trust in the instant case also was that of supplying to the Province an organ of educated public opinion. Moreover clause (2) does not state that the policy in particle matters of the Pratap will be the policy from time to time of the Indian National Congress. What the policy would be was determined by the policy article once and for all and the policy therein is described as being in accord with the then policies and objects of the Indian National Congress. Clause (2) does not imply that the Pratap would become the propaganda machinery of the Indian National Congress and would further the views from time of time of the Indian National Congerss. It seems that the second part of clause (2) is merely descriptive, so far as political matters are concerned, of the policy article. On examining the policy article carefully, it is quite clear that the Pratap was not brought in to existence to maintain, support, protect of oppose any particular association organisation, person or creed and that would include the Congress organisation. A paper which aims at carrying out such a policy as was to be the policy of the Pratap and aims at the good of all mankind and the good of India and the putting down of evils in general and the encouragements of catholicity and of all those aspects of life which an educated person would like to see encouraged must clearly intend to be an organ of educated public opinion. No doubt at places such sentiments as a strong faith in self-rule or faith in the intentions of the British Government and the desire to raise the status of Indians everywhere are mentioned. But it does not appear that the paper has a political battle cry or object, or was founded in gramms. But the aim was to encourage all that would lead to the progress of India as a part of the progress of mankind.
Therefore, we are of the view that his case is not distinguishable from the case, In re Trustees of the Tribune, and the answer must be accordance with this opinion.
Mr. Gopal Beharis contention that the deed of trust ought to be construed without reference to the policy article does not appeal to us. It is contrary to what has done in the Tribune case and in case of Bonar Law Memorial Trust, where evidence was tendered to show how the trust was functioning and it was booked into. The policy article of the Pratap is expressly mentioned in clause (2) and there is no reason why it should not be deemed to have become a part of the deed of trust.
We are unable to agree with the contention of Mr. Gopal Behari that this trust could not enforced by the court. The Trustees could always be removed and fresh trustees could be appointed and it would always be possible for the trustees to control the editorial policy and to see that it was in accord with the policy laid down in the first issue. After all proprietors control editorial policy by controlling editorial. In this case the policy is so clearly laid down that the trustees can effectively policy the policy because they have clear guidance in regard to what the policy is to be. We might add that, in our view, even when clause (3) is given effect to the policy of the founder will have to be continued to be carried out and so the purpose of providing an organ of educated public opinion, which is the real purpose behind this deed of trust, would not fail.
Accordingly in our view the question formulated must be answered in the affirmative.
The assessee will have his costs which we assess at Rs. 300. Fee of the learned counsel for the Department if fixed at the same amount.
Mr. Gopal Behari for the Department and counsel for the assessee have given must assistance in this case.