K.C. Agrawal, J.
1. This is a reference under Section 256(1) of the I.T. Act, 1961, made at the instance of the CIT, U.P., Kanpur. The question referred for our opinion is as follows :
'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the income from Gurudwara and attached shops was entitled to exemption under Section 4(3)(i)/4(3)(ii) of the Indian Income-tax Act, 1922, for the assessment years 1957-58, 1958-59 and 1961-62, and under Sections 11 and 12 of the Income-tax Act, 1961, for the assessment years 1964-65, 1965-66 and 1966-67 ?'
2. In response to a notice issued by the ITO under Section 22(2) of the Indian I.T. Act, 1922, Sant Baba Mohan Singh, the assessee, stated before the ITO that he had renounced the world at the age of 14 years and was a sanyasi. He was looking after the management of the Gurudwara Kirtan Ghar, Gomti No. 5, Kanpur, as shebait or manager and that the income made by the said Gurudwara was not his personal income. It was also alleged that the offerings and donations received from the public by the Gurudwara were utilized for religious and charitable purposes and, therefore, the income received from the voluntary contributions and from the property owned by the Gurudwara were exempt under Section 4(3)(i) and (ii) of the Indian I.T. Act, 1922. The ITO held that the gurudwara was owned and possessed by the respondent and that the assessee had been receiving contributions in his individual capacity. He also came to the conclusion that the assessee retained absolutecontrol over the management and affairs of the Gurudwara and, therefore, he was not entitled to exemption of the income. On these findings, the ITO assessed the said income as the personal income of the assessee. Aggrieved by the orders of the ITO passed in respect of the assessment years 1957-58, 1958-59, 1961-62, 1964-65, 1965-66 and 1966-67, the assessee preferred appeals to the AAC of Income-tax who took the view that the income in question was not that of the assessee but of the Gurudwara which was solely and exclusively engaged in religious and charitable activities. The finding given by him further was that the properties in question from its inception belonged to the Gurudwara on account of which the same was liable to exemption under Section 4(3)(i) or 4(3)(ii) of the Act. On these findings, the appeals filed by the assessee were allowed and the assessment orders made against him were set aside. The CIT, thereafter, preferred second appeals before the Tribunal. The appeals were dismissed and the findings given by the AAC of Income-tax were endorsed. Thereupon, the CIT filed an application for referring the question indicated above for the opinion of this court.
3. The main question that arises for decision in this reference is whether the Tribunal was justified on the facts and in the circumstances of the present case in holding that the income from the Gurudwara and the attached shops was entitled to exemption under Sections 4(3)(i) and 4(3)(ii) of the Indian I.T. Act. Under Section 4(3)(i) of the Indian I.T. Act, income derived from property held under trust wholly for charitable or religious purposes to the extent to which such income is applied to such trust are liable to be exempted. In the instant case, the finding given by the AAC of Income-tax was that the assessee was the manager of the Gurudwara and that all monies received at the Gurudwara were used to be spent towards religious, educational and charitable purposes. The income received from the shops by way of rent was also used to be utilised for the said purpose. In this view of the matter, the inference is irresistible that the entire property is Gurudwara property and the same was being held by the assessee as a manager or shebait under a legal obligation wholly for religious and charitable purposes. As the entire income has to be applied for religious and charitable purposes the same was liable to be exempted under Sections 4(3)(i) and 4(3)(ii) of the Act.
4. The submission of the learned counsel appearing for the revenue was that in the absence of a formal deed or any other writing it was not possible to hold that the present was a case of charitable and religious trust. The submission made has no substance. A charitable trust may be created by words sufficient to show the intention. So long as there is a clear manifestation of intention to create a charitable or religious trust and there is a formal vesting of the ownership of the property the dedication is complete. In All India Spinners' Association v. CIT  12 ITR 482, thePrivy Council held that no formal deed or any other writing is necessary to constitute a religious and charitable trust, still less to constitute a 'legal obligation', which would suffice for the purpose of the I.T. Act.
5. Consequently, the question referred to us is answered in the affirmative, in favour of the assessee and against the department. The assessee would be entitled to costs, which we assess at Rs. 200.