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Wealth-tax Officer Vs. Buniyad Hussain - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Allahabad
Decided On
Judge
Reported in(1983)6ITD407(All.)
AppellantWealth-tax Officer
RespondentBuniyad Hussain
Excerpt:
1. the question involved in this appeal is whether the land in question is wakf land so that it cannot be included in the net wealth of the assessee for the wealth-tax assessment purposes.2. in quasha zaidpur pargana satrikh tehsil nawabganj, district barabanki (u.p.), there is 601 bighas of agricultural land/grove land.the portion of 121 bighas containing the residential house admittedly belongs to the assessee, shri buniyad hussain. the remaining 480 bighas, in which there is a masjid and imambara, is the land in dispute. the assessment year in question is 1970-71. the assessee claimed before the wto that wakf was made orally in respect of land in dispute long back though the writing was made and registered on 22-5-1970 (should be 20-6-1970). however, the wto did not accept the.....
Judgment:
1. The question involved in this appeal is whether the land in question is wakf land so that it cannot be included in the net wealth of the assessee for the wealth-tax assessment purposes.

2. In Quasha Zaidpur Pargana Satrikh Tehsil Nawabganj, District Barabanki (U.P.), there is 601 bighas of agricultural land/grove land.

The portion of 121 bighas containing the residential house admittedly belongs to the assessee, Shri Buniyad Hussain. The remaining 480 bighas, in which there is a masjid and imambara, is the land in dispute. The assessment year in question is 1970-71. The assessee claimed before the WTO that wakf was made orally in respect of land in dispute long back though the writing was made and registered on 22-5-1970 (should be 20-6-1970). However, the WTO did not accept the assessee's submissions and vide the assessment order, dated 31-3-1972, he added Rs. 7,01,000 as the value of the total area of 601 bighas to his net wealth.

3. The assessee went up in appeal before the AAC and submitted that a wakf by user existed in respect of the disputed land. Reliance was placed on the certificate of registration granted to the wakf by the Shia Central Board of Wakfs, U.P. and the evidence recorded by the officials of the Board in order to verify the assessee's claim. The assessee also produced extracts from a Bombay Journal published in 1916 wherein the reference regarding the wakf was available. The AAC felt that the assessee's claim was not without any basis. But, considering that the evidences produced on behalf of the assessee before him were additional and that the WTO had not given to the assessee an adequate opportunity to establish his claim, he restored the matter to the WTO {vide his order dated 27-1-1978) for framing the assessment afresh after looking into the matter thoroughly and after giving to the assessee an adequate opportunity for the production of evidence.

4. The WTO, however, took the view that the creation of any wakf prior to the registered deed, dated 20-6-1970, was not established and that on the basis of the said deed, the claim for exemption for the assessment year 1970-71 was not tenable. The conclusion of the WTO was based upon the following findings : (i) that the assessee had failed to produce any documentary evidence with regard to the creation of the wakf prior to the assessment year 1970-71 ; (ii) that a registered deed of wakf was necessary under the Transfer of Property Act, 1882 ; (iii) that the Shia Central Board of Wakfs, U.P., had recognised the wakf only with effect from 20-6-1970 when the registered deed of wakf was executed ; (iv) that no information as required under Section 3 of the Mussalman Wakf Act, 1923, was furnished by the assessee ; (v) that no registration of the wakf was obtained under Chapter 4 of the Wakf Act, 1954; (vi) that no registration of the wakf was obtained under the U.P. Muslim Wakfs Act, 1960 ; and (vii) that the assessee did not establish that the income from the disputed land was spent exclusively for religious and charitable purposes.

Accordingly, the WTO maintained the earlier order vide his order dated 23-2-1979.

5. Being aggrieved, the assessee again filed an appeal before the AAC.The assessee explained before the learned AAC that the earlier wakf, being oral, was not registered. It was reiterated that the wakf was registered with the Shia Central Board of Wakfs, U.P. It was said that it was a wakf by user and that its objects had been carried out since long. It was also pointed out that in the subsequent years the land in question had not been included in the assessee's net wealth. The learned AAC held that it was established beyond doubt that a religious and charitable trust by user was founded orally which did not require any registration. It was also held that the disputed land, intended for wakf, was set apart and dedicated to the objects of the wakf.

Accordingly, the inclusion of the disputed land in the net wealth of the assessee was held to be unjustified.

6. The department has come up in appeal before us against the said order. Shri K.K. Rai, the learned departmental representative, strongly relied upon the order of the WTO as also on Sections 186 to 188 of Mulla's Mohammedan Law (18th edition). He submitted that all the papers relied upon on behalf of the assessee being after 31-3-1970, the valuation date relevant for the assessment year in question, they were irrelevant for the assessment year in question. He also submitted that, if at all, it was a case of application of income for charitable and religious purposes so far as the assessment year in question was concerned.

7. On the other hand, Shri V.K. Rastogi, the learned counsel for the assessee, relied upon the order of the learned AAC. He pointed out that the assessee became a mutawalli in 1958. Referring to the definition of wakf under Section 3 of the U.P. Muslim Wakfs Act, 1960, he pointed out that it included wakf by user. He also submitted that in cases of oral wakf a mere declaration was enough. In this connection, reliance was placed by him on the decision of the Supreme Court in Garib Das v.Munshi Abdul Hamid AIR 1970 SC 1035. He also pointed out that the only consequence of non-registration of a wakf under section 29 of the U.P.Muslim Wakfs Act, 1960, was the penalty of fine under Section 54.

8. We have considered the rival submissions as also the decision referred to above. The case of the assessee has been that there was an oral wakf long before the assessment year in question and that there was in existence a wakf by user. His further case is that even though such a wakf has been in existence and has been acted upon, there was no writing to ensure the application thereto in a perpetual manner and so the registered deed dated 20-6-1970 was executed. In this connection, the preliminary statements in that deed as also the statement dated 5-12-1971 of the assessee before the Board are relevant. It is not a new or a fresh deed of wakf as the assessee (who is the executant thereof) has admitted therein that the ownership of the land in question already vested in the God Almighty. A wakf inter vivas is completed by a mere declaration of endowment by the owner. If land has been used from time immemorial for a religious purpose, e.g., for a mosque or a burial ground or for the maintenance of a mosque, then the land is wakf by the user although there be no evidence of an express dedication. In the case of Garib Das (supra), the Supreme Court had held that a wakf inter vivos is completed by a mere declaration of endowment by the owner. It was also held therein that when the founder of the wakf and the mutawalli are the same person, no transfer of physical possession is necessary. Under section 9 of the Transfer of Property Act, 1882, a transfer of property may be made without writing in every case in which a writing is not expressly required by law. It follows, therefore, that the question of registration of an oral wakf or a wakf by user will not arise either under the Transfer of Property Act, 1882, or under the Registration Act, 1908. If, however, the wakf is created under a written instrument, that writing has to be got registered. In view of the above, the WTO was not justified in expecting the oral wakf or wakf by user also to be registered in pursuance of the Transfer of Property Act, 1882 or Registration Act, 1908.

9. Next comes the necessity for the registration of such a wakf under the Mussalman Wakf Act, 1923, the Wakf Act, 1954 and the U.P. Muslim Wakfs Act, 1960. Even under the Wakf Act, 1954, wakf included a wakf by user. That Act had repealed the Mussalman Wakf Act, 1923. As pointed out by the learned counsel for the assessee, the definition of 'wakf under Section 3(11) of the U.P. Muslim Wakfs Act, 1960, includes a wakf by user. Wakfs are required to be registered in U.P. under section 29 of that Act which makes detailed provisions in that regard. Section 54 of the Act provides for the levy of pecuniary penalties by the Board (Sunni or Shia Central Board as the case may be) against the mutawalli for his failure to apply for the registration of the wakf. Section 55 provides for the removal of a mutawalli, inter alia, if he is fined on more than one occasion under section 54. The object of registration under these Acts was to ensure that all the relevant or important records relating to wakfs were being maintained properly. It is the only way through which the Board can come to know about the creation or existence of a wakf within its jurisdiction. However, the fact that a wakf is not registered with the Board would not nullify or negative its existence. Therefore, the non-registration of the wakf under the Mussalman Wakf Act, 1923 or the Wakf Act, 1954, could not nullify or negative the existence of the wakf. The certificate dated 9-12-1971 accorded by the Shia Central Board of Wakfs, U.P., Lucknow, shows that the wakf in question is duly registered under the U.P. Muslim Wakfs Act, 1960, as a Shia, public, religious and charitable wakf. The order dated 3-11-1971 of the Controller of the Board is to the same effect and it further directs that the name of the assessee be recorded as the mutawalli of the wakf.

10. Lastly, the evidence regarding the oral wakf may be examined. The copies of the statements dated 5-12-1971 of the assessee, his cousin Irshad Hussain and of Panna Lal and Mohammad Ali recorded before the Board coupled with the enquiry report dated 6-12-1971 of Shri Gohar Mirza, the auditor of the Board, show that the wakf was declared by Khadim Hussain, the great-grandfather of the assessee, who constituted himself the first nazim and whereafter the assessee's grandfather and after him the assessee's father and then his brother Iqbal Hussain became mutawallis ; that the imambara and masjid were constructed by Khadim Hussian (year 1223 Hijri and his name being on one of the gates of the imambara and the year 1224 Hijri on the masjid) and that the income from the groves was all spent always thereon and the wakf continued to be acted upon. The report dated 9-12-1971 of Shri A.Z.Kazmi, Assistant Secretary, Shia Central Board of Wakfs, U.P., Lucknow, is also to the effect that the wakf in question is an immemorial wakf by user. The original order dated 27-1-1978 of the AAC mentions that the assessee had filed before him extracts from a Bombay Journal published in 1916, wherein reference regarding the wakf in question was available. In view of the foregoing material, we are of the view that the existence of an oral wakf by immemorial user was duly established.

We are in agreement with the order of the learned AAC and accordingly we uphold his order. The 480 bighas land in question being a wakf land, it could not be included as the assessee's wealth for the assessment year in question.


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