H.R. Khanna, C.J.
(1) The following question has been referred to this court under Section 66(1) of the Indian Income-tax Act, 1922 at the instance of the Revenue :
'WHETHER on the facts and in circumstances of the case a valid Trust had been created which would be entitled to exemption under section 4(3)(i) of the Indian Income-lax Act, 1922?'
(2) The assessed is Pramod Jain Trust, Delhi and the matter relates to the assessment years 1956-57, 1957-58, 1958-59, 1959-60 and 1960-61, the relevant accounting years for which ended on 31-3-1956, 31-3-1957, 31-3-1958,31-3-1959 and 31-3-1960. The assessed filed applications claiming refund of Rs.2,470.56, Rs.3,339.28, Rs.4,418.31, Rs.9,297.47 and Rs.3231.00 in respect of the above-mentioned years. According to the assessed, the dividend income in respect of which he claimed refund was exempt under the provisions of Section 4(3) of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act), as the assessed was a validly created trust. The case of the assessed was that Ramkrishna Dalmia created a Trust in the sum of Rs.5,00,000.00 on 31-3-1952. Following letter was addressed by Rarnkrishna Dalmia to Chunnilaiji : New Delhi 31-3-52.
My dear Chunilal Ji, In deference to the request of your daughter Smt. Promod Jain, I have decided to make a gift of Rs.5,00,000.00 for charitable objects at her instance like establishment of medical or educational institutions or such similar philanthropic objects. I am arranging to credit this sum with Bharat Union Agencies Ltd., in the name of Promod Jain Trust of which you will be the sole trustee for the time being with powers to you to co-opt up to two more trustees. However, it may be clearly understood that the payment of the corpus together with accumulated interest thereon at the rate of 6% per annum would be made by said Bharat Union Agencies Ltd. only at the convenience of the said company and you are not entitled to enforce payment of either the corpus or interest. I am also making it clear that any payment by Bharat Union Agencies., would be appropriated first towards the corpus account and only after the corpus of Rs.5,00,000.00 is paid by Bharat Union Agencies Ltd., at its convenience, the said company would pay the accumulated interest thereafter. You will be fully authorised to invest any moneys that .you receive from Bharat Union Agencies Ltd. from time to time in any investments, shares of joint stock companies or the like (whether trustee securities or not) till the same are required to be defrayed for charitable objects as aforesaid. sd/- Yours sincerely, R. Dalmia '
(3) Pursuant to the above letter four amounts aggregating to Rs.60,000.00 were paid by the Bharat Union Agencies Ltd. to the assessed in the following manner :
Rs. 34,000.00 .. on 20-9-1953 11,000.00 ... on 16-1-1954 5,000.00 ... on 10-2-1954 10,000.00 ... on 22-6-1954
(4) Out of the above amount of Rs. 60,000.00, Rs. 34.000/ were invested by the assessed in the shares of Bharat Nidhi Ltd., Rs. ll,000.00 and Rs. 5,000.00 were invested in the shares of Bharat Collieries Ltd., and the balance of Rs. 10.000.00 was invested in the shares of Punjab National Bank Ltd., in the assessed's name. The assessed got dividends in respect of the said shares and made claim for refund on account of the dividends.
(5) The Income-tax Officer held that as Rarnkrishna Dalmia had complete control over the assessed and the income of Bharat Union Agencies Ltd., the provisions of Section 16(1 )(c) of the Act applied. It was further held that the objects for which the Trust was created were vague in view of the words 'such similar philanthropic objects' in the letter in question. It was accordingly held that no valid Trust had been created and the question of making a refund did not arise.
(6) On appeal the Appellate Assistant Commissioner held that till such time as the money was voluntarily given by Bharat Union Agencies Ltd. there was no scope for the trust to enforce payment as the Appellate Assistant Commissioner did not find anything in the letter dated 31-3-1952 of Dalmia to indicate that the Trust should come into force on the date when the money started coming in from Bharat Union Agencies Ltd., the Assistant Commissioner held that there was no validly created Trust. The order of the Income-tax Officer was accordingly up held.
(7) The assessed, then went up in appeal to the Income-tax Appellate Tribunal. The Tribunal observed that there was no need to consider the question as to whether any Trust came into being in regard to the sum of Rs. 5 lakhs on 31-3-1952. The Tribunal directed its attention on the point as to whether 'dividend income' in respect of Rs. 60,0OO.00 was exempt under the provisions of Section 4(3)(i) of the Act. It then found that a sum of Rs. 60,000.00 came to be paid to the Trust by Bharat Union Agencies Ltd. in pursuance of the letter dated 31-3-1952 of Ramakrishna Dalmia. The above payment in pursuance of the letter, in the opinion of the Tribunal, established the formation of
Trust in regard to the sum of Rs. 60,000.00. Since the Trust was for charitable objects like establishment of medical aid, religious institutions or 'such similar philanthropic objects', the Tribunal held that the objects were clear not vague. The contention that the use of words 'such similar philanthropic objects' introduced an element of vagueness was rejected. The assessed was accordingly held to be entitled to the refund of the tax deemed to have been deducted at source in regard to the dividend income which arose out of the investment of the sum of Rs. 60,000.00 by the Trust.
(8) We have heard Mr. Sharma on behalf of the Revenue and Mr. Desai on behalf of the assessed and are of the opinion that the question referred to this court should be answered in the affirmative in favor of the assessed. The first contention which has been advanced by
(9) Mr. Sharma is that no valid trust in regard to the sum of Rs. 60,000.00 was created. It is urged that the letter dated 31-3-1952 of Ramk krishna Dalmia only indicated a decision to make a gift of Rs. 5 lakhs for charitable objects but it could not have the effect of creating a trust. Moreover, according to Mr. Sharma, the Trust which was sought to be created was in respect of a sum of Rs. 5 lakhs and not of Rs. 60,000.00 and as such there could not come into existence a Trust with a corpus of only Rs. 60,000.00. In this respect we are of the opinion that no formal document or other writing is necessary to create a charitable or religious trust. Such a trust may be created by words as show an intention to create a charitable or religious trust. If that intention is accompanied with or followed by a formal divesting of the ownership of the property on the part of the donor and vesting the same in any other person or even in the donor himself as trustee, the dedication is complete. In the present case Ramkrishna Dalmia in letter dated 31-3-52 clearly indicated an intention to create a Trust for 'charitable objects' like 'establishment of medical or educational institutions or such similar Philanthropic purposes'. In pursuance of the intention, as made manifest by that letter, a sum of Rs. 60,000.00 was paid and the same was invested in the name of the assessed in various companies. It can, thereforee, be said that an intention to create charitable trust was made manifest and there was a formal divesting of the ownership of the amount of Rs. 60,000.00. The fact that only Rs. 60,000.00 out of the amount of Rs. 5 lakhs mentioned in the letter were passed on the assessed would not in any way affect the creation of a valid trus. The trust, might as well be in respect of a smaller amount, even though the donor had earlier intended to make gift for the purposes of the trust of a larger amount.
(10) The other contention of Mr. Sharma is that as one of the objects of the trust was 'such similar philanthropic objects' the trust cannot be considered to be wholly for religious or charitable purposes. In this respect, we find that Ramkrishna Dalmia clearly stated that he had decided to make a gift of the money for charitable objects like 'establishment of medical or educational institutions or such similar philanthropic objects'. In view of the definition of the words 'charitable purposes' as given in the concluding lines of sub-section (3) of Section 4 of the Act, Mr. Sharma has not disputed the proposition that the 'establishment of medical or educational institutions' are charitable purposes. He, however, submits that the words in the letter 'such similar philanthropic objects' introduce an element of vagueness and as such the objects of the trust cannot be held to be charitable. In this respect we are of the view that the dominant intention of Ramkrishna Dalmia in creating the trust is indicated by the words 'charitable objects' and the 'establishment of medical or educational institutions.' Words 'such similar philanthropic objects' take colour from the words preceding them and should be construed as ejusdem. generis with the preceding words. It is significant that 'philanthropic objects' mentioned in the letter have been qualified by the words 'such similar'. It would, thereforee, follow that property of the trust cannot be used for an object which is not similar to that of 'establishment of medical or educational institutions.'
(11) Mr. Sharma has referred to the meaning of the word 'philanthropic' as given in Stroud's Judicial Dictionary. It is stated therein that 'philanthropic' is a word of narrower meaning than 'benevolent'. An act may be benevolent if it indicates goodwill to a particular individual only; whereas, an act cannot be said to be philanthropic unless it indicates goodwill to mankind at large. It has been further stated in the said dictionary that the word 'philanthropic' is wide enough to comprise purposes not technically charitable. In our opinion, the Revenue cannot derive, much assistance from the above meaning of the word 'philanthropic'. The words 'philanthropic objects' in Dalmia's letter have to be read not in isolation but in the context of preceding words and as qualified by the words 'such similar' which indicate that philanthropic objects mentioned in the letter must be similar to the 'establishment of medical or educational institutions.' We, thereforee. are of the view that the objects of the trust cannot be held to suffer from the infirmity of vagueness.
(12) As a result of the above, we answer the question in the affirmative in favor of the assessed. The parties, in the circumstances of the case are left to bear their own costs.