Alfred Henry Lionel Leach, C.J.
1. The assessee in this case is the muthavalli of a wakf called the Allajanathud-Deeniya, which was created by one Jamal Mohideen Sahib by a deed, dated the 21st December, 1923. The deed directs that half of the annual net income shall be utilised for the expenses of maintenance, education, marriage, funeral and other necessities of such members of the donor's family in the male line as in the opinion of the muthavalli are in poor and needy circumstances. The muthavalli himself is allowed to benefit from this portion of the net annual income if he also happens to be in poor and needy circumstances. The other half of the annual net income is to be utilised for such charitable purposes as (a) helping new converts to Islam by giving them religious instruction, (b) giving help to Muslim orphans, (c) giving secular, especially industrial and technical education to Muslims, (d) helping poor and needy Muslims of the Sunni sect, (e) spreading knowledge of the Islamic religion, (f) giving contributions to public institutions established for the purposes mentioned, and (g) starting and maintaining institutions for the purpose of giving education to Muslim orphans, if considered necessary by the muthavalli. The deed also provides that if the income allotted for the benefit of the needy members of the donor's family remains unspent for three consecutive years the moneys are to be transferred to a reserve fund.
2. For the assessment year 1935-36 the Income-tax Officer found that the assessee was in receipt of an income of Rs. 13,907. This includes half of the net income of the trust properties for the year of account. The reason for his finding was that the direction in the deed that half of the income shall be set aside for the needy descendants of the donor does not constitute a trust for charitable purposes within the meaning of Section 4 (3) of the Income-tax Act, 1922. The Income-tax Officer recognised that the deed did constitute a public charitable trust in so far as it dealt with the other half of the net income. The muthavalli challenged the validity of the assessment and when the matter came in due course before him, the Commissioner of Income-tax referred the following questions to this Court for decision under the provisions of Section 66 (2) of the Income-tax Act:
(1) Whether the provisions made in the wakf deed dated the 21st December, 1923, for the maintenance, education, marriage, funeral and other necessities of the poor and needy among the descendants of the wakf in the male line, constitute a charitable purpose and as such falls within the scope of Section 4, Clause (3) (i) of the Indian Income-tax Act, 1922.
(2) Whether the income allotted under the said wakf deed for the purposes mentioned in question No. (1) which remains unspent for want of beneficiaries is assessable in the hands of the muthavalli.
3. Section 4(3)(i) provides that the income derived from property held under trust or other legal obligation wholly for religious or charitable purposes shall not be liable to income-tax. It is stated that the expression 'charitable purposes' includes 'relief of the poor, education, medical relief, and the advancement of any other object of general public utility; but nothing contained in Clause (i), Clause (i-a) or Clause (ii) shall operate to-exempt from the provisions of the Act that part of the income of a private religious trust which does not enure for the benefit of the public'. The words which constitute the proviso were added by an amendment made in 1939.
4. The expression 'charitable purposes' must be construed strictly. As the result of decisions in England spread over a long period the expression can only be applied to a public charity. There is no such thing as a private charitable trust. There may be a private trust for religious purposes and that is why the amendment was made to Section 4 (3) in 1939. It was made in order to put beyond all doubt the intention of the Legislature not to exempt even private trusts for religious purposes.
5. In Commissioners for Special Purposes of Income-tax v. Pemsel (1891) A.C. 531 a case which was decided by the House of Lords and had reference to the English Income-tax Act of 1842, Lord Macnaghten said:
How far then, it may be asked, does the popular meaning of the word 'charity' correspond with its legal meaning? 'Charity' in its legal sense comprises four principal divisions : trusts for the relief of poverty; trusts for the advancement of education; trusts for the advancement of religion; and trusts for other purposes beneficial to the community, not falling under any of the preceding heads.
6. Later in his judgment he said:
On these grounds I have come to the conclusion that the expression 'trust for charitable purposes' in the Act of 1842, and the other expressions in the Act in which the word 'charitable' occurs, must be construed in their technical meaning according to English law.
7. The Indian Income-tax Act is an enactment expressed in the English language and the words used in it must be given the same meaning as is given in the construction of similar statutes in England. Giving the words their accepted meaning the exemption only applies to a trust the object of which is public utility. In delivering the judgment of the Privy Council in The Trustees of Tribune Press, Lahore v. The Commissioner of Income-tax, Punjab, Lahore (1939) 2 M.L.J. 444 : 1939 L.R. 66 IndAp 241 : I.L.R. (1939) Lah. 475 (P.C.) Sir George Rankin said:
Their Lordships are in agreement with this view and see nothing in the Indian Income-tax Act to discharge the Court of its responsibility in coming to a finding as to the character of the object of a trust--a matter which bears directly upon its validity. It is to be observed moreover, that under the Income-tax 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 wakfs and Hindu endowments.
8. In Umar Bakhsh v. Commissioner of Income-tax, Punjab I.L.R.(1931) Lah. 725 : 5 I.T.C. 402 (F.B.) the Lahore High Court expressly held that the expression 'religious or charitable purposes' in S.4 (3) (i) has to be construed with reference to English law and not to the personal law of the assessee and this opinion was accepted by the Patna High Court in Humayun Rasa Chowdhury v. Commissioner of Income-tax, Bihar and Orissa 10 I.T.C. 7. The learned Advocate for the assessee (muthavalli) has suggested that the decision of the Judicial Committee in The Trustees of Tribune Press, Lahore v. The Commissioner of Income-tax, Punjab, Lahore (1939) 2 M.L.J. 444 : L.R. 66 IndAp 241 : I.L.R. (1939) Lah. 475 (P.C.) has negatived this opinion, but we cannot read the judgment in that sense. The passage which has just been quoted from the judgment of the Privy Council speaks of the test of general public utility. As this is the test so far as the Indian Income-tax Act is concerned it is not necessary to consider whether the trust here would be deemed to be charitable in England. Even assuming that the Court may have regard to Muslim ideas in deciding whether a Muslim trust fulfils the test of general public utility, it cannot be said that that part of the trust deed which relates to the setting aside of income for the descendants of the donor constitutes a trust for general public utility. The beneficiaries are to be members of the donor's own family. The utility is not of a public, but clearly of a private nature. For these reasons we would answer the first question in the negative.
9. The second question calls for no discussion. The position is that the muthavalli has in his hands income belonging to a private trust. Income of a private trust is not exempt from taxation and the muthavalli is assessable in respect of it, because he holds it. It follows that the answer to the second question is in the affirmative.
10. As the questions referred have been answered against the assessee, he must pay the costs, Rs. 250.