Per Shri A. Krishnamurthy, Judicial Member - These three appeals are by the assessee, Shri Jalal Kalilur Rehman, relating to his income-tax assessments for the years 1975-76 to 1977-78. The sole objection common in these appeals pertains to the addition to the assessees income, for each of the years, of income derived from a property comprised of a tannery, which, according to the assessee, was declared orally as a wakf property in 1947. It appears that subsequently there was a declaration in a deed dated 30-9-1965 confirming the earlier oral declaration. An application was also made on 27-12-1975 to the Wakf Board under section 25 of the Wakf Act for registration and it appears that after due enquiry under section 27 of the Wakf Act, the Wakf Board issued the necessary notification on 23-11-1977 in the Tamil Nadu Governments Gazette. It is stated before us that the department has accepted the assessees claim for exclusion of the income derived from the property, for the period subsequent to the Gazette notification, but not for the years under appeal, which cover the period before the date of notification. It is the submission of the assessees learned counsel before us that for valid creation of a wakf there need not be an instrument in writing and a wakf can be created even on an oral declaration. The three legal incidents of wakf are, it is stated, (1) irrevocability, (2) perpetuity, and (3) inalienability. It is submitted that it is not in dispute that the requirements are satisfied in this case. The registration does not mean that the wakf is created only from the date of registration, or that it is valid only from that date. As in this case, it is submitted, there was already an oral declaration, the terms of which, at any rate, were reduced to writing on 30-9-1965, for the relevant previous year, the property, being the tannery building, was a wakf property and the income was not liable to be included in the assessees total income. Secondly, it is argued that even if registration is considered to be essential for recognition of the wakf, the effective date of registration in this case, although made by notification on 23-11-1977, would relate back to the date of creation of the wakf, namely, the year 1947, or at any rate the date 30-9-1965. In this connection, reference was made and reliance placed on the decision in U. On. Maung v. Maung Shwe Hpaung Shwe Haung AIR 1937 Rangoon 446.
2. The learned departmental representative in reply, conceded that the claim of the assessee that the wakf was created orally in 1947, was proved to be clearly incorrect according to the assessees own admission considered in the order of the Commissioner for the year 1974-75, and it would follow, therefore, that there was no declaration of the wakf in respect of the property in 1947 and, consequently, the wakf in this case could be said to have been declared only by the instrument in writing in 1965. Since the assessee has chosen to reduce in writing the declaration of wakf by this instrument, which must be held to purport to convey the property to wakf, it is argued that the provisions of the Transfer of Property Act will come into play, and unless it is registered, it would not be valid. It is further argued that according to article 189 in Principles of Mohammaden Law by Mulla (17th edition) if immovable property of the value of Rs. 100 or above is purported to be conveyed to a wakf, it requires registration under the Registration Act. The fact that the wakf is registered under the Wakf Registration Act, it is submitted, does not validate the instrument. In other words, it is submitted that non-registration of the deed in this case on 30-9-1965 under the Indian Registration Act, makes the transfer of the property to the wakf invalid. It is submitted that the observations of the ITO in the assessment order for 1977-78, where it is mentioned that the property would vest with the wakf on the date of notification in the Gazette does not reflect the correct state of law and arise from a mistaken notion of the law. It is further argued that section 5(2) of the Wakf Act contemplates a notification of the beneficiaries who derive right and interest in the wakf property and, therefore, it is argued that there is no entitlement before such notification. Lastly, it is submitted that even if in this case the registration by notification is held to be valid, the transfer can take effect only from the date of notification and not earlier. As the periods involved in these appeals are prior to such notification, it is submitted, the assessee was rightly assessed on the income.
3. The points that arise for consideration in this case are firstly, as to whether the assessee had created an oral declaration of wakf in respect of the property in question in 1947 or not. Secondly, whether the wakf deed dated 30-9-1965 is an instrument declaring for the first time the wakf, in regard to the concerned properties, consisting of lands and tannery buildings, and conveying the properties to the wakf, thirdly, whether the deed of wakf dated 30-9-1965 requires registration under the Indian Registration Act and in the absence of registration, it cannot be said that the property has been conveyed to the wakf and lastly, whether even if the registration of the deed of wakf under the Registration Act is not necessary and the registration of the wakf under the Wakf Act is sufficient, the wakf would take effect only from the date of notification of the registration and not earlier.
4. In Wakf Laws and Administration in India by S. Athar Husain and S. Khalid Rashid, 2nd edition, published by Eastern Book Co., 34, Lalbagh, Lucknow, it is stated in Chapter X that there is no essential formality or the use of any express phrase or term requisite for the constitution of a wakf and the law looks to the intention of donor alone. Further, it is stated that it is not necessary that wakf should be made in writing and all that it is not necessary in constituting a wakf is that some sort of declaration either oral or in writing must be made. In the present case, it is the contention of the assessee that there was an earlier declaration of the wakf in 1947 and the deed dated 30-9-1965 merely confirms such a declaration. The department in 1947 relying on the answer given to the query reproduced in the Commissioners order under section 264 of the Income-tax Act, 1961 (the Act) for the assessment year 1974-75 and considered to be very significant by the Commissioner. The relevant question and the answer as stated in the order of the Commissioner are reproduced in this connection :
'Question. In the deed dated 30-9-1965, Shri Jalal Shoaibur Rahman (aged between 10 and 13) had been shown as a beneficiary. You state that the wakf was created in 1947 itself when he was not born. How is it that you say that the wakf was created in 1947 itself ?
Answer. In 1947 I intended to go to Mecca and in that connection I intended to create wakf. But my trip was cancelled as no ticket was available. Hence the intended wakf was not completed and finalised. It is only on 30-9-1965 I wrote up the wakf deed dated 30-9-1965. Hence there is (no) wakf deed or declaration in my possession to prove the wakf created in 1947.'
Now, this reply has to be read in the context of the averments in the wakf deed itself and we consider it necessary to reproduce the material recitals therefrom :
'WHEREAS with the object of attaining Kurbat or nearmosa in the next world I had already dedicated in perpetuity in January 1947 and made a wakf of the income of the scheduled property in accordance with the tents of Islam for maintenance and educational support of my sons and their descendants from generation to generation and ultimately for such religious, pious, and charitable purposes as are hereinafter mentioned;
AND WHEREAS I am shortly leaving for Mecca and want to put down in writing the terms of the said wakf, which I had already made in January 1947;
NOW THIS WAKFNAMA WITNESSETH that I, Jalal Md. Khalilur Rehman, the said wakf do confirm having made the wakf of the income of the property more particularly described in the Schedule hereunder in January 1947 and made Wakf-alal-Aulad of the said incomes of properties more fully described in the Schedule hereunder with effect from the date of dedication, so that the Muthawalli for the time being of this wakf shall hold the same upon trust for the purpose and subject to the conditions and provisions hereinafter mentioned :
1. The wakf shall be known as The Wakf of Jalal Mohamed Khalilur Rehman Sahib.
2. I have been functioning as the Muthawalli or Trustee of this Wakf-alal-Aulad from January 1947 onwards and I shall be the Muthawalli thereof for the term of my natural life and I declare that the income of property settled as wakf in January 1947 has vested and shall vest in me as the First Muthawalli of this wakf.'
On a reading of the document and the reply given by the assessee to the query stated above as a whole, it is not correct to say that the assessee did not in fact created the wakf in January 1947. The purport of the reply as we read, is only that the assessee besides declaring orally the wakf, also wanted to reduce the terms thereof in writing which evidently he believed would be necessary to complete the dedication or declaration, and this was not done by him in 1947. This is apparent from his statement that the intended wakf was not completed and finalised. The further statement in the reply clearly shows that all that he said was that there was no deed or any declaration in writing to prove the creation of the wakf in 1947. Another point made by the Commissioner in his order in this connection to disbelieve the claim of the assessee that the wakf was created in 1947 is that one of the beneficiaries Shri Jalal Shoaibur Rahman,; as per the deed dated 30-9-1965, was not born when the wakf was created in 1947 and, therefore, evidently there could not be a wakf whereunder alal Shoaibut Rahaman is a beneficiary. The inference, according to us, proceeds from misconception or misunderstanding of the requirement of the creation of a wakf. What is contemplated for the creation of a wakf is not that the names of the individual beneficiaries, being of the sons or descendants of the settlor, should be indicated, but a declaration jointly in favour of the sons and descendants by the individual concerned could be enough, especially when the wakf is created by an oral declaration. Subsequently, when the individual reduces the terms of the wakf in writing and chooses to mention the names of the sons or descendants then existing therein it does not in any way contradict or disprove the earlier declaration. The apparent discrepancy noted by the Commissioner is not a real one, which would disprove the earlier oral declaration. We, therefore, hold that there was creation of a wakf by the assessee in January 1947, the terms of which were reduced in writing by a deed dated 30-9-1965. The observation in page 114 of the book Wakf Laws and Administration in India (supra) on which reliance was placed by the learned departmental representative in support of his claim that the wakf in this case could be said to be created, if at all, only by the deed dated 30-9-1965, reads :
'Though oral wakf is permitted yet when the terms of a wakf are reduced to writing, no evidence can be given to prove the terms except the document itself or secondary evidence of its contents, when it is admissible. Where a wakf deed is executed, it must comply with the provisions of the Registration Act. Thus, a wakf deed of immovable property of Rs. 100 or upwards would require registration.'
This observation does not, in our reading, show that when the terms of the wakf deed are reduced to writing, the wakf itself should be held to be created by the deed. All that it says is that where there is a deed setting out the terms of the wakf reduced in writing, no other evidence can be adduced to prove the terms of the wakf except the deed itself of secondary evidence of its contents when it is admissible. In other words, only the document itself can be relied on or produced in evidence or prove the terms and not any other material or evidence. A wakf deed would require registration under the Indian Registration Act if it purports to convey or transfer immovable property of the value of Rs. 100 or upwards, i.e., the wakf itself should be created by the deed, but where a deed merely sets out the terms and conditions of an earlier wakf already created orally, which is valid, it does not, according to us, require registration under the Indian Registration Act. Coming to the registration under the Wakf Act, this also does not affect the position as to the validity of the wakf created in 1947. The purpose of the Wakf Act is to see that the wakfs are properly maintained, controlled and administered and income thereof is duly applied to the objects and the purpose for which the wakfs were created and intended. The Act, therefore, provides for compulsory registration of the wakf under section 25, but it does not mean that for validity of the wakf, registration is essential or that it is only from the date of registration the wakf would take effect. As a matter of fact, sub-section (8) of section 25 provides for registration not only of the wakfs created after the coming into force of the Act in 1954, but also of all the wakfs created prior to it. It is, therefore, not correct for the department to contend that the wakf would take effect only from the date of registration and not from any earlier point of time. According to us, on a consideration of the facts and circumstances in this case, the creation of the wakf by the assessee in 1947 is evidenced by the deed dated 30-9-1965, which is long before the relevant previous years. This is not to say that the wakf came into existence only by the deed of that date. All it means is that the existence of the wakf created in 1947 is evidenced by the document, namely, the deed dated 30-9-1965, and there can be no dispute on the question of its existence from that date onward. In these circumstances, we upheld the claim of the assessee that the inclusion of the income from the property concerned, in respect of which there was already a wakf created, is not justified. The addition is, accordingly, deleted.
5. In the result, the appeals are allowed.