The individual shares of the beneficiaries of a wakf are indeterminate within the meaning of the first proviso to S. 41(1) of the Indian Income-tax Act, 1922, if the wakf deed does not expressly specify the shares of the beneficiaries, nor does it do so by necessary implication.

Judgment

SUBBA RAO, J. : This appeal by certificate granted by the High Court of Kerala raises the question of the application of S. 41(1) of the Indian Income-tax Act (hereinafter called the Act) to the facts of the case.

2. One P. B. Umbichi and his wife executed a deed dated December 20, 1915, creating thereunder a wakf of their properties. It was provided therein, inter alia, that the income from the properties mentioned therein should be utilised for the maintenance of their two daughters and their children on the female side. For 40 years upto and inclusive of the assessment year 1954-55, the income-tax assessments were made on the wakf through its manager under S. 41 of the Act in the status of an individual. But, for the assessment year 1955-56, the Income-tax Officer treated the assessee as an association of persons, and, on the ground that the shares of the beneficiaries are indeterminate levied tax at the maximum rate under the first proviso to S. 41 of the Act. On appeal, the Appellate Assistant Commissioner of Income-tax held that the Income-tax Officer was not right in holding that the members of the family were indeterminate, but he confirmed the assessment for the reason that, as the shares were not specified among the individual members of the family and also between the members of the family on the one hand, and the charitable and religious purposes on the other, the first proviso to S. 41 would be applicable to the assessee. On further appeal, the Income-tax Appellate Tribunal took the view that the proprietary rights in the property in question vested in the Almighty and that the Muthawalli was only to look after and administer the properties as a manager and, therefore, the proper person in whose hands the income from the properties should be assessed was the Muthawalli in his status as an "individual" at the rates applicable to an individual. In that view, the appeal was allowed. At the instance of the Commissioner of Income-tax, the Appellate Tribunal referred to the High Court of Kerala the following question for its determination :

"Whether in the facts and circumstances of the case the 1st proviso to S. 41 is applicable." The High Court held that the said proviso was not applicable, as under the wakf deed the beneficiaries and their shares were ascertainable. Aggrieved by the said order, the Commissioner of Income-tax has preferred the present appeal.

3. Mr. Rajagopal Sastri, learned counsel for the Commissioner of Income-tax, contended that on a fair reading of the terms of the wakf deed it would be deal that the Muthawalli was only directed to maintain the members of the family, that none of the members of the family had any ascertainable share in the income, and that, therefore, the case squarely fell within the first proviso to S. 41 of the Act.

4. Mr. Viswanatha Sastri, learned counsel for the respondent, in addition to his attempt to sustain the construction put upon the wakf deed by the High Court, contended that the instant case fell outside the scope of S. 41(1) of the Act; as the Muthawalli was only receiving the income on behalf of the Almighty, that the Almighty was not a "person", and that, therefore, as the main section did not apply, the proviso also would not be attracted, with the result that the Muthawalli would have to be assessed as an "individual".

5. As the argument turns upon the construction of S. 41 of the Act, it will be convenient at the outset to read the relevant part thereof.

"Section 41: (1) In the case of income, profits or gains chargeable under this Act which. , ,,. , . , . . any trustee or trustees appointed under a trust declared by a duly executed instrument in writing whether testamentary or otherwise, including the trustee or trustees under any Wakf deed which is valid under the Mussalman Wakf Validating Act, 1913, are entitled to receive on behalf of any person, the tax shall be levied upon and recoverable from such . . . . . . trustee or trustees, in the like manner a