Judgment

HEGDE, J. : These appeals were brought on the strength of the certificates granted by the High Court of Calcutta against its judgment in references under section 66 (1) of the Indian Income-tax Act, 1922 (hereinafter called the Act).

2. The questions referred to the High Court are :

"(1) Whether on the facts and in the circumstance of the case and on a proper construction of three deeds executed on the 3rd November, 1944, the 25th September 1947 and the 17th March 1951, referred to in the order, the Tribunal was right in holding that there was only one beneficiary viz. Sri Sri Iswar Gopal Jew, under the trust?

(2) If the answer to the question (1) be in the negative, then whether the income of the Trust was to be assessed at the maximum rate by virtue of the first proviso to section 41 (1) of the Income-tax Act, 1922?"

3. The High Court answered the first question in the affirmative and in view of that answer, it did not find it necessary to answer the second question.

4. The facts found by the tribunal, as could be gathered from the statement of the case submitted by it are as follows :

5. Shri Badriprasad Agarwalla, a Hindu governed by Mitakshara School of Hindu law, had three wives, (1) Sukti Devi, (2) Krishna Devi and (3) Kokli Devi. From the second wife, Krishna Devi, he had a son named Fulchand born in March 1929. After the death of the second wife, Badri Prasad Agarwalla took Kokila Devi as his third wife. From her he had six sons, the eldest of whom is Nirmal Kumar born in 1942. On November 3, 1944, he executed a deed of trust by which he transferred to the trustees two of his self-acquired properties situate at 41/16-A, Russa Road and 21, Paika Para Row for the benefit of the deity Sri Sri Iswar Gopal Jew whom he had consecrated at his ancestral house at 1/2, Krishnaram Bose Street, Calcutta. The intended purposes of the said trust were set out in the deed itself. Under that deed Kokila Devi was appointed as a trustee. It was provided in that deed that each of the sons of Badri Prasad on attaining majority would automatically become a trustee of that trust. It may be mentioned here that in accordance with this provision, Fulchand became a trustee on attaining majority in March, 1947 and Nirmal Kumar, the eldest son of Kokila Devi also became a trustee in the year 1960. Under the said deed, Kokila Devi was appointed as the sole Shebait of the idol until the sons of Badri Prasad became majors. But as soon as they became majors they were to be joint Shebaits of the idol along with Kokila Devi. 2/3rd of the rent realised from the trust properties was to be utilised towards seva of the deity and the balance 1/3rd was to be retained in the hands of the trustees to meet the collection charges, taxes and other incidental expenses relating to the said properties.

6. On September 25, 1947, Badri Prasad executed another deed to which he, Kokila Devi and Fulchand were parties. The deed was admittedly a supplement to the earlier deed dated November 3, 1944.

7. On March 17, 1951, Badri Prasad executed a third deed. To that deed Badri Prasad, Kokila Devi and Fulchand were parties. This deed was also expressly made as a supplement to the deed of November 3, 1944. The avowed object in executing this deed was to clarify the status, rights and liabilities of the trustees and the shebaits in office for the benefit of and in the interest of the deity and to avoid future litigation. Under this deed, it is mentioned that the properties covered by the first two deeds were given in absolute dedication to the deity established by the settlor at 1/2, Krishnaram Bose Road, Calcutta and the trustees and shebaits held their offices as such for carrying on daily and periodical sevas and worship of the deity and they were to hold the properties for and on behalf of the deity. Therein provision was made for the management of the property; for conducting the sevas and pujas of the deity and for maintenance of proper and necessary accounts.

8. The Inco