Judgment

HEGDE, J. :- These are appeals by certificate. They arise from a reference under Section 27 (1) of the Wealth Tax Act, 1957 (To be hereinafter referred to as the Act). These appeals relate to the Wealth Tax assessment of the appellant/assessee for the assessment years 1957-58 and 1958-59, the relevant valuation dates being December 31, 1956 and December 31, 1957.

2. The two questions of law referred to the High Court are :-

"1. Whether on a true construction of the indenture of trust dated 11-6-1941 the trustees of the Trust constitute an assessable unit under the provisions of the Wealth Tax Act?

2. Whether the property held by the trustees under the indenture of trust dated 11-6-1941 is held for any public purpose of a charitable or religious nature in India within the meaning of Section 5 (1) (i) of the Wealth Tax Act?" The High Court has answered both these questions in favour of the Department and against the assessees. Hence these appeals.

3. The facts of this case lie within a narrow compass. Govindram Gordhandas Seksaria, Ramnath Gordhandas Seksaria, Makhanlal Gordhandas Seksaria and Bholaram Gordhandas Seksaria constituted a Trust on June 11, 1941 in respect of a sum of Rs. 11 lac (Rupees eleven lacs). That Trust was known as Gordhandas Govindram Family Trust . Clause (2) of the Trust deed says that it was created "for giving help or relief to such poor Vaishya Hindoos or other Hindoos as the trustees may consider deserving of help in the manner and to the extent hereinafter specified and subjects to the conditions and directions stated in the next following clauses and/or for the charitable object or objects hereinafter mentioned." Clause (3) (a) of the Trust deed provides that "the conditions and directions to be observed and followed by the Trustees in the execution of the Trusts herein declared are as follows :-

"Poor Vaishya Hindoos who are members of Seksaria families shall be preferred to poor Vaishya Hindoos of Navalgadh not belonging to that family."

4. Sub-clauses (b) to (q) provide for the payment of maintenance and marriage expenses of the poor male or female descendants of Seksaria family.

5. We shall now set out sub-clauses (r) to (u) of clause (3). They read :-

"(r) Rs. 5/- (Rupees five) per month may be paid as and by way of maintenance of any poor male Vaishya Hindoo who may be deserving of help.

(s) Rs. 5/- (Rupees five) per month may be paid as and by way of maintenance to any poor unmarried female Vaishya Hindoo or a poor Vaishya Hindoo or a poor Vaishya Hindoo widow who may be deserving of help.

(t) Rs. 500/- (Rupees five hundred) may be expended or given for the purpose of meeting the expenses of marriage of any poor male Vaishya Hindoo who may be deserving of help.

(u) Rs. 500/- (Rupees five hundred) may be expended or given for the purpose of meeting the expenses of marriage of any poor female Vaishya Hindoo who may be deserving of help."

The deed further provides :-

"If the income of the Trust Estate is not sufficient to carry out the charities specified in sub-clauses (a) to (u) above the charity specified in an earlier sub-clause shall be given priority over a charity specified in a later sub-clause."

6. From the above, it is clear that charity provided was primarily for the benefit of the members of the family of Seksaria, no doubt including both male and female descendants. It is also clear from the deed that the amounts provided for the payment of maintenance and marriage expenses for the poor members of the Seksaria family is bound to take away a substantial part of the income of the trust, if not the whole of it.

7. As mentioned earlier, the Trust is known as "Gordhandas Govindram Family Trust". That is a clear pointer. That shows that the Trust was primarily intended for the benefit of the family of Gordhandas Govindram. This is made further clear from the various provisions in the Trust deed. A reading of the Trust deed as a whole clearly goes to prove that the charity under that deed begin