The question that arises in this reference is whether an income arising from a certain trust is exempt from tax on the ground that it falls within S. 4 (3) (i) of the Indian Income-tax Act. The trust in question was constituted on the Diamond Jubilee of Mr. Walchand Hirachand, a well-known industrialist of Bombay, and the trust-deed which is dated 31st May, 1943 sets out the objects of the trust. The recitals clearly state how the trust came into existence and the origin of the trust was the celebration of the 61st Birthday of the Settlor and a committee of the employees of the Settlor present ed to him a sum of Rs. 4,11,111/- and the recital further points out that the Settlor was anxious to strengthen the hands of the organisation which con trolled the various companies in which the Settlor had an interest and. therefore, he thought it necessary to maintain a uniform control over the management and working of the Premier Construction Co., Ltd., by centralising the voting power in the company in the hands of a certain definite body instead of having it spread over in individuals or small groups. Then we have the operative clause which provides that the trust fund shall be invested in the purchase of shares of any kind of the Premier Construction Co., Ltd. Cl. 2 provides that for 18 years the income is also to be invested in the shares of the Premier Construction Co., Ltd., and Cl. 3 pro vides that on and after the expiry of the period of 18 years the net income derived from the investments is to be utilised for all or any one of the four objects mentioned in that clause and those objects are, giving scholarships, medical relief, monetary help to the poor and needy, and relief to the poor and distressed in time of famine, cyclone, floods, earthquake, etc. There is a proviso to (his clause which entitles the Trustees to give preference to such persons as are eligible under the four objects enumerated and who are at time or have in the past been employees of the Premier Construction Co.. Ltd. Clause 4 also casts an obligation upon the Trustees to attend meetings of the Premier Construction Co., Ltd., and to exercise their vote in such manner as would be conducive to the furtherance of the various objects of the trust.

(2) The first question that we have to consider is whether the income from this trust is derived from property which is held under trust wholly for religious or charitable purpose; and the contention of Mr. Joshi is that, on a true reading of this sec tion, what is required is that in the year of account in which the exemption is claimed there must be a trust in existence for religious or charitable purposes from which the income in respect of which exemption is sought is derived. Mr. Joshi says that, when we look at the scheme of this trust-deed, it is clear that in the year of account no such trust was in existence. What is urged upon us is that the trust for charitable purposes would only come into existence after 18 years and prior to the 18 years there is no trust whatever for any charitable purpose, the only obligation upon the Trustees being to invest the income in the shares of the Premier Construction Co., Ltd. Mr. Joshi is right that be fore we grant an exemption to the assessee under S. 4(3)(i), we must be satisfied that at the relevant time - and the relevant time is the year of ac count - there is property which is impressed with a charitable trust, that property yields income and it is that income for which exemption is sought. Now it is not disputed that the four objects to which reference has been made are objects of a charitable nature and that a trust in respect of those four objects would be a trust which would fall within the ambit of S. 4(3)(i). What is said is that there is no obligation with regard to these four objects until a lapse of 18 years; it is only after 18 years that there is an obligation upon the Trustees to spend income on these four objects; and, therefore, at the relevant date w

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