A registered deed is not necessary for the creation of a religious and charitable endowment, and the dedication of property for public charitable purposes is valid without the need for a registered instrument.

PRAKASH KRISHNA, J.

( 1 ) THE assessee respondent, a medical practioner, filed her return of Income for the assessment year 1978- 79 and 1979-80, In the return she did not include income from the property No. 16/72 civil Lines, Kanpur. In reply to the show cause notice issued by the Income Tax Officer it was submitted by her that the said property with hospital has been irrevocably set apart and dedicated for public charitable purpose in favour of Chandra Kanta Jawahar Lal Public Charitable Trust, kanpur on 1-4-1977. The assessee placed a copy of trust deed and other details along with the certificate under Section 12-A of the Income Tax Act ( herein after referred to as the Act) before the Income Tax Officer, Kanpur in support of her case.

( 2 ) THE Income Tax Officer rejected the aforesaid contention of the assessee on the ground that property No. 16/72 Civil Lines, Kanpur was not transferred to the trust by means of registered deed, as required under Section 17 of the Registration Act, meaning thereby the assessee continues to be owner of the said property. Such act of the assessee amounts to transfer within the meaning of Section 63 (b) of the Act. It was brought to the notice of the Income Tax Officer that the said trust namely Chandra Kanta Jawahar Lal Public Charitable Trust, Kanpur, has been granted registration by the Commissioner of Income Tax, Kanpur under Section 12-A of the Act. This plea was not accepted by the Income Tax Officer with the observation that whether income of the trust is exempt or not will be decided on merits of the case. In appeal, against the assessment order the plea of the assessee was partly accepted. The appellate authority namely c. I. T (A) took the view that there is no material on record to show that the trust was a benami of the assessee and that the assessee had charged any fee for personal services rendered by her to the trust. The Commissioner of Income Tax (A) was of the view that although | house property no. 16/72 Civil Line Kanpur was utilized by the trust but as the assessee was the founder and managing trustee therefore the legal ownership over the property still vested with the assessee and the income from this property had to be assessed under Section 22 of the Act at the hands of the assessee.

( 3 ) THE assessee took up the matter before the Income tax Appellate Tribunal, in respect of inclusion of income from the aforesaid property in her hands. The Tribunal allowed the appeal of the assessee as it was of the view that no registered document was required to be executed by the assessee to create a religious endowment with respect to the property in question. The Tribunal found that the property was dedicated by the assessee by renouncing her right in favour of the trust for Public charitable trust on 1-4-1977 and, therefore, the trust became its owner from that date. The assessee confirmed her renunciation of the disputed property in favour of the trust by means of writing dated 7-4-1977. The Tribunal was of the view that the assessee ceased to be the owner of the property in question with effect from 1-4-1977 and the property has been vested with effect from that date in the trust for Public charitable purposes and as such its income is not liable to taxed at the hands of the assessee. According to the Tribunal the provision of Transfer of Property Act and the Registration Act would not apply to such dedication.

( 4 ) THE Tribunal at the instance of the department has referred the following common questions of law under Section 256 (1) of the Act:

1. WHETHER in law and on facts the Tribunal was justified in excluding the income from property at 16/72 Civil Lines, Kanpur from the hands of the assessee? 2. WHETHER transfer of an immovable property by any person without any consideration to a trust which is hot regarded as Charitable Trust, is covered under the definition of dedication/ endowment? 3. WHETHER to complete such transfer as described in question No. 2 above, there i

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