JUDGMENT

Pathak, J. - The Revision Board, constituted under the U. P. Agricultural Income Tax Act, 1948, has referred the following question u/s 24(4) of that Act:

"Whether, under the circumstances of the case, the property was held by the assessee under 'other legal obligations' wholly for religious or charitable purposes ?"

2. A notice u/s 15(3) of the U. P. Agricultural Income Tax Act was served on Mahant Indresh Charan Das, Sajjada Nashin, Darbar Guru Ram Rai, requiring him to furnish a return of his total agricultural income for the year 1355 Fasli. The assessee replied that the agricultural income of the darbar was exempt from tax u/s 8 of the Act. The contention found favour with the assessing authority and the proceedings were dropped. Assessment proceedings pending for the years 1356, 1361, 1362 and 1363 F. were similarly closed. The assessing authority who took proceedings for the years 1357 to 1360 F., however, adopted a different view and held the assessee liable to tax. Appeals were filed by the assessee against those assessment orders but the appeals were dismissed. Nine revision applications were filed before the Revision Board, five by the State relating to the years 1355, 1356, 1361, 1362 and 1363 F. and four by the assessee relating to the years 1357 to 1360 F. The Revision Board, by a common order dated December 10, 1968, allowed the revision applications of the State and dismissed those filed by the assessee. And now, this consolidated reference has been made.

3. Section 8 of the Act, under which the exemption is claimed, provides : "8. Exclusion of income from trust, etc.--Any income derived from property held under trust of other legal obligation wholly for religious or charitable purposes and, in the case of property so held in part only for such purposes, the income applied or finally set apart for application thereto, shall be exempt from liability to tax under this Act."

4. The property in respect of which the assessee claims exemption consists of forty villages, of which seven are said to owe their origin to grants made by Raja Fateh Shah of Garhwal. The case of the assessee was that the original grant was made in favour of Guru Ram Rai, the head of the Udasi sect, who had retired to Dehra Dun and had built a temple at Dhamanwala. The seven villages were endowed in favour of the temple. During the time of the third mahant, Guru Har Sewak Rai, the political administration of the region changed hands in 1803 from the kings of Garhwal to the Gorkha rulers of Nepal and they in turn yielded the district in 1815 to the British. During the period of Gorkha rule, King Yudha Bikram Shah Bahadur granted two copper plates (thamra patras) in recognition of the endowment of the seven villages to the temple of Guru Ram Rai. The British Government, during its time made a robkar, dated November 14, 1815, acknowledging the original sanads and sanctioned the continuance of the endowment after the death of Guru Har Sewak Bai. The assessee also pointed out that the management of the endowment devolved from Guru to Chela, that on accession to the gaddi the mahant severed his relations and connections with the family in which he was born and lived a celibate life, and that he did not bold the property as his personal property. The property belonged to the institution and the mahant was merely its administrator. It was also claimed that from the time of its inception the institution had been carrying on various acts of charity and performing the several religious functions recognised by the Udasi sect. It was running educational institutions, providing free medical relief to the needy, running a kitchen (sadabrat), providing free food to needy persons, observing the yearly jhanda fair, shradh, guru parwa, holi, diwali and other festivals and performing daily puja, aarti, kirtan and katha. A whole volume of documentary evidence, including the gazetteers of the time, was produced by the assessee in support of its case.

5. On behal