Trustees Of The Wijeyewardene Charitable Trust V. Commissioner Of Income Tax

1946 Present: Howard C.J. and Canekeratne J.

TRUSTEES OF THE WIJEYEWARDENE CHARITABLIE

TRUST, Appellants, and COMMISSIONER OF
INCOME TAX, Respondent.

29-8-Income Tax. No. 93/174.

Income Tax-Trust for relief of the poor relations of set floe-A valid charitable trust--Exemption coin to, ration-Income Tax Ordinance (Cap, 188), .5. 7 (1) (c).

A trust for the relief of the poor relations of a settler constitutes a via lid eliminable trust, oral any income derived from property held antler such trust is exempt, under section 7 (1) (e) of the Income Tax Ordinance, from taxation.

CASE stated for the decision of the Supreme Court under the provisions ,l of section 74 of the Income Tax Ordinance (Cap. 188). The appellants were the trustees appointed under the last will of Mrs. Helen Wijeyewardene, who died in the year 1940. By Clause 7 of the said last will the deceased devised certain properties to her trustees in trust to use the net ingestion thereof for the following purposes

(a) recombine gradually the restoration work now being carried on by inc at the Kelaniya Temple.

(b) To aid either occasionally or regularly my relations who are or may become poor including members of my own family and who in the judgment of my trustees are in need of such aid in consequence of illness, financial difficulties and the like or on the occasion of marriage, deaths, and the like.

(c) To support in such manner and to such extent as my trustees may think fit such Buddhist charitable institutions and temples as my trustees may from time to time select.?
   
The questions of law on which the decision of the Supreme Court was sought were formulated in the case stated as follows

(a) In view of the provisions of Clause 7 (6) of the last will of the deceased, is the Trust ?of a public character? within the meaning of section 7 (1) (c) of the Income Tax Ordinance ?

(b) The view of the provisions of the said Clause 7 (6) has the Trust been ?established solely for charitable purposes ? within the meaning of the said section 7 (1)

H. V. Perera, K.C. (with him C. B. L. Wickremasinghe ), for the assessee, appellant.-The income of any institution or trust of a public character established solely for charitable purposes is exempted from taxation under section 7 (1) (c) of the Income Tax Ordinance (Cap. 188). Charitable purpose includes relief of the poor, education and medical relief-vide section 2 of the Ordinance. ?Poor relations must be distinguished from ?next of kin ?. Charitable trusts are mainly an institution of English law. In the case of Compton, Powell e. Compton and others (1944) 2 A. E. R. 255 certain moneys

were to be invested in trustee stocks for the education of children of three specified families. All the cases dealing with poor relations are cited at the bottom of page 256 and at page 257. In the present case the poor relations are at specified and therefore a larger class of persons would be able to chitin than in Compton?s case ; the benefit of poor relations indirectly benefits the public. Trusts for the benefit of poor relations are to be considered charitable trusts-See Tudor en Charities (5th Edition) p. 26.

[HOWARD C. J.-Are not peer relations a fluctuating body of private individuals ?

Poor relations of an individual are a section of the public. Where an estate was bequeathed to the trustees of a fund for the benefit if Now South Wales returned soldiers, it was held that the gift created a valid charitable trust -Verge s. Somerville and others (1924) A. C. 496. Lord Greene discusses the meaning of the terms ?public character  and ?a section of the public ? in Re Compton, Powell v. Compton (1945) 1 A. E. R. 198 at 201. Section 7 (1) (c) of on Income Tax Ordnance uses the words ?public character ?and therefore it is wider in its application than the words ?for the relief of the public ?.

H. H.

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