JUDGMENT
1. Four questions have been referred by the Tribunal for the opinion of this court. The questions referred are as follows :
"1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the property was held by the mutawalli under trust or other legal obligation for a public purpose of charitable or religious nature ?
2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the public are interested in a substantial portion of the income of waqf property and also in the corpus ?
3. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was correct in law in holding that the asses-see was entitled to the benefit of exemption under Section 5(1)(i) of the Wealth-tax Act, 1957 ?
4. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that the provisions of Section 21A of the Wealth-tax Act, 1957, were not applicable in the instant case ?"
2. Mr. Chopra, appears on behalf of the Department, and Mr. B. Dayal, on behalf of the respondents.
3. Mr. Chopra, appearing on behalf of the Department, submits that it is not clearly laid down as to which portion of the property will be used for charitable purpose and what portion will be utilised for the purposes "other than charitable", as such, the provisions of Section 5(1) of the Act are applicable.
4. Mr. B. Dayal, for the assessee, submits that the finding of the Tribunal is wholly in favour of the petitioner which has stated that in the waqf deed, the public were interested in a substantial portion of the income of the waqf properly and the corpus vests in God, the Almighty, immediately on the execution of the waqf deed on July 9, 1944. The Tribunal on a finding of fact has stated that "we are unable to accept the contention of the Revenue that the element of charity created by the waqf deed is illusory and hence the wakf was not substantially for religious and charitable purpose." It has been held that from the reading of the various clauses of the waqf deed that a waqf was created by the donor out of his own property in accordance with Muslim law and the provisions of the Musalman Wakf Validating Act, 1913. The donor had divested himself of all the property rights and held them only as mutawalli in perpetuity and for ever. It is also seen that nearly 25 per cent. of the income of the waqf property was to be utilised either for the maintenance of waqf property for charity and also as a reserve fund for preserving the corpus and also for use on charitable and religious occasions and purposes by the mutawalli. Thus, we are inclined to agree with learned counsel that the public are interested in a substantial portion of the income of the waqf property and also the corpus vests in God, the Almighty.
5. A case cited at the Bar goes to support the contention. The income of the corpus may not be used wholly for the purpose of the trust. It is sufficient if the purpose and object itself is predominantly for a public charitable purpose. In that view of the matter, the assessee was entitled to exemption under Section 5(1) of the Act.
6. I have considered the submission of learned counsel for the Department and the Revenue and on the facts found by the Tribunal. We hold that the income of the trust was used for religious and charitable purpose and the corpus vests in God, the Almighty. Under Section 5(1) of the Wealth-tax Act, exemption is exigible to a trust or legal obligation for any property held by him under trust or other legal obligation for any public purpose of a charitable or religious nature in India. This means that the purpose of the trust will be charitable or religious. It does not mean that a particular asset be wholly utilised or used for charitable or religious purposes in India.
7. In the instant case, the finding of the Tribunal is clearly in favour of the petitioner which has held that the property was used for the religious and charitable purposes and the corpus vests in God, the Almighty. In that view of the matter, we answer the questions in the following manner :
Question No". 1 is answered in favour of the assessee and against the Department.
Question No. 2 is answered in the affirmative and against the Department, in favour of the assessee.
Questions Nos. 3 and 4 are answered in the affirmative, in favour of the assessee and against the Department.
8. In that view of the matter, the reference is, accordingly, answered. No order as to costs.