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2. Whether, on the facts and in the circumstances of the case, the objects of the trust providing for promotion of science and technology and Muslim theology among Muslim intelligentsia, was hit by the provisions contained in cls. (a) and (b) of sub-s. (1) of s. 13 ?"

25.1 The facts of the said case can be stated as under :

The assessee claimed the exemption of its entire income under s. 11 of the Act. AO rejected the claim of the assessee on the ground that the trust was not charitable trust and it was hit by the provision contained in s. 13(1)(b) of the Act. The reason for rejection of the assessee's claim was that income was not applied for charitable purposes but only for construction of building for commercial purposes, which was not one of the objects of the trust. The AAC held that trust was partly charitable and partly religious. When the matter reached before the Tribunal, after examining cls. 13 and 14 of the instrument of trust, Tribunal held that the trust was partly charitable and partly religious and there was no apportionment of income between the two objects of the trust and it was left to the exclusive discretion of the trustee to spend whatever they like on any objects and hence the assessee was not entitled to claim exemption under s. 11 of the Act. The matter was carried to the Hon'ble High Court by way of reference. The operative part of the observation of the Hon'ble High Court is as under :
Moreover, even if we hold that the object is not only promotion of Muslim theology amongst the Muslim intelligentsia, but also promotion of science and technology among them, the income of the trust would not be exempt under s. 11 of the Act because the law is well-settled that if there are several objects of the trust, some of which are charitable and some non-charitable, and the trustees in their discretion are to apply the income to any of the objects, the whole trust would fail and no part of its income would be exempt from tax. The reason is that in such a case no definite part of the property or its income is allocated for charitable purposes and it would be open to the trustees to apply ITA.818/Bang/2015 Page - 12 its income to any of the non-charitable objects or religious purposes. In the instant case, the trustees are at liberty to apply the whole of the income for the promotion of Muslim theology among the Muslim intelligentsia."

26. In our opinion, both the authorities have misinterpreted the judgment in the case of Ghulam Mohidin Trust (supra). In that case it was held that as per the objects of the trust it was partly charitable and partly religious but as far as the present these two cases are concerned, nowhere it is the case of the AO that in both these cases the objects of the assessee are partly non-charitable or partly non-religious. Further, in that case there was no proper apportionment of the income between the two objects of the trust as it was left to the exclusive discretion of the trustees to spend whatever they like. In short, it was an arbitrary discretion given to the trustees to apply the income for the non-charitable and non-religious purposes. Moreover, in that case it was held that s. 13(1)(b) of the Act is attracted as the trust was intended to promote science and technology and Muslim theology among Muslim intelligentsia, which was the main and dominant object of the trust. In the present two cases it is not the case of the AO. In our opinion, the principles laid down by the Hon'ble High Court of Jammu & Kashmir has no application as far as the facts of the present these two cases are concerned.

ITA.818/Bang/2015 Page - 18 "Similarly, in the case before us also, the property is settled upon wakf, that is, for purposes which are considered to be religious, pious or charitable according to the notions of members of the Dawoodi Bohra community and further the income in the corpus of these properties settled upon trust must be used for Dawat purposes, that is, for the benefit of the Dawoodi Bohra community. Though the words of cls. 6, 7 and 8 are very wide in terms, in fact, that apparently wide discretion of the Mullaji Saheb is bound down by the two factors, namely, that this is a wakf, a dedication by a Mussalman of property for purposes which, according to the notion of Mussalmans, are pious, religious or charitable, and, secondly, it must be used for Dawat purposes, that is, for purposes which go to benefit the Dawoodi Bohra community. With these two limitations operating on him, even the apparently wide discretion conferred upon the Mullaji Saheb as Dai-ul-Mutlak for the time being is confined within the four corners of these two overriding factors and in view of these two overriding factors it must be held that the properties in question settled by the two deeds of 12th Jan., 1937, were settled upon trust for charitable or religious objects and were, therefore, entitled to exemption under s. 11(1)(a) of the Act of 1961. We must make it clear that the real controversy between the parties is regarding exemption under s. 11(1)(a) of the Act of 1961 and not whether the trusts are wholly religious or wholly charitable. Even if the trusts are partly religious and partly charitable, so long as no part of the income or corpus can be utilised for a purpose which is not either charitable or religious, there is no doubt that the exemption under s. 11(1)(a) will be available to the assessee. In the instant case, we find that, in spite of the apparently wide language of the clauses of the deed of trust, in fact reading the trust deed as a whole, it transpires, particularly in the light of the decision of the Bombay High Court in Advocate-General of Bombay vs. Yusuf Ali, AIR 1921 Bom 338, that the apparently wide discretion has to be exercised within the four corners of the wakf and for Dawat purposes. What are Dawat purposes, have been described by Marten J., at page 1102, in Advocate-General of Bombay vs. Yusuf Ali, AIR 1921 Bom 338, and, in our opinion, it is only within the four corners of Dawat purposes as recognised ITA.818/Bang/2015 Page - 19 by the Dawoodi Bohra community that the Mullaji Saheb can use the corpus or the income of this fund".