DERBYSHIRE, C. J.-In this matter the income tax Appellate Tribunal, Calcutta Bench, has referred to the Court this question :

"Whether the income derived by the applicant from the property held by the applicant under the Trust Deed of the 18th August, 1937, and the supplemental Trust Deed of the 30the October, 1939, is exempt from taxation by reason of Section 4 (3) (i) of the income tax Act "

The applicant is the Mercantile Bank of India (Agency), Limited, which is the trustee of the Sir David Yule Trust Fund. The respondent is the Commissioner of income tax, Bengal.

The late David Yule was a man of very great business interests in Bengal for many year, and amongst the positions he occupied was Chairman of the Andrew Yule & Co., Ltd., a company which managed and controlled many subsidiary concerns. During his lifetime he founded the Calcutta Discount Company, Ltd, He died on 3rd July, 1928, leaving surviving him his widow, Dame Annie Henriett Yule, and his only child Miss Gladys Meryl Yule. Lady Yule and Miss Yule were interested in perpetuating the memory of the late Sir David by creating a fund called the "Sir David Yule Fund" for the benefit of persons who had been and are connected with Andrew Yule & Com., Ltd., and its subsidiary concerns, and for that purpose they transferred to the Calcutta Discount Company, Limited, a sum of rupees five lacs which was to form the fund.

On 18th August, 1937, a trust deed was executed, the settlers being the Calcutta Discount Company, Limited, of the first part, Andrew Yule and Company, Limited, being the parties of the second part and the Mercantile Bank of India (Agency), Limited, called trustees, being the party of the third part.

In the recitals of the deed it is stated that it was desired to perpetuate the memory of the late Sir David Yule by the certain of a fund and then the deed goes on :

"and that the income of the fund should be applied for the benefit of any of the past, present and future officers, members of the staff and other employees of Andrew Yule & Co., Ltd., or of any Company within the management of Amdrew Yule & Co., Ltd., except Calcutta Discount Co., Ltd., and their dependents of whatever race or class who in the uncontrolled discretion of the Administrators hereinafter referred to shall be deserving consideration or help more especially on account of indigence, ill-health or other necessitous circumstances on their retirement."

The recitals further provided :

"It has been agreed that the income of Sir David Yule Fund shall be administered by a committee consisting of the Chairman for the time being and my one or more of the Deputy Chairman for the time being of Andrew Yule & Co., Ltd., and /or such other Director of that company as the Board of Directors of the time being may from time to time appoint (with power to remove and to appoint in place of the person so removed) and such appointed Chairman, Deputy Chairman and/or Directors for the time being of Andrew Yule & Co., Ltd., are hereinafter referred to as the administrators."

then the deed goes on to provide :

" The trustees shall hold the investments mentioned in the schedule, during the life-time of the last survivor of the lineal descendants now living of his Late Majesty King George V or for the period of twenty years calculated from the date of this deed whichever shall be the less."

There are provisions with regard to investment which need not be mentioned here.

The goes on :

"The trustees shall during the said period pay the income of the fund or so much thereof as the Administrators shall require to the Administrators for distribution in manner hereinafter provided".

There is a provision that if the income is not sufficient to meet the demands of the administrators the trustees may realise so much of the capital as may be necessary to meet those demands and pay it to the administrators.

Clause (4) provides :

"The administrators shall apply the income of the fund and other moneys when paid to them by the trustees for the benefit of such of the past, present and future officers, members of the staff and other employees of Andrew Yule Co., Ltd., or any branches thereof for the time being and their dependents and/or for the benefit of the like of any company within the management of Andrew Yule & Co., Ltd., exempting always Calcutta Discount Co., Ltd., as the administrators from time to time and in their uncontrolled and unfettered desecration may consider to be worthy of consideration or help in such manner as the administrators in such discretion as foresaid think fit and particularly in providing pensions or assistance generally to argument pensions or allowances for or to such persons or making donations or payments (whether annual for otherwise) to them."

In Clause (6) there is a provision that Andrew Yule &Co., Ltd., may at any time during the period of the trust with the written approval of the trustees or of Lady Yule or Miss Yule alter or modify all or any of the provisions of the deed.

There ar provisions with regard to the fund in the vent of Andrew Yule & Co., being wound up.

Clause (8) provides :

"At the expiration of the said period of the trust, the trust constituted by this deed shall be determined, the trustees shall make provision for the continued payment in whole or in part of any pensions or allowances or other benefit or benefits which have been granted by the administrators to such extent as the fund will admit".

Then there is a provision for the "transfer of the balance of the investments then constituting the fund and any unapplied income thereof to Andrew Yule & Co., Ltd., of as they shall direct and such investments and unapplied income shall thenceforth be absolutely freed and discharged from all the trusts, powers, provisions and discretions of this deed. Lady Yule and Miss Yule have expressed the hope that upon such transfer of the balance of the investment the fund to Andrew Yule & Co., Ltd., or their successors they, Andrew Yule & Co., Ltd., or their successors will use the balance of such investments and the resulting income thereof for purpose similar to those for which the fund was created {".

On 30the October, 1939, a supplemental trust deed was executed between the same parties as before with the consent of Lady Yule and Miss Yule with a view to a modification in the principal deed. The supplemental deed recited :

"Whereas with a view to effectuate such desire it has been agreed by and between the parties hereto that the principal deed should be modified in respect of its objects and also in respect of the disposal of accumulations of income in the manner hereinafter appearing and whereas the fund at present consists of and is represented by the indvestments mentioned in the schedule hereto, now this deed witnesseth and it is hereby agreed and declared by and between the parties hereto as follows :

1. Without in any way derogating from the powers and discretion vested in the administrators which except where otherwise provided in the principal deed shall be and shall continue to be uncontrolled and unfetterd, it is hereby declared that in view of the fact that the object of the principal deed it to relieve persons suffering from indigence, ill-health or other specially necessitous circumstances, the administrators shall, whenever deciding to whom any donation, payment, pensions or allowance shall be made out of the fund or the income or any part thereof pay more regard to the indigence or ill-health or other specially necessitous circumstances of the person or persons whose cases are being considered rather than to the length of service with or the services rendered to Andrew Yule & Co., Ltd., and/or of any company within the management of Andrew Yule & Co., Ltd., by any such person or persons or by any one on whom such persons or persons may be dependent."

Clause (2) provides :

"Not withstanding anything to the contrary contained in the principal deed it is hereby declared that the income of the fund which is being accumulate or to be accumulated in accordance with the provisions of clause 5 of the principal deed must eventually be applied in accordance with the provisions of clause 4 or 7 of the principal deed."

The fund consists of five thousand 4 1/2 per cent. cumulative preference shares of Rs. 100 each fully paid of Andrew Yule and Co., Ltd. The income from it is Rs. 22,000 per annum. It is contended by the trustees that that income is exempt from the payment of income tax by reason of the provision of Section 4 (3) (i) of the income tax Act which enacts the "income falling within the following classes shall not be included in the total income of the person receiving it, i.e., (i) any income derived from property held under trust or other legal obligation wholly for religious or charitable purposes." There is an explanation to that sub-section which provides that "in this sub-section charitable purpose includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility........

The contention put forward by the trustees is that this income is held under trust wholly for "charitable purposes" according to the provisions of the two deeds which have been dealt with above.

The two deeds give a discretion to the administrators to apply the fund- to use the words of clause (4)-"for the benefit of such of the past, present and future officers, members of the staff and other employees of Andrew Yule and Co., Ltd., etc., and their dependents............ as the administrators in their uncontrolled and unfettered discretion may consider to be worthy of consideration or help in such manner as the administrators in such discretion as aforesaid think fit and particularly in providing pensions or assistance."

The supplemental deed is a short but interesting document since whilst reserving the discretion and powers of the administrators under the original deed, it recites that the object in the principal deed is to relieve persons suffering from indigence, ill-health or other specially necessitous circumstances. If it stoped there, there might be grounds for saying that the only matters that the administrators should have regard to in giving relief to persons should be their indigence, ill-health or other specially necessitous circumstances. But the deed goes on to say that the administrator shall in making their decision "pay more regard to the indigence or ill-health or other specially necessitous circumstances of the person or persons whose cases are being consider rather than to the length of service with or the service rendered to Andrew Yule and Co., Ltd., and /or any company within the management of Andrew Yule and Co., Ltd."

The administrators in alloting bounty under this fund may decide to relieve persons suffering from indigence, ill-health or other specially necessitous circumstances, but as I read the two deed together, it seems to me that the administrators may at the same time also reward persons in respect of their service to Andrew Yule and Co., Ltd. I do not read the second deed as precluding them from doing the latter. This construction of the second deed would be in keeping with the recitals in the first deed which enable the administrator to allot the bounty to those "deserving of consideration or help." It may be that the administrator of this fund will administrate it to relieve persons suffering from indigence, ill-health or other necessitous circumstances or it may be that they will give some bounty to past and present servants of Andrew Yule Co., Ltd., etc., whom they think worthy of consideration or help, having regard to the service such persons have rendered to Andrew Yule Co., Ltd., etc. In the latter event the trust is clearly not a trust which is wholly of charitable purposes.

That might be enough to dispose of the question which is asked. But the appellants have argued that not only do the provision of the second deed compel the administrators to use the fund to relieve the persons suffering from indigence, ill-health or other specially necessitous circumstances and no other, but that those circumstances in themselves constitute a trust of charitable purposes.

It will be noticed that the explanation to sub-section 4 (3) of the Act provides that "charitable purpose includes relief of the poor, education, medical relief, and the advancment of any other object of general public utility." But that definition of "charitable purpose" is obviously not conclusive. The words "charitable purpose" must be contoured in their ordinary legal meaning. Their ordinary legal meaning was discussed in In re Foveaux : Cross v. London Anti-Vivisection Society (1895) 2 Ch. 501. In that case Chitty, J., said at page 504.

"Cases arise, such as the present, in which it is not easy to ascertain whether a particular institution is or is not a charity. Charity in law is a highly technical term. The method employed by the Court is to consider the enumaration of charities in the Statute of Elizabeth, bearing in mind that the enumaration is not exhaustive. Institutions whose object are analogous to those mentioned in the statute are admitted to be charitable; and, again, institutions which are analouges to those already admitted by reported decisions are held to be charities. The pursuit of these analogies obviously requires caution and circumspection. After all, the best that can be done is to consider each case as it arises, upon its own special circumstances. To be a charity there must be some public purpose-something tending to the benefit of the community. The benefit in point of local area need not extend to the public at large; a trust for the benefit of the inhabitants of a particular district will suffice. In Commissioner for Special Purpose of income tax v. Pemsel (1891) A. C. 531, at p. 583., Lord Macnaghten said that charity, in its legal sense, comprises four principal divisions-trust for the relief of poverty; trusts for the advancment of education; trust for the advancement of religion; and trust for other purposes beneficial to the community not falling under any of the preceding heads."

The first question is-does the trust in question amount to a charitable trust within Lord Macnaghtens description It clearly is not a trust for the advancement of education; clearly it is not a trust for the advancement for the religion. It was contend that it is a trust for the relief of poverty. It was not contended that it is a trust "for other purposes beneficial to the community not falling under any of the preceding heads."

Examining the provisions of the second trust deed, it might be said that relieving a person suffering from indigence was relieving him from poverty. It might be said that reveling a person from ill-health under certain circumstances might be relieving him from poverty or the likelihood of it. But it is very doubtful whether to relieve a person from "some other specially necessitous circumstances" can be said to be relieving him from poverty.

Andrew Yule & Co., Ltd., and their subsidiary concerns employ a large number of persons. This trust is for the benefit of the past, present and the future officers, members of the staff and other employees of those concerns. Any one from the Secretary or some other highly paid member of the staff down to the lowest menial may be included within the benefit of this fund. Necessitous circumstances might include the case of a superior employee earning some thousand of rupees per month, who owing to some misfortune-say the burning down of his house, or the loss of his property-might find himself suddenly in necessitous circumstances, and in need of money to replace his lost property. I can see no reasons why the administrator of the fund should not be in a position to make a grant to such a person to make up his loss. It might be a most desirable thing to do and the administrator might justly think that they had used some of the funds to the best advantage. But such use cannot be said to be for the relief of poverty. In my view even if (as has been argued) the administrators are bound to use this fund solely "to relieve persons suffering from indigence, ill-health or other necessitous circumstances, " it is immpossible to say that the fund is-to use the words of the section-"property held in trust wholly for charitable purposes."

There seems to be one other objection to this fund being described as for charitable purposes. It is fund which clearly was for the benefit of the employees of Andrew Yule and Co., Ltd, and their subsidiary concerns.

Chitty, J., pointed out in In re Fovesux (1895) 2 Ch. 501. that "to be a charity there must be some public purposes-something tending to the benefit of the community". In Pemsels case (1891) A. C. 531., Lord Macnaghten, before he gave his description of charitable trusts, said at p. 580.

"The court of Chancery has always regarded with peculiar favour those trusts of a public nature which according to the doctrine of the Court derived from the piety of early times are considered to be charitable."

Mr. Isaacs who has argued this matter strenously on behalf of the appellate has contend that it is not necessary in the case of the charitable trust that there should be some public purpose, something tending to the benefit of the community. He has cited and relied on the case of In re Gosling (1900) 48 W. R. 300. In that case the member of the banking partnership by his will bequeathed money to form a fund called the "suprannuation fund" for the purpose of pensioning off the old and worn-out clerks of his firm. Byrne, J., held that was a good charitable gift and consequently that it was for a charitable purpose. Of course in that case the benefit was not for the public or any large part thereof; it was just for the old and worn-out clerks of this particular firm.

A later case in In re Drummond (1914) 2 Ch. 90. where a testator bequeathed shares in a company which owned a mill with which he was connected to his trustees to pay the income from those shares to the directors of the mill for purpose of contribution to the holiday expenses of the work people in the spinning department. The money was to be used in such a way as a directors in their discretion thought fit. They were between four hundred and five hundred girls or women employed in the spinning department on wages of 15s. a week, together with about a dozen men on wages of about 37s. a week. It was contended that it was a trust for the relief of poverty. Eve, J., rejected that contention. It was then contended that that was a gift for general public purposes. Eve, J., held that that was not so. He said that this was not a trust for general public purposes; it was a trust for private individuals, a fluctuating body of private individuals it is true, but still private individuals, and that being so, it was outside the line of authorities cited in support of the connection, and not being for public purposes it was not charitable.

There is also a Privy Council case Verge v. Some rville (1924) A. C. 496 The question was whether a bequest to the trustees for the benefit of New South Wales soldiers returned from the war was a valid charitable bequest. Lord Wrenbury who delivered the judgment of the Board said :

"To ascertain whether a gift constitutes a valid charitable trust so as to escape being void on the ground of perpetuity, a fist inquiry must be whether it is public-whether it is for the benefit of the community or of an appreciably important class of the community. The inhabitants of a parish or town or any particular class of such inhabitants, many for instance, be the objects of such a gift, but private individuals, or a fluctuating body of private individuals, cannot."

In my view if the words of this trust were to be construed so as to mean the relief to poverty and nothing else, such poverty must, if it is to come within the beneficial provisions of Section 4 (3) of the income tax Act, be the poverty of some well-defined section of the community and not of a fluctuating body of private individuals such as are the present and future offices and members of the staff and other employee of Andrew Yule and Co., Ltd., or their subsidiary concerns.

In my opinion the income of this fund is not exempt from the payment of income tax u/s 4 (3) of the Act.

The answer to the question which has been asked is "No."

No. order is made as to costs in this reference.

GENTLE, J.-I agree that the answer to the reference should be in the negative. I desire only to add a few observations.

In the recital to the principal deed of trust, dated 18th August 1937, it is stated that the income from the fund should be applied for the benefit of any past, present and future officers, members of the staff and other employee of Andrew Yule and Co., Ltd. and their associated companies who in the uncontrolled discretion of the administrators should be deserving of consideration or help more especially on account of indigence, ill-health or other necessitous circumstances on their retirement.

The next recital provides that the settlors were transferring to the trustees the investments specified to be called the "Sir David Yule Fund" to the intent that it might be help upon the trust thereinafter expressed. The trust thereinafter expressed are contained in clause (4) which provides that the administrator should apply the income of the fund for the benefit of such of the past, present and future officers, members of the staff and other employee of Andrew Yule Co., and associated companies as in their uncontrolled and unfettered discretion might consider to be worthy of consideration or help in such manner as the administrators in such discretion as aforesaid think fit and particularly in providing pensions or assistance.

Looking at the provisions of clause (4), it is manifest that the administrators had the widest possible powers and could exercise their control and discretion in the way they thought fir and proper in the interest of officers, members of the staff and employee of the companies. This would include the detectors and the secretaries of the company.

Even conceding that the powers and the distribution of the money received by the administrators are controlled by the provisions of the recital appearing earlier in the deed, even then the administrators were to distribute the income of the fund in their uncontrolled discretion to those who should be deserving of consideration or help especially on account of indigence, ill-health or other necessitous circumstances. The administrators, in my view, were not bound even according to the provision in the recital to distribute the fund to those who were indigent or suffering from ill-health or were encountering adverse circumstances. They could distribute it to persons they thought deserving of consideration, which might well be be because of the length or the value of their past services to the company. It is quite clear that the latter two grounds in no way could amount to charity.

Then coming to the supplemental deed of 30th October, 1939, of which the draftsmanship has doubtless been the subject of careful and close consideration, in clause (1) it is provided that without in any way derogating from the powers and discretion vested in the administrator which should continue to be uncontrolled and unfettered,

"it is hereby declared that, in view of the fact that the object of the principal deed is to relive persons suffering from indigence, ill-healthier other specially necessitous circumstances, the administrators shall whenever deciding to whom any donation, payment, pensions or allowance shall b made out of the fund or the income or any part thereof pay more regard to the indigence or ill-health or other specially necessitous circumstances of the persons or persons whose cases are being considered rather than to the length of service with or services rendered to the company."

This clause, as it might give the impression at first sight, does not declare that the object of the fund is to relieve person suffering from indigence, ill-health or necessities circumstances. What the clause does is this :-It purports to recite or repeat what the principal deed provides as being the object of the fund and the words in clause (1) of the supplemental deed, "in view of the fact that the object of the principal deed is to relieve persons suffering from indigence, ill-health, or other necessitous circumstances", have no governance or control over any of the words or expression in the clause itself. It is not, according to this clause, incumbent upon the administrators to make grants to those persons who are suffering from poverty, (using it in the sense covered by the various expressions in that clause), but to pay more regard to poverty rather than to the length or value of the services of those to whom a grant is being considered.

In my view, that does not prevent the administrators from making a grant to persons for long or faithful service with the companies, whom the administrators consider deserving of recognition, from this fund although of course in doing so they must pay more regard to poverty rather than to service or the length of service.

It has not been contended by Mr. Isaacs, who very abley raised every argument possible on behalf of the assessees. that if grants could be made from the fund in respect of the length or value of the services to the companies, such grants would in any sense be charitable. In my view the fund which was created by the trust deed of 18th August, 1937, was not a charity as it is understood in legal phraseology.

In Tudor on Charities, 5th End., at page 11, the following appears : "In the first place it may be laid down as a universal rule that the law reconginses no purpose as charitable unless it is of public character." Direct support fro those words is be found in two authorities. In In re Foveaux (1895) 2 Ch. 501, chitty J., at page 504 says this :

"To be a charity there must be some public purpose-something tending to the benefit of the community."

In Verge v. Somerville (1924) A. C. 496. Lord Wrenbury who delivered the opinion of the Board said this at page 499 :

"To ascertain whether a gift constitutes a valid charitable trust so as to escape being void on the ground of perpectuity, a first inquiry must be whether it is public-whether it is for the benefit of the community or of an appreciably important class of the community."

It was held in In re Foveaux (1985) 2 Ch. 501. mentioned above that the fund devoted to the suppression and abolition of vivisection was a public charity. A similar conclusion was arrived at in Verge v. Somerville (1934) A. C. 496 in respect of a fund for the benefit of returned Australiab soldiers from one of the States in the Dominion.

In In re Drummond (1914) 2 Ch. 90. a holiday fund for the benefit of the employees of a factory was held not to be a charity and a similar conclusion was arrived in Trustees of Wernhers Charitable Trust v. Commissioner of Inland Revenue (1938) 21 Tax Cas 137: 6 I. T. R. 701 in respect of a recreation ground for the employees of a public limited liability company.

Mr. Isaacs contended that when the object of he fund is to relive poverty, then the question of public benefit does not arise. The only support for that proposition is to be found In re Gosling (1900) 48 W. R. 300 in which the creation of a fund for the benefit of the old and worn-out clerks of banking institution was held to be a charity.

In my view the line of cases including Verge v. Somervill (1934) 4 A. C. 496 in the Judicial Committee is to be preferred to In re Gosling (1900) 48 W. R. 300 and should be followed. Consequently if there is a fund created for the relief or poverty-I am assuming at the moment that the fund in question is for the relief of poverty-it must be for the benefit of the public or a specified section of it. Private individuals including the employees of a firm are not part of the general public ot of any section of the public.

For these reasons in my view the answer which should be given to the Reference should be in the negative.

Reference answered in the negative.

APPENDIX

JUDGMENT OF APPELLATE TRIBUNAL AND STATEMENT OF CASE.

Under Section 33 of the Indian income tax Act (XI of 1922) the income tax Appellate Tribunal, Calcutta Bench (consisting of RAM PRASAD VARMA, Judicial Member, and P. N. S. AIYAR, Accountant Member), delivered the following Judgment on 21st August 1941 and on the application of the assessee referred the case to the High Court :-

"The appeal is directed against the order of the Appellate Assistant Commissioner of income tax, Calcutta A Range, dated the 28th February 1941. The income tax Officer, Calcutta District V, whose order on appeal was confirmed, assessed the appellant on an income of Rs. 22,452 for the assessment year 1939-40, the previous year being the calendar year 1938.

The facts of the case my be briefly stated :

2. The late Sir. David Yule, Baronert, of 8, Clive Row, Calcutta, founded the Calcutta Discount Company Ltd., and was closely associated with it up to the time of his death. He was also for many years Chairman of Andrew Yule & CO., Ltd., the said Calcutta Discount Company Ltd., hereinafter referred to as the Settlor, on the 18th of August 1937, by a deed of trust, with the idea of perpetuating the memory of he deceased, set apart s sum of Rs. 5,00,000 to be called "Sir David Yule Fund". The idea of the Settler was that the income of the Fund shall be applied for the benefit of any or all of the past, present, and future officers, members of staff and other employees of Andrew Yule and Co., Ltd., or of any company within the management of Andrew Yule and CO., Ltd., and their dependents of whatever race or class, who, in the uncontrolled discretion of the Administrators shall be considered deserving of any consideration or help, more especially for the indignece, ill-health or other necessitous circumstances on their retirement.

3. The income of the said Fund was to be administered by a Committee herein referred to as administrators consisting of the Chairman for the time being and any one or more of the Deputy Chairman for the time being of Andrew Yule and Co., Ltd., and such other Directors of that Company as the Board of Directors from time to time may appoint. The Mercantile Bank of India (Agency) Ltd., were constituted the trustees by the said Deed hereinafter referred to as the appellant.

4. The appellant claims an exemption from assessment to income tax on the ground that the case is covered by Section 4 (3) (i) and it is contended that the income of the fund is not liable to income tax.

5. The income tax Officer who made the assessment dealt with the matter very briefly and observed :

"As the object of the trust did not fall within the meaning of charity, this contention is rejected." We do no find any reasons advance by the income tax Office as to why he rejected the contention, or what he understood by "charity". This word "charity" is not to be used in its ordinary significance, but its legal technical meaning. This point has been the subject-matter of several decisions. A Full Bench of the Lahore High Court considered the meaning of the words charitable purpose u/s 4 (3) (i) and Mr. Justice Dalip Singh, observes as follows :

"In my opinion, therefore, for purpose of construing the words "religious or charitable purpose"in the income tax Act, in necessary to investigate the meaning of the word in the particular system of jurisprudence that my be followed by the assessee. Such being the case, humbly agreeing with the opinion of Lord Macnaghten and with that of the majority of the judges in the appeal case cited, I hold that it is proper to construe the term with reference to the English law on the point at issue, as the draft was made in English language and by person presumably acquainted with the English law on the point". Under Baksh v. Commissioner of income tax, Punjab (1931) A. I. R. 9131 Lah 578

In Commissioner of Income Tax Vs. Humayun Raza and Another, the same view was expressed. In Pemsels case 53. it was laid down by the House Of Lords what the legal meaning of charity is. We will refer to this case later.

6. Taking the above as the guiding principal for the investigation whether the Trust is or is not constituted for an object which may be called charitable purpose, we have first to see what the object it with which this Trust has been created and the class which it benefits. We can do best b proceeding to examine the Trust Deed and we will quote here paragraphs 4,6 and 15 from the said Trust Deed.

" (4) The administrators shall apply the income of the Fund and other money when paid to them by the Trustees for the benefit of such of the past, present and future officers, members of the staff and other employee of Andrew Yule & Company Ltd., or any branches thereof for the time being and their dependents and or for the benefit of the like of any Company within the management of Andrew Yule & Company Ltd., excepting always Calcutta Discount Company Limited as the Administrators from time to time and in their uncontrolled and unfettered discretion may consider to be worthy of consideration or help in such manner as the Administrators in such discretion as aforesaid think fit and particularly in providing pensions or allowances for or to such persons or making donations or payments (whether anual or otherwise) to them.

(6) Andrew Yule & Company Ltd., may at any time during the said period with the written approval of the Trustees or of Lady Yule or of Gladys Yule and if both Lady Yule and Gladys Meryl Yule shall die within the said period then with the written consent of the Trustees alter or modify all or any of the trusts or provisions in this Deed.

(15) This Deed and the trusts herein contained may be altered and modified with the consent of Andrew Yule and Company Ltd., and the Trustees to such extent and in such respects as may be recommended by lawyers in India to be necessary or desirable to conform with or to avoid difficulty or liability under the law of Indian. Provided that the purposes and person for and for the benefit of whom the income and other moneys of the fund are to be applied in accordance with clause 4 hereof all shall not be latered to any material extent such alterations and modifications shall be embodied in a Deed Supplemental hereto to be executed by Andrew Yule & Co., Ltd., and the Trustee and the consent of Lady Yule and the said Gladys Meryl Yule shall not be required thereto.

7. It will be clear from the above that the administrators were to apply the income of the fund for the benefit of the employees past, present and future of certain companies other than the Settlor, and in such application, they had unfettered and uncontrolled discretion to consider what was worthy of consideration or help particularly providing or augmenting pensions or allowance or making donations or payments. These are very wide powers given to dispose of the Fund in the way they think fit, and they could augment the pensions of persons who perhaps may be getting sufficiently otherwise. The object of relieving the indigence and poverty is certainly a charitable object and it cannot be said in this case that the object is confined only to the relief of poverty of any class of persons. The income of the fund need be necessarily applier to relieve poverty but may be employed to benefit persons who may otherwise be well-off, if, in the discretion of the Trustees, it is considered desirable. We shall deal more with this matter later.

8. The Appellate Assistant Commissioner, who heard the appeal from the order of the income tax Officer, disallowed the appellants prayer for exemption on the ground that he did not consider that the income of the Fund was to be applied to the relief of the poor. He proceeds :_

"Of course, there is a provision in the Deed which says that in giving pension and allowance, consideration should be had to the poverty, to the ill-health and the necessitous circumstances of the retiring employee, but it remains to be proved that up to this time the person who have received benefits from the above Fund, were poor, were sick or necessitous."

9. This matter of the application of the fund is rally a matter for our consideration as we have to consider whether the Settlor intended it to be for charitable purpose whether wholly or in part. We are at present concerned with seeing whether the objects of the Trust are for a charitable purpose so as to attract the provision of Section 4 (3) (i) and to see how far exemption can be allowed.

10. The Appellate Assistant Commissioner then proceeds on the assumption that it may be conceded in favour of the appellant that the pensions and allowance are given in consideration of the poverty, ill-health and necessitous circumstances of the recipient, and then precedes to examine whether this relief to the poor is a charitable purpose within the meaning of the income tax Act. His reason may be summed up in his own words :

"In my opinion, anything to be charitable within the meaning of the income tax Act must first of all be an object of general public charity, so that relief of the poor as used in the Act, means relief of the poor at large and not the poor of any particular institution of firm".

11. Finally relying on Wernhers Charitable Trust v. Commissioners of Inland revenue (1937) 21 Tax Cas. 137: I. T. R. 701 he holds that the Appellate Assistant Commissioner had gone wrong in his exposition of the law and that actually the description of charitable purpose given at the end of Section 4 (3) is merely illustrative and it is imported from what is almost a classical pronouncement of Lord Macnaghten. In the case of Commissioner for Special Purposes of income tax v. Pensel, reported in 3 Tax Cases, page 53, at page 69, the learned Lord observes :-

"Charity in its legal sense comprises four principal divisions : (1) Trust for relief of poverty : (2) Trust for advancement of deduction : (3) Trust for advancement of religion and (4) Trust for other purposes beneficial to the community, not falling under any of the preceding heads."

It is argued that partially the very same main divisions of charitable purpose are imported in Section 4 (3) at its end and for ready comparison we reproduce it below :-

"In this sub-section charitable purpose" includes relief of the poor. education, medical relief, and the advancement of any other object of general public utility, but nothing contained in clause (i), clause (ia) or clause (ii) shall operated to exempt from the provisions of this Act that part of the income of a private religious trust which does not enure for the benefit of the public."

13. In Commissioners of Inland Revenue v. The Society for the Relief of Widows and Orphans of Medical Men (1926) 11 Tax Cas 1 at p. 21 Mr. Justice Rowlatt also laid down that the relief indigence is charitable purpose within the doctrine of the Court of Chancery which governs the matter."Charitable purpose it not limited, as had been pointed out often enough, to the relief of indigence but relief of indigence is a charitable purpose."

14. Case have gone to the length that even kindred who are poor man be provided for by means of a deed of trust, and the case in point, Attorney-General v. Duke of Northumberland (1875) 7 Ch. D. 745. is referred. We have a decision of the Calcutta High Court reported in Manorama Dassi v. Kali Charan Banerjee (1903) 31 Cal. 166, where their Lordships have laid down that a gift if it related to poor relatives, servants and dependents, would be a valid gift and be supported as a charitable bequest. In the case of Gosling (1900) 48 W. R. 300 it has been held that the "gift to form a fund for the purpose of pensioning off old and worn-out clerks of a firm is a good charitable bequest, and the Court will direct a scheme for its administrators". The learned Counsel for the appellant has not sought to bring his case within the forth category mentioned in Section 4 (3) of the income tax Act but has tried to bring it within the first category, viz., relief of poverty.

15. It is argued for the Department that the definition of charitable purpose has been restricted by the closing words of sub-section (3) of Section 4 and it would mean that any other object, including the three objects first mentioned, viz., poor, medical and education relief, must all be intended to benefit the public, the community or some part of it and not merely private individuals. Emphasis is sought to be laid on the use of the word other in any other object in the fourth or the last division. The trust it is contended, is not one for the the public or for a section of the public. It is true that private religious trusts are not to be reconginsed for exemption under the income tax Act if the income does not enure for the benefit of the public, but it cannot be denied, that charitable trusts, whether they be for the benefit or the public at large or for a section of the public, would be still a good charitable trust. We find that the case of In re Gosling, above referred to is not distinguishable from the facts of the case on the point that a good charitable trust can be made in favour of the employees of firm if it is for charitable purpose otherwise. We cannot ignore the importance of it for the purpose of the decision on the case. The learned Appellant Assistant Commissioner had not given consideration to this case on he ground that it is not an income tax case. But, this to our mind, is not a reason which will detract the value of the applicability of the case. We concern with determining the meaning of charitable purpose and if it had been authoritatively laid down for us, we feel we are bound by it.

16. The Appellate Assistant Commissioner as well as the Department Representative before us have relied on the case of Wernhers Charitable Trust v. Inland Revenue Commissioners (19370 21 Tax Cas. 137: 6 I. T. R. 701. This was a case in which a trading company conveyed certain land to be used as a playing field and recreation ground (a) for the benefit of the companys employees and (b) if no longer so required, for the inhabitants of a certain brought. It was decided by the Special Commissioner that the sum in question devoted for the playing filed was not applied to a charitable purpose as it was for the employees of the company. The playing field, in certain circumstances, had been held to be charitable purpose for the reason that it comes within the other objects of public utility and intended to benefit the public at large by benefiting a certain section. For instance, if it is for the benefit of the army, it would be a good charitable purpose. It was held in this case that the employee of a company were in a different position althogether from the school children of a particular locality.

17. The relief of poverty is a separate charitable purpose altogether and where it is intended to relieve poverty, be it for a section of the people or a particular locality or a particular kind of person, vi., invalid, or old, it would be supported on the ground that it some within the first of the four objects defined as charitable purpose. Wernhers case (1937) 21 Tax Cas. 137: 6 I. T. R. 701 came within other purposes beneficial to the community and the benefit has of necessity to be for the general public and it is therefore distinguishable. It is not necessary that the charity should benefit only the poor and not the others. In In re Macduff(1896 2 Ch. 451 Lord Lindley observed :-

"I am quite a aware that a trust may be charitable though not confined to the poor, but I doubt very much that a trust would be charitable which excluded the poor."

18. While respectfully following the exposition of the law in the Goslings case ((900) 48 W. R. 300. we find that though the trust in the case before us is in favour of certain members of the staff of some allied companies, it is not for a "charitable purpose". The object in this case is not to relieve indigence or ill-health solely but also other necessities circumstances like augementing pension of some of the employees or making payments or donations to them. Any such payment to relieve necessitous circumstance cannot be said to be made for the relief of poverty or for affording medical relief which too only out of the object of this Trust or within the scope of "charitable purpose." Further the payment is left to the uncontrolled discretion of the administrators. We feel therefore, that we cannot hold that the income of this trust is wholly applicable for charitable purposes. The word wholly means solely and not partly as held in AIR 1928 10 (Nagpur) . which was affirmed by the Privy Council in Mohammal Ibrahim Raza Malak v. Commissioner of income tax (1930) I. A. R. P. C. 226

19. In view of the fact that under the trust deed no specific or definite part of the income is set apart or definitely and necessarily applicable to any of the two purpose above mentioned within the category of charitable purpose it cannot be said that any part of the income is held for such "charitable purposes."

20. In COMMISSIONER OF Income Tax, MADRAS Vs. M JAMAL MOHAMAD SAHIB., it has been laid down by Lordship the Chief Justice of the Madras High Court, that the charitable purpose must be contoured strictly and can only be applied to a publics charity.

21. It may be pointed out that in the previous year also the appellant raised the question of claiming exemption on this income on the ground of its being applicable to charitable purposes. The contention of the appellant was overruled by the income tax Officer and by the Appellate Assistant Commissioner and the matter was not taken up further for an authoritative decision by the High Court.

22. We feel that the purpose "relief of necessitous circumstances" may be benevolent but is not such as to come within the purview of charitable purposes only. Necessitous circumstances in the permissible wide discretion of the administrators may include the building of a house destroyed by flood, fire or bomb or it may include the marriage or any ceremony in the family of a members of the staff. All such purpose may be benevolent or necessitous but not charitable. The latest case reported in Re. Diplock, Wintle v. Dliplock (1941) 1 All E. R. 193. is a case in which the testator gave by his will &5,000 to his executors, certain sums to named charities and the residue of his estate or trust for such charitable institution or institutions or other charitable or benevolent object or obejects as his executors might in their absolute discretion select. The person entitled on an intestacy contended that the words or benevolent might embrace object not strictly charitable and that this bequest was, therefore, void for uncertainty and failed.

It was held that this was void for uncertainty.

23. In the case before us the income from the Sir David Yule Fund and other money were to be applied by the Administrators in their uncontrolled discretion for the benefit of the officers and members of the the Administrators are not required to apply to any charitable purpose. The powers are very wide and help given may be benevolent but need not be within the charitable purposes as recognised by law. It cannot be said therefore that the income of the Trust is to be applied for charitable purpose; see Mohammad Ibrahim Raza Malak v. Commissioner of income tax, Nagpur (1930) A. I. R. 1930 P. C. 226; 57 I. A. 260.

24. The predominate motive is not only to relieve poverty or afford medical relief but also to benefit body of persons who were in service in certain companies and at the discretion of certain other persons. When the Administrators are given such wide powers and when some of the purpose are not clearly charitable purpose the provisions of Section 4 (3) (i) are not attracted to the income of such a trust. See Probynabad Stud Farm v. Commissioner of income tax. Punjab (1935) 8 I. T. C. 439: 4 I. T. C. 114. The exemption has not anything to do with casual charity or any income which is not required to b spent in charity wholly. For those reasons we hold that the trust is not wholly for charitable purpose within the meaning of Section 4 (3) of the income tax Act. No other point is argued.

25. In the view we have taken we think that the appeal ought to be dismissed and the tax was rightly levied."

STATEMENT OF CASE.

On the application of the assessee u/s 66 (1) of the Indian income tax Act (XI of 1922), the Appellate Tribunal referred the following question to the Calcutta High Court :

"Whether the income derived by the applicant from the property held by the applicant under the Trust Deed of the 18th August, 1937, and the supplemental Trust Deed of the 30th October, 1939, is exempt from taxation by reason of Section 4 (3) (i) of the income tax Act "

The facts of the case and the opinion of the Appellate Tribunal appear fully in the judgment of the Appellate Tribunal printed at page 524, supra.