HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
The Trustees of the Charity Fund, Esplanade Road, Fort, Bombay v. Commissioner of Income-tax, Bombay
Civil Appeal No. 396 of 1957
[1959] Supp. (2) SCR 923 ·
Indian Income-tax Act, 1922, section 4(3)(i)
Sources & disclosures includedDownload original judgment / order
3-judge bench · S. R. Das · N. H. Bhagwati · M. Hidayatullah
Assessment years: 1948–49, 1949–50, 1950–51, 1951–52, 1952–53
01 · Facts of the case
Sir Sassoon David charity trustees claimed exemption after tax authorities refused renewed securities exemption certificate. The deed listed public charitable objects but directed preference for poor founder relatives and expenditure of at least half on Bombay Jewish beneficiaries and objects.
Source: Primary report: SCR 925–929
02 · Discussion by the Hon’ble Court
The primary eligible class and subsequent selection preference were distinguished. Founder relatives were not direct objects under most clauses; under poverty relief they qualified within the public class. A preference did not convert the primary charitable trust into a family trust. Gordhandas was distinguished; Koettgen applied.
Source: Primary report: SCR 929–935
03 · Judicial decision
Property was held wholly for charitable purposes and income exempt under historical section 4(3)(i).
Source: Primary report: SCR 935
04 · Outcome / in whose favour
Appeal allowed; first reference question answered affirmatively, second unnecessary; trustees awarded High Court reference and Supreme Court appeal costs. Earlier reopening assessments were already set aside and outside this appeal.
Source: Primary report: SCR 928, 935
05 · AKHB REVIEW POINT
Read the deed as a whole and distinguish primary beneficiaries from preferences. This historical decision does not establish compliance with later restrictions under the 1961 Act.
Source: Primary report: SCR 932–935
Source & verification
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Statutory scope
Historical legislation expressly identified in this note. This is not a decision under the Income-tax Act, 1961 or the Income-tax Act, 2025. Verify enacted wording, commencement, transition and subsequent judicial treatment independently before modern reliance.
Later treatment
Source checked 2026-10-23. Subsequent treatment and present-law applicability have not been comprehensively checked.
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General legal and tax research only; not legal or tax advice. Verify the complete judgment, applicable statutory version and subsequent treatment before reliance. AKHB REVIEW POINT is editorial analysis, not the Court’s holding.