Judgment :- SRINIVASAN J. The question referred under section 66(1) of the Act for the decision of this court is " whether the provisions of section 41 can be said to apply to the assessee in this case. " The assessments relate to the assessment years 1953-54 and 1954-55. The assessee is the managing trustees of Nagore Durgah. In order to appreciate the contention that has been raised, it is necessary to set out in brief the status of the trustees of Nagore Durgah. This Durgah situated in Tanjore District is of considerable historical and religious importance. A Muslim saint is entombed here. This Durgah has been endowed with large extents of properties. From these immoveable properties considerable income is derived, and " hundial " offerings are also made by the devotees. The Durgah is managed by a body of trustees called the nattamaigars. After application of the income for the purposes of the Durgah surplus is available, which, according to long usage, is divided into 640 shares among the descendants of Yusuf, the foster son of the saint. These beneficiaries go by the name of kasupangudars. It is common ground that there is no document of trust. The nattamaigars are hereditary trustees and the right of kasupangudars to the surplus has been recognised both by custom and by judicial decisions The history of this trust is set out in some detail in the decision in the Trustees, Nagore Durgah v. Commissioner of Income-tax. Reference will be made to this decision in due course Up to and including the assessment year 1952-53, the surplus income of the Durgah was assessed in the hands of the trustees of the Durgah as an " association of persons ". In the case of the assessment proceedings for the years now in question, it was claimed before the department that the assessment should be made under section 41 of the Act. It was urged that the managing trustees of the Durgah managed the properties on behalf of the kasupangudars under the orders of court. This contention was not accepted partly for the reason that the estate vests in the trustees and also that even if managers have been appointed by the court, it was on terms agreed between parties. It was urged that the managing trustees of the Durgah managed the properties on behalf of the kasupangudars under the orders of court. This contention was not accepted partly for the reason that the estate vests in the trustees and also that even if managers have been appointed by the court, it was on terms agreed between parties. Rejecting the claim that section 41 applied to the facts of the case, the Income-tax Officer assessed the assessee as an " association of persons ". The appeals to the Appellate Assistant Commissioner and to the Tribunal failed, and on the application of the assessee, the question set out above was referred to this courtThe Trustees, Nagore Durgah v. Commissioner of Income-tax was decided in relation to the assessment year 1944-45. The question of the applicability of section 41 of the Act was pressed at the stage of the reference, but the learned judges came to the conclusion, that that question did not arise out of the order of the Tribunal. It was also pointed out that the counsel for the assessee had in the proceedings before the departmental officers and the Tribunal conceded that section 41 in terms had no application. The question was, therefore, not one which was raised and debated and considered by the Appellate Tribunal and it was accordingly held that the applicability of section 41 was not a question of law arising out of the order of the Tribunal. The question was not further pursued in that case. On the facts it was decided that the assessment as an association of persons was correct Chapter V of the Income-tax Act deals with the liability to tax in special cases. Section 40 deals with the cases of assessees, who are either minors, lunatics or idiots and provides that when the guardian or trustee of any such person is entitled to receive, or is in receipt on behalf of such person any income, profits or gains, the tax shall be levied upon or recoverable from such guardian or trustee in like manner and to the same extent as it would be leviable upon and recoverable from the beneficiary. Section 40(2) provides for a case where a person not being a minor, lunatic or idiot, is not resident in the taxable territories, but on whose behalf income, profits or gains are received by a trustee or agent. Section 40(2) provides for a case where a person not being a minor, lunatic or idiot, is not resident in the taxable territories, but on whose behalf income, profits or gains are received by a trustee or agent. Section 41 deals with the case of properties of assessees managed in a particular manner by other persons. This section provides that where income, profits or gains are so received on behalf of another by the Court of Wards, the Administrator-General, the Official Trustee or any receiver or manager appointed by or under any order of court, or any trustee, or trustees appointed under a trust declared by a duly executed instrument in writing, whether, testamentary or otherwise, the tax shall be levied upon, and be recoverable from such Court of Wards, Administrator-General, etc. Sub-section (2) of section 41 further provides that " Nothing contained in sub-section (1) shall prevent either the direct assessment of the person on whose behalf income, profits or gains therein referred to are receivable, or the recovery from such person of the tax payable in respect of such income, profits or gains. " * It has been mentioned that there is a body of trustees known as nattamaigars, eight in number, who are entitled to manage the trust. According to the scheme that was framed as the result of a scheme suit, the management and administration of the affairs of the Nagore Durgah was vested hereditarily in the eight trustees or nattamaigars of the Durgah. This body constituted the board of trustees, each trustee being entitled to hold office for life and after him the trusteeship was to devolve on his next male heir in accordance with the prevalent custom. In the scheme, as it was originally framed, there was provision for the election of one among the trustees as the managing trustee. Clause (4) of the scheme set out as annexure "A" to the statement of the case reads " The board of trustees shall from amongst themselves elect one as a managing trustee and he shall hold office for a term of three years. Clause (4) of the scheme set out as annexure "A" to the statement of the case reads " The board of trustees shall from amongst themselves elect one as a managing trustee and he shall hold office for a term of three years. " There was a variation of this clause in the decree as framed in A. S. No. 354 of 1923 on the file of the High Court, clause 17 of which provided " The trustees are at liberty to appoint one or two of them as the managing trustee for a period not exceeding five years. " The principal contention that was advanced on behalf of the assessee was that the appointment or election of the managing trustees in the present case was in pursuance of this clause of the decree. That being so, this is properly a case, so it was claimed, where it can be said that this appointment has been made under the order of court. Before proceeding to construe this clause and deciding whether this provision would bring the matter within the scope of section 41 of the Act, reference may also be made to certain other clauses of the scheme, which set out the functions of the board of trustees and the managing trustee in particular. Under clause 43 of the scheme, the managing trustee is entitled to receive all gifts intended for the Durgah. He has to keep a regular account of them. Clause 44 of the scheme as finally settled providesThe managing trustee shall at the end of each fasli, prepare a balance sheet verified by the manager and ascertain the net amount available for payment to kasupangudars. The managing trustee shall declare the amount due for each kasupangu and the declaration shall be made with the customary fatea between the 1st and 7th of July every year. After the amount due for each kasupangu has been ascertained, the managing trustee shall allocate the amount due to each kasupangudar in the list to be prepared for that purpose each year. The name of the kasupangudars entitled to receive payment shall be entered in the Tamil alphabetical order in that list. After the amount due for each kasupangu has been ascertained, the managing trustee shall allocate the amount due to each kasupangudar in the list to be prepared for that purpose each year. The name of the kasupangudars entitled to receive payment shall be entered in the Tamil alphabetical order in that list. The manager shall pay the amount due to each kasupangudar in accordance with that list, except in the case of purdanashan ladies who will be paid the amount due to them by money order sent by the manager at their cost. " The plea that the managing trustees in the present case function as managers appointed under orders of court by virtue of the relevant in the scheme was repelled by the department on two grounds " (1) That the relevant clause providing for the appointment of a managing trustee was only permissive in its scope ; and (2) that the body of trustees are the persons in whom the property of the Durgah vests, while, in the case of a manager, the property does not vest in him ". The department relied upon Jainulabdeen Sahib v. Commissioner of Income-tax. In that case, certain persons were appointed as managing agents at the request of parties in respect of a business, which was the subject-matter of a suit and a compromise. In the assessment proceedings the claim was put forward that section 41 applied. The learned judges held that an order passed on the terms agreed upon will still remain an agreement between the parties and not an order within the contemplation of section 41. It seems to us that this decision has no application to the present case. The learned counsel for the respondent does not put forward the plea, nor was it so specifically found either by the departmental officers or the Tribunal that the settlement of the scheme was the result of a compromise between the parties. Under the clauses relating to the appointment or the election of a managing trustee, which have been set out earlier, even assuming that those clauses are permissive in their scope, it is undeniable that when the liberty so granted by the relevant clause is exercised, it has to be related to the power that has been specifically granted by the clause in the scheme. If the body of trustees, without any such provision being made therefor in the scheme, chose to elect one among themselves as the managing trustee, the liability for the management of the trust estate would still be that of the body of trustees alone. But where such a power to elect or appoint a managing trustee is conferred by a scheme framed by court, the position seems to us to be fundamentally different. Here is a case where the order of court authorises the appointment of a managing trustee, and when such an appointment is made, it is obviously referable to the order of the court and must be regarded as having been made under the order of court. Learned counsel for the department urges that there is no specific appointment by the court itself and that, therefore, the relevant part of section 41 will not apply. If his argument is to be accepted, there would appear to be no difference between an appointment made by a court and one made under any order of court. The section itself contemplates different cases--one of a direct appointment by court and another an appointment made in pursuance of a direction given by a court. It should, therefore, follow that where the managing trustees are so appointed in pursuance of a direction or authorisation contained in the scheme, such appointment has necessarily to be regarded as an appointment made under the order of court. The view taken by the officers below that this clause will not apply is incorrectWe have referred earlier to the decision in the Trustees, Nagore Durgah v. Commissioner of Income-tax. There, while rejecting the claim of the assessee that section 41 should be applied on the ground that that question did not arise out of the order of the Tribunal, the learned judges pointed out " We do not know what exactly are the functions of the managing trustee or trustees and it may be a point for consideration whether a managing trustee could aptly be described as a manager or as a person, by whatever designation known, who in fact manages the property. Having regard to the essential difference between a manager and a trustee, viz.that in the former the estate does not vest while in the latter it does, the two are different. It is unnecessary to pursue the matter further in this case. Having regard to the essential difference between a manager and a trustee, viz.that in the former the estate does not vest while in the latter it does, the two are different. It is unnecessary to pursue the matter further in this case. " * Counsel for the department places considerable reliance upon these observations. In so far as the first part of the above extract is concerned, there is material available before us setting out what the functions of the managing trustees are, particularly, in relation to the disposal of the surplus income of which the beneficiaries are the kasupangudars. The learned counsel for the department emphasises that a managing trustee continues to be a trustee and that he cannot be regarded as a manager coming within the scope of section 41. It is common ground that if the managing trustees or the board of trustees are regarded as trustees simply, the benefit of section 41 will not be available to them, as section 41 deals with the case of trustee or trustees appointed under a trust declared by a duly executed instrument in writing, whether testamentary or otherwise. There is no document of trust in this case and this part of the provision cannot accordingly apply to these trustees. The short question then is whether the managing trustee appointed in the circumstances set out can be regarded as " manager (including any person whatever his designation who in fact manages property on behalf of another) appointed by or under any order of a court... " What was held in the Trustees, Nagor Durgah v. Commissioner of Income-tax was that in so far as this Durgah is concerned, it is a public trust, but the surplus is a private trust for the benefit of the kasupangudars. We are concerned only with the surplus, which goes to the benefit of the kasupangudars, and the provisions of the scheme give no room for doubt that the managing trustee is placed in charge of the management of this surplus income on behalf of the kasupangudars, who are entitled to definite fractional shares. The right of the managing trustee in his capacity of a member of the board of trustees of the eight nattamaigars is entirely unrelated to his function as the manager of this surplus income. The right of the managing trustee in his capacity of a member of the board of trustees of the eight nattamaigars is entirely unrelated to his function as the manager of this surplus income. The contention of the learned counsel for the department that notwithstanding his appointment as the managing trustee and the specific allocation of powers and duties in relation to the surplus income, he does not cease to be a trustee and must be regarded only as a trustee, seems to us to be unacceptable. To the extent to which the managing trustee is the manager and manages the property on behalf of the kasupangudars, he would come within the scope of section 41. It may further be pointed out that though the estate of the Durgah might vest in the body of trustees, the surplus income is really owned by the kasupangudarsLearned counsel, for the department also referred to Holdsworth v. State of Uttar Pradesh. That was a case where agricultural land was held by trustees under a will. The will made provision for payment of the income in certain defined shares to certain beneficiaries. But the trustees held the property with powers of absolute owners. It was claimed by the beneficiaries that they should be assessed in accordance with section 11(1) of the U. P. Agricultural Income-tax Act, 1948, which forms a close parallel to section 41 of the Indian Income-tax Act. That section provided that where any person holds land on behalf of persons jointly interested in such land, agricultural income-tax shall be assessed upon such person to the extent of the interest of each of the persons on whose behalf he so held the land. Their Lordships of the Supreme Court in dealing with the case observed that a trustee is the legal owner of the trust property and the property vests in him as such. He may hold the trust property for the benefit of the beneficiaries, but he does not hold it on their behalf. On the facts of the particular case before them their Lordships noticed that the beneficiaries under the trust were not persons who were jointly interested in the land, and section 11(1) of the U. P. Agricultural Income-tax Act did not, therefore, apply. We are unable to derive any assistance from this decision in so far as the present case is concerned. We are unable to derive any assistance from this decision in so far as the present case is concerned. That decision went on specific wording of the provisions of the Agricultural Income-tax Act It seems to us that section 41 applies to the special class of cases where the person in receipt of income is the real assessee ; and in cases where the management of the estate on behalf of another is undertaken by the Court of Wards, Administrator-General, official trustee, receiver or manager appointed by or under order of court, the section clearly indicates the extent of the liability to tax. As we have pointed out, if in a case, which does not fall within the terms of the section, one person manages the property on behalf of another, it is the latter that would be the assessable entity, and the manager if assessed can, both in fact and in law, deny that he is in receipt of any income. Where, however, a person coming within the scope of section 41 manages the property and derives income on behalf of another, the law provides the machinery whereby that income could be assessed, even at source, that is, in the hands of the person managing the property and receiving that income. The extent of the liability of such manager is specifically limited for the reason that such manager might in the generality of cases be in management of different estates on behalf of different persons. In such an event, the law provides that the assessment of the income in relation to each estate should be made to the same extent as upon the person on whose behalf the income is derived. This seems to us to be clearly a case where section 41 applies. Notwithstanding the residual power given to the department to tax the beneficiary under section 41(2), the law contemplates that in a case such as this the assessment shall be made on the manager only to the extent of the interest of the beneficiary in the income received by the managerOn the facts, we answer the question in the affirmative and in favour of the assessee. The assessee will be entitled to his costs. Advocate's fee Rs. 250 Reference answered in the affirmative.