Jewish National Fund Statement on Its Income Tax Case: Decision Depends on Construction of Old Law D

The Jewish National Fund publishes to-day the following statement with reference to the decision of the House of Lords yesterday in its income tax appeal:

The judgment of the House of Lords confirms the decision of previous courts not to grant to the Keren Kayemeth le Israel exemption from income tax on income from securities worth £32,000 for the years 1922-1925. The House of Lords held that the Keren Kayemeth was not entitled to this exemption, not being an association established for charitable purposes only within the meaning of the Income Tax Law.

It was this latter question which led the Keren Kayemeth, acting on the advice of eminent lawyers, to seek the decision of the highest legal tribunal of the land. Like similar public institutions in England, the Keren Kayemeth considered it important to secure recognition as a charitable trust and to enjoy the privileges accorded in many respects to such bodies. This legal recognition depends on the construction of an old law-dating as far back as 1601-and a large number of technical, judicial decisions and expert opinion was divided on the question whether the Keren Kayemeth, which in Palestine is recognised by the Government as an institution of public utillty, was by virtue of its constitution a charity within the meaning also of the English Income Tax Law. In the opinion of the Keren Kayemeth’s legal advisers, each of the four grounds which, in law, can constitute the basis of a charity, namely, relief of poverty, promotion of religion, advancement of education, and purposes generally beneficial to the community, was applicable to the Keren Kayemeth and justified its recognition as a charity. As this claim was resisted by the income tax authorities, the Keren Kayemeth was advised to have the matter decided by the courts.

The adverse decision of the House of Lords does not imply any criticism of the aims or the work of the Keren Kayemeth, but only means that the present wording of its Memorandum and Articles of Association does not justify its recognition as an Association established for charitable purposes only. This question having been cleared up by the decision, it may be necessary to adjust the Memorandum and Articles to the formal requirements of the law as interpreted by the judgment of the Court.

Proposals to this end have been considered by a committee appointed by the Keren Kayemeth some time ago, and as soon as this work, which is being carried out in co-operation with competent legal advisers in London, is completed, steps will be taken in concurrence with the proper authorities of the Keren Kayemeth, to obtain, in accordance with the law and the decision of the Court, recognition of the Keren Kayemeth Le Israel as a charity enjoying the legal status accorded to such bodies under English law.