Full Judgment Text
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PETITIONER:
THE OFFICIAL TRUSTEE OF WEST BENGAL FOR THE TRUST OF CHITRA
Vs.
RESPONDENT:
C.I.T WEST BENGAL, CALCUTTA
DATE OF JUDGMENT04/12/1973
BENCH:
ALAGIRISWAMI, A.
BENCH:
ALAGIRISWAMI, A.
RAY, A.N. (CJ)
KHANNA, HANS RAJ
MATHEW, KUTTYIL KURIEN
BHAGWATI, P.N.
CITATION:
1974 AIR 1355 1974 SCR (2) 383
1974 SCC (3) 616
ACT:
Income-tax Act (11 of 1922), s. 3-’Individual’,if includes
all Hindu deity
HEADNOTE:
On the question whether a Hindu deity is an ’individual’
within the meaning of that word under the provisions of the
income tax Act, 1922.
HELD : A Hindu deity falls within the meaning of the word
’individual’ in s. 3 and can be treated as ambit of
assessment. It would naturally be taxed through its she
baits who are in possession and management of its property.
[587-C]
As a result of the decision of the Bombay High Court in C.T.
v Ahmedabad Mill Owners, Association, 7 I.T.R. 369 that
individual in s. 3 of the Income tax Act,. 1922, must mean a
human being, the income-tax (Amendment) Act, 1939, amended
the words "association of individuals" in the section into
"association of persons"; but the word individual’, being
the first of the six assessable units mentioned in the
section, was retained and was not amended into ’person’. It
was not changed into "person" because the word ’person’ is
of wider import and includes any company or association or
body of individuals whether in corporated or not. So, a
word had to be chosen which would not carry with it the
wider import of the word ’Person’ and the word individual
was retained. After the amendment it was pointed cut by
this Court in Commissioner of Income tax v. Sodra Devi (32
I.T.R. 615) that the word individual not only means a human
being, but also includes a corporation created by a
statute. A Hindu deity is a juristic person capable of
holding property. As it can hold property and be in receipt
of Income and can also sue and be sued in a court of law
there is no reason why its income should be held to be out-
side the ambit of taxation since it can be brought within it
without straining the language of the statutory provision.
[586E-H; 587B-C]
Jogendra Nath Naskar v. Comr. of Income-tax (1969) 74,
I.T.R. 33 (S.C.), followed
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Commissioner of Income tax V. Salem District Urban Bank Ltd.
8 I.T.R. 269, Commr. of Income-tax v. Bar Council, 12,
I.T.R. 1, Sir Currimbhoy Ebrahim Baronetcy Trust v. Commr.
of Income-tax, 5. I.T.C. 484, referred to.
I.T.C. v. Jogendra Nath, A.I.R. 1965 Cal. 570 and Sri
Sridhar v. I.T. Office)’. A.I.R, 1966 Cal. 494, approved.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 2358-2366,
of 1968 & 1174, 1288-1299 of 1971.
From the judgment and Order dated the 4th January, 1966 of
the, Calcutta High Court in Income Tax Reference No. 25 of
1968.
Purshotham Chatterjee, P. K. Chakravarthy and Prodyot Kumar
Chakravarthy, for the appellant.
V. S. Desai, S.K. Aiyer and R. N. Sachthey, for the
respondent.
The Judgment of the Court was delivered by
ALAGIRISWAMI, J. The question that arises for decision in
these,appeals is whether a Hindu deity is an "individual"
within the meaning, of that word under the provisions of the
Indian Income-tax Act, 1922. It arises out of the judgment
of the High Court of Calcutta in a number of references
under section 66(1) of the Act. The facts necessary for the
decision, in a short compass, are these : In the year 1820
one Smt.
584
Chitra Dassi executed an Ekrarnama making a gift of a piece
of land for religious Purposes. In 1842 she executed a will
referring to the fact that she had-earlier made the property
debutter and directed her four sons, the executors, to
perform the daily service of Sri Radhagobindjee. She died
in 1855. In 1876 a suit was filed in the Calcutta High
Court praying that the trust should be administered by the
court and a scheme prepared. Subsequently, there were a
number of applications made from time to time and a number
of orders were also made on them. In 1929 a scheme of
administration was framed and a little later the (Official
Trustee of Bengal was appointed to be the trustee of the
said debutter estate. After the- official trustee took
possession of the properties he was assessed in respect of
the income of the debutter estate in the status of an
"individual" under section 41 of the Act. In respect of the
assessment years 1939-40 to 1942-43 a reference was made
under section 66(2) of the Act. A Bench of the Calcutta
High Court held that upon a proper construction of the,
relevant documents and the scheme sanctioned and orders
passed by the High Court the property should be held to be a
religious trust. The matter again went up to the High Court
in respect of the assessment years 194344 to 1951-52. Three
questions finally came to be considered by the High Court :
Q.1 Whether upon a proper construction of the
relevant documents executed by Smt. Chitra
Dassi and the relevant schemes sanctioned and
orders passed by the High Court, there was a
trust in favour of the Deity or whether there
was a dedication of the properties -to the
Deity ?
Q.2 Alternatively, if the dedication to the
Thakur constitute trust, is it a religious
trust which did not enure to the benefit of
the public ?
Q.3 Is the Thakur Radha Gobinda Jew liable to
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assessment under the Indian Income-tax Act ?
On question No. 1 the High Court held that upon a proper
construction of the relevant documents executed by Chitra
Dassi and the relevant Schemes sanctioned and orders passed
by the High Court there was a dedication of the properties
to the deity, but that there was no trust in the technical
sense, that is to say, as understood in the English law. in
respect of the first part of the 2nd question both parties
before the High Court agreed that in that question the word
"trust" did not mean a trust in the technical or the English
sense. The High Court pointed out that it has been held
that a dedication is a trust in the general sense within the
meaning of the expression as used in sections 4, 40 and 41
of the Income-tax Act and the word "trust" can be applied to
Hindu endowments. On the second part of the question it was
held that the endowment is a private religious trust and the
documents creating it or confirming it grant no benefit to
the members of the public, that an order made by the
Calcutta High Court by which
585
certain directions were given for feeding the poor, was the
only instance in which a benefit enured to the public. As
regards the 3rd question the High Court elaborately
discussed whether the deity could be held to be an
"individual" and held that the deity was liable to
assessment under the Income-tax Act.
Before this Court the only point argued was whether the High
Court was right in coming’ to the conclusion that the deity
is an "individual". When the High Court dealt with this
question it did not have: the benefit of the decision of
this Court in Jogendra Nath Naskar v.. Commr. of Income-tax
(1969-74 ITR 33) wherein it was held that a Hindu deity
falls within the meaning of the word "individual" in section
3 and can be treated as a unit of assessment. Mr.
Chatterjee arguing for the appellant urged that decision was
wrong and should, be reconsidered. We find ourselves in
entire agreement with the decision of this Court referred to
above. We shall, however, state our reasons within a short
compass.
it was conceded before us on behalf of the appellant that if
the word used had been a "person" instead of an "individual"
the deity would be a person because a person will include a
juristic person. That a Hindu deity is a juristic person is
a well established proposition and has been so for a long
time. In Maharanee Shibessouree Debia v. Mothooranath
Acharjo (1869 13 MIA 270) it was observed :
"The Talook itself, with which these Jimmas
were connected by tenure, was dedicated to the
religious services, of the Idol. The rents
constituted, therefore, in legal con-
templation, its property. The Sabait had not
the legal property, but only the title of
Manager of a religious. endowment."
In Prosunno Kumari Debya V. Golab,Chand Baboo
(1875 LR 2 IA 145) the above observations were
cited with approval. In Manohar Ganesh v.
Lakhmirmn (1887 ILR 12 Bom. 247) a Division
Bench of the Bombay High Court observed :
"The Hindu law, like the Roman law and those
derived from it, recognises, not only
corporate bodies with rights of property
vested in the corporation apart from its
individual members, but also the juridical
persons or subjects called foundations......
it is consistent with the giants having been
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made to the juridical person symbolized or
personified in the idol........
The Madras High Court in Vidyapurna Tirtha
Swami v. Vidyanidhk Tirtha Swami (1904 ILR 27
Mad. 435) expressed the view :
"It is to give due effect to such a sentiment,
widespread and deeprooted as it has always
been, with reference to something not capable
of holding property as a natural person, that
the laws of most countries have sanctioned the
creation of a fictitious person in the matter,
as is implied
586
in the felicitous observation made in the work
already cited : ’Perhaps the oldest of all
juristic persons is the God, here or the
saint."
in Pramatha Nath Mullick v. Pradyumna Kumar
Mullick (1925 LR 52 IA 245 ; AIR 1925 PC 139)
the Privy Council observed
"A Hindi idol is, according to long
established authority founded upon the
religious customs of the Hindus, and the
recognition thereof by courts of law, a
’juristic entity’. it has a juridical status
with the power of suing and being sued. Its
interests are attended to by the person who
has the deity in his charge and who is in law
its manager with all the powers which would,
in such circumstances, on analogy, be given to
the manager of the estate of an infant heir.
it is unnecessary to quote the authorities ;
for this doctrine, thus simply stated, is
firmly established."
The authorities thus amply establish that a
Hindu deity is a juristic person capable of
holding property.
Reference was made to the decision in C. L T.
v. Ahmedabad Mill Owners’ Association (7 ITR
369) where Beaumont, C. J. held :
"Individual" where first used, must mean human
being. because it is used as something
distinct from a joint family. firm and
company. The whole expression seems to me to
mean "every human being, Hindu undivided
family, company, firm and other association of
human beings."
Though in consequence of this decision the Income-tax
(Amendment) Act, 1939 amended the words "association of
individuals" into "association of persons". the word
"individual" being first of the six assessable units
mentioned in section 3 was retained and was not amended into
"Person". it could not be changed into "person" for the
obvious reason that the word "person" is of wider import and
includes any company or association or body of individuals,
whether incorporated or not. So a word had to be chosen,
which would not carry with it the wider import of the word
"person" and the word "individual" appears to have been
chosen. In Commissioner of Income-tax v. Sodra Devi (32 ITR
615) it was pointed out that the word "individual" not only
means a human being but also includes a corporation created
by a statute, e. g. a University, or a Bar Council or the
trustees of a Baronetcy trust, incorporated by a Baronetcy
Act (See the decisions in Commissioner of Income-tax v.
Salem District Urban Bank Ltd.. 8 ITR 269 ; Commissioner of
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Income-tax v. Bar Council, 12 ITR I ; and Sir Currimbhoy
Ebrahim Baronetcy Trust v. Commissioner of Income-tax, 5 ITC
484). But Dass J. observed :
"....... there is no difficulty whatsoever in
my opinion, in giving the word ’individual’
its natural meaning, that is, that the word
means either a male or a female."
But the court in that case was not concerned with the
problem whether the word "individual" can refer to a
juridical entity. Mukharji J. of
587
the Calcutta High Court in I T. Commr. v. Jogendra Nath (AIR
1965 Cal. 570) held that a Hindu deity can be either an
individual or a person or both. The same High Court in Sri
Sridhar v. L T. Officer (AIR 1966 Cal. 494) held that a
Hindu idol is a juristic entity who is given the status of a
human being capable of having property and it can be called
an "individual".
We are of opinion that as a Hindu deity can hold property
and be in receipt of income and can also sue and be sued in
a court of law there is no reason why its income should be
held to be outside the ambit of taxation if it can be
brought within it without straining the language of the
statutory provision. It would naturally be taxed through
its shebaits who are in possession and management of its
property. We may, however, mention that the problem whether
the Hindu deity is an individual is not likely to arise
after the enactment of Income-tax Act, 1961 which in clause
31 of section 2 defines a "person" as including (i) an
individual, (ii) a Hindu undivided family. (iii) a company,
(iv) a firm. (v) an association of persons or a body of
individuals, whether incorporated or not, (vi) a local
authority. and (vii) every artificial juridical person, not
falling within any of the preceding sub-clauses.
The appeals are dismissed with costs.
V.P.S. Appeals dismissed.
588