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Issues Involved:
1. Applicability of Section 41 of the Indian Income-tax Act. 2. Determination of shares of deities in the income from trust properties. 3. Interpretation of Hindu law regarding joint tenancy and tenancy in common. Issue-wise Detailed Analysis: 1. Applicability of Section 41 of the Indian Income-tax Act: The primary question was whether the deities' shares in the income were defined, thereby entitling them to the benefits under Section 41 of the Indian Income-tax Act. Section 41(1) states that tax shall be levied on trustees in the same manner as it would be on the person on whose behalf the income is receivable. The proviso to this section indicates that if the individual shares are indeterminate or unknown, the tax will be levied at the maximum rate. The Income-tax Officer applied the maximum rate, deeming the shares indeterminate. However, the Appellate Assistant Commissioner and the Appellate Tribunal held that the deities' shares were equal in law, thus making the proviso inapplicable. 2. Determination of shares of deities in the income from trust properties: The court examined the deed of trust executed by Madan Gopal Dey and the will made by his wife. Both documents did not specify the shares of the two deities, Thakur Harihar Prabhu and Thakurani Sachimata. The court had to determine if the deities took equal shares in the income despite the lack of explicit specification. Dr. Pal, representing the assessee, argued that a gift to two Hindus without specified shares implies equal shares. Dr. Gupta, for the Income-tax Department, contended that it could be a joint gift or left to the trustees' discretion. The court referenced several precedents, including Bahu Rani v. Rajendra Baksh Singh and Jogeswar Narain Deo v. Ram Chandra Dutt, establishing that Hindu law does not recognize joint tenancy except in the case of coparcenary property of an undivided Hindu family. Therefore, a gift to two persons without specified shares is considered a gift in equal shares as tenants in common. 3. Interpretation of Hindu law regarding joint tenancy and tenancy in common: The court reiterated that joint tenancy is unknown to Hindu law, except for coparcenary property. The principle was affirmed in multiple cases, including Gopi v. Mussamat Jaldhara, where a bequest to two daughters without specified shares was held to be a tenancy in common. The court also cited Mulla's Principles of Hindu Law, which supports the notion that gifts to two or more persons without specified shares result in equal shares. The court found no reason to treat the deities differently from human beneficiaries under Hindu law. The High Court of Patna's decision in Sri Sri Jyotishwari Kalimata v. Commissioner of Income-tax, Bihar & Orissa, which held that deities take equal shares in the absence of specified shares, was deemed directly applicable. The court rejected Dr. Gupta's argument that the different worship schemes implied unequal shares, as there was no explicit intention from the settlor or testatrix to leave the matter to the trustees' discretion. The court also dismissed the relevance of Sections 106 and 107 of the Indian Succession Act, which Dr. Gupta cited to support joint tenancy, noting that these sections deal with the lapse of legacies and do not create joint tenancies. Furthermore, Schedule III of the Act clarifies that it does not authorize the creation of interests unknown to Hindu law. Conclusion: The court concluded that the grant and devise to the two deities without specification of shares gave them equal shares in the properties. Therefore, the shares were certain and known, making the proviso to Section 41 inapplicable. The Tribunal's decision was upheld, and the question was answered in the affirmative. The assessee was entitled to the costs of the reference, certified for two counsel.
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