TMI Blog1991 (11) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... e ambit and purport of the question would not be properly appreciated unless the background is indicated. The assessee is the Radhaswami Satsang, Agra. This sect was founded by Swami Shiv Dayal Singh in 1861. The tenets of this faith, inter alia, accept the position that God is represented on earth by a human being who is called the Sant Satguru. The first of such gurus was the founder himself and he was popularly known as "Soami Ji Maharaj". The second Satguru (1879-1898) was Rai Bahadur Salig Ram and he was known as "Hazoor Maharaj". The third Sant Satguru was Pandit Brahma Shanker Misra (1898-1907) and was widely known as "Maharaj Sahib". These three Satgurus have been regarded as the real exponents of the creed. Out of donations and offerings made to the Satgurus, large funds were built up and properties were acquired over the years. During the time of the third Satguru, in 1902, the members of the creed at a largely attended convention established a Central Council and the right, title and interest of all the properties-movable and immovable-which had by then been collected were vested in the council under the directions of Maharaj Sahib. In June, 1904 the constitution and bye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3)(i) of the Indian Income-tax Act, 1922, and directed that the offerings be deleted from the assessment for the two years. He, accordingly, held that no reference under section 66(2) was necessary to be made. An application under section 35 of the Act was later filed for rectification by pointing out that the offerings received by the Satgurus consisted of interest income, property income, and income derived from sale of books and photographs, etc., and the same should also be excluded. On December 8, 1945, the Commissioner directed deletion thereof. For the year 1939-40, the Income-tax Officer did not grant exemption under section 4(3)(i) of the Act but the appeal challenging the assessment was accepted by the Appellate Assistant Commissioner in September, 1947, upholding the assessee's claim for exemption. Nothing substantial happened until the assessment year 1963-64. During this period, refund applications of the Satsang were accepted by the Department on the basis that the income was exempt and as tax had been deducted at source, the same was refundable. For the first time, claim for refund in the years 1964-65, 1965-66 and 1966-67 was not allowed and the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or set apart is not in excess of 25 % of the income from such property ; . . . " The conditions which have to be satisfied to entitle one for exemption, therefore, are : (a) the property from which the income is derived should be held under trust or other legal obligation ; (b) the property should be so held for charitable or religious purposes which enure for the benefit of the public." It is well-settled that no formal document is necessary to create trust. The reference itself accepts the position that the assessee is a religious institution. There has been some amount of debate in the forums below as to whether Radhasoami Satsang is a religion. This court, in Acharya Jagdishwaranand Avadhuta v. Commissioner of Police [1983] 4 SCC 522, AIR 1984 SC 51, while examining the claim of Anand Margis to be treated as a separate religion, indicated (at p. 55 of AIR 1984 SC) "The words 'religious denomination' in article 26 of the Constitution must take their colour from the word 'religion' and if this be so, the expression 'religious denomination' must also satisfy three conditions: (i) it must be a collection of individuals who have a system of beliefs or doctrines whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e properties of the assessee are also recorded in the name of the Sabha (Central Council) and there is no personal interest claimed by the Sant Satguru in such property. Over the years, the Satguru has never claimed any title over, or beneficial interest in, the properties and they have always been utilised for the purpose of the religious community. The test applied by the Privy Council in the case of All India Spinners' Association v. CIT [1944] 12 ITR 482 is indeed applicable to the facts of the present case and the result would then be in favour of the assessee. We would like to point out that even if the trust was revocable, the property was not to go back to the Satguru on revocation. The constitution and the bye-laws on record indicate in clause 1 (b) : " 1. The constitutional powers of the Central Council Radhasoami Satsang ... are as below : (b) to collect, preserve and administer the properties movable and immovable that have been or may hereafter be dedicated to Radhasoami Dayal or that may be acquired for or presented to the Radhasoami Satsang for the furtherance of the objects of the Satsang." This envisages that where the property was given to the Sant Satguru, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the construction of the documents or the weight of certain circumstances. If this were permitted litigation would have no end, except when legal ingenuity is exhausted. It is a principle of law that this cannot be permitted, and there is abundant authority reiterating that principle. Thirdly, the same principle-namely, that of a setting to rest rights of litigants, applies to the case where a point, fundamental to the decision, taken or assumed by the plaintiff and traversable by the defendant, has not been traversed. In that case also a defendant is bound by the judgment, although it may be true enough that subsequent light or ingenuity might suggest some traverse which had not been taken." These observations were made in a case where taxation was in issue. This court in Parashuram Pottery Works Co. Ltd. v. ITO [1977] 106 ITR 1 at p. 10 stated: "At the same time, we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other sph ..... X X X X Extracts X X X X X X X X Extracts X X X X
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