TMI Blog1965 (9) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... been enshrined. The said debutter is collectively described as " Shib Krishna Debutter " and the estate is known as the Shib Krishna Debutter Estate. The present shebait of the said deities, in terms of the said arpannamah, is Pulin Chandra Daw. For the assessment years 1952-53 to 1956-57, the Income-tax Officer, District II(I), Calcutta, assessed the income arising out of the said debutter properties, in the hands of the said Pulin Chandra Daw, as shebait. The said assessments were challenged before the appellate authorities and ultimately, before the Income-tax Appellate Tribunal, Calcutta. By the decision of the said Tribunal dated 23rd September, 1960, the appeals were partially successful, inasmuch as it was held that, so far as income under the head " property " was concerned, it could not be assessed in the hands of the shebait under section 9 of the Income-tax Act, 1922 (hereinafter referred to as the " said Act "), inasmuch as the shebaits were not the owners of the debutter properties. On or about the 15th March, 1961, five joint notices were issued on the two deities, Sri Sri Sridhar Jiew and Radharaman Jiew, represented by their shebait Sri Pulin Chandra Daw, under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , including a Hindu deity, has been expressly made assessable to income-tax. This has been effected by altering the definition of the word " person " in section 2(31) of the Income-tax Act, and also by changing the language of section 4(1). He, however, argues that prior to 1961, Hindu deities were not at all assessable to income-tax. In order to consider this point, Dr. Pal has invited us to consider the history of the Income-tax Acts commencing from Act XXXII of 1860 and to observe how they dealt with the question of private religious trusts. He has drawn our attention to the following enactments : Act XXXII of 1860 Section 133 granted power to the local government to exempt any property movable or immovable solely employed or dedicated to religious or charitable public purposes from being chargeable under the Act. Act XII of 1871 Section 4 provided that nothing in the Act applied to any movable or immovable property solely employed for religious or charitable public purposes. Act II of 1886 Section 5(1) provided that nothing in section 4 shall render liable to the tax, any income derived from property solely employed for religious or public charitable purposes Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53, with effect from 1st April, 1952, which amended the last paragraph of the sub-section and excluded from exemption not only income from property held under trust but also income from property held under " other legal obligation " for private religious purposes thus including private religious trusts like debutters. The relevant part of sub-section (3) of section 4, after the amendment, stood as follows : " 4. (3) Any income, profits or gains falling within the following classes shall not be included in the total income of the person receiving them : (i) Subject to the provisions of clause (c) of sub-section (1) of section 16, any income derived from property held under trust or other legal obligation wholly for religious or charitable purposes, in so far as such income is applied or accumulated for application to such religious or charitable purposes as relate to anything done within the taxable territories, and in the case of property so held in part only for such purposes, the income applied or finally set apart for application thereto. In this sub-section, 'charitable purpose' includes relief of the poor, education, medical relief and the advancement of any other object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at part." From the above history, Dr. Pal has invited us to come to the following conclusions: He asks us to observe that right up to the Amending Act of 1939; private religious trusts were wholly immune from taxation. It was the Amending Act of 1939 that took away the exemption unless the income enured for the benefit of the public. This, however, was interpreted by this High Court to mean that the exemption was taken away if the trust was in the English form and not when it was in the form of an endowment to the deity but not in the English form. According to him, the position was only altered by the Act of 1961, when all juridical persons were included in the net of taxation. He next argues that section 41 also does not apply in such cases. This part of the argument will have to be considered presently. According to Dr. Pal, a Hindu deity in order to be chargeable to income-tax, would have to come within the definition of "individual "in section 3. The word "individual " is not defined in the said Act and, according to him, the expression cannot include a juristic person like a Hindu deity, because if it did, we have to come to this painful conclusion that the said Act intende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If he failed to comply with the order, it was stated that an assessment would be made under section 25(5) which corresponds to section 22(3) of the said Act. On the 7th May, 1945, the assessee did not appear personally but his son, Jugal Chandra Mandal, filed a return signed in the vernacular as follows: "Sri Keshab Chandra Mandal Ba : Sri Jugal Chandra Mandal." There was no cross-mark of the assessee. The Agricultural Income-tax Officer held that these two returns differed violently and, as the latter one had not been signed by the assessee, he was going to rely on neither of the returns and made an assessment under section 25(5). The case eventually went up to the Supreme Court and the relevant point decided was as to whether the latter return could be said to be a proper one. The High Court had decided, relying on the decision of Queen v. Justices of Kent that unless the statute makes a personal signature indispensable, the provision as to signature would be satisfied by a person signing by the hand of an agent. The High Court observed that insistence on personal signature of an individual would create an anomaly, in that while an assessee who is an individual will have to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislature to make a Hindu deity chargeable under section 3. Next, Dr. Pal was faced with the provisions of section 41. If the shebait could be assessed under that section in respect of income of a Hindu deity, then he conceded that there was an indirect machinery provided by the Act for the assessment of a Hindu deity's income, and the application of section 3 could not be wholly excluded. He was, therefore, constrained to argue that a shebait of a deity did not come within the scope of section 41 of the said Act. The contention of Dr. Pal may, therefore, be summarised as follows : Firstly, he argues that a Hindu deity was never intended to be made chargeable under section 3 of the said Act. A Hindu deity does not come within the meaning of the word " individual ". Further, this intention of the legislature is clear from the fact that private religious trusts were always exempted from the operation of the said Act and it was only in 1939 that this exemption was taken away, only in the case of a trust in the English form. Next it is argued that this intention is also clear from the fact that no machinery was provided in the said Act for the realisation of any tax from Hindu deiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive by Mukherji J. In other words, he held that the word " trustee " or " trustees " in section 41 of the said Act would include the case of a shebait of a Hindu deity, in the case of a private religious endowment. Also, a Hindu deity was an " individual " under section 3 of the said Act. Laik J. agreed with the decision of Mukherji J. on the first point but differed on the second, although in the result both of them answered the question posed before them in the affirmative. On behalf of the assessee, reliance was placed on three decisions, namely, (1) Bidya Varothi Thirtha v. Balusami Ayyar, (2) W. O. Holdsworth v. State of Uttar Pradsh and (3) Mahant Moti Das v. S. P. Sahi. Mukherji J. rightly pointed out that all that these three decisions established was that a shebait was not a trustee in the English sense of the term or within the meaning of the Indian Trusts Act. They did not, however, establish that a shebait of a Hindu deity was not a trustee in the larger sense of the word. On the other hand, it was laid down that, although a shebait was not a trustee in the technical sense of the word as used in the English law or the Indian Trusts Act, the obligation and duties of a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw said as follows : " A Hindu 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. " Also, the fact that Mussalman wakfs are included shows that Hindu religious trusts are not intended to be excluded. That the expression "trust" can be applied to Hindu endowments has been explained by Mr. Justice Bijan Kumar Mukherjea in his Tagore Law Lectures : " The Hindu Law of Religious and Charitable Trusts ". After explaining the origin and meaning of the word "trust" in the English law, the learned author says as follows : "You will see that the 'trust' in its origin was a highly artificial thing which had its foundation upon a dual system of law and a dual system of property which came into existence in England under peculiar political and historical conditions. You could not possibly expect to find a trust in this form in the Hindu system. But the existence of dual ownership is not an essential ingredient in the conception of trust and if you take 'trust' in its broad and general sense as signifying a fid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... although it is done indirectly by assessing income in the hands of the shebait and not directly. Since I have held that section 41(1) does apply in the case of a shebait, the foundation of Dr. Pal's argument vanishes. However, I will also deal with the general argument that, under section 3 itself, the word " individual " should not include a Hindu deity who is a juristic person. Upon this point, I agree with the view expressed by Mukherjee J. in the unreported judgment referred to above, but, with respect, differ from the view of Laik J. The word " individual " does not necessarily refer to a human being. This has been made clear by the Supreme Court in the case of Commissioner of Income-tax v. Smt. Sodra Devi. The learned judge in the court below has also relied upon this case. In that case, Bhagwati J. pointed out as follows : ".......the word 'individual' has not been defined in the Act and there is authority for the proposition that the word 'individual' does not mean only a human being but is wide enough to include a group of persons forming a unit. It has been held that the word 'individual' includes a corporation created by a statute, e.g., a university or a bar council, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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." In the same case, the Judicial Committee quoted the observations of Sir Ashutosh Mukerji in Rambrahma Chatterjee v. Kedar Nath Banerjee, by saying : "It is sufficient to state that the deity is, in short, conceived as a living being and is treated in the same way as the master of the house would be treated by his humble servant. The daily routine of life is gone through with minute accuracy ; the vivified image is regaled with the necessaries and luxuries of life in due succession, even to the changing of clothes, the offering of cooked and uncooked food, and the retirement to rest. " This aspect of it has been well brought out in a Bench decision of this court in Tarit Bhusan Roy v. Sree Sree Iswar Sridhar Salagram Shila Thakur. It has been stated there as follows : "...The efficient subject of the rights ascribe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s point was that a consideration of the history of the Income-tax Acts would show that it was never the intention of the framers of the Act to bring a private religious trust within the ambit of section 3. All that he has been able to show is that under section 4 of the said Act, a private religious trust was exempted from taxation up to 1939 and till 31st March, 1952, the exemption was taken away only in the case of endowments in the form of an English trust. Endowments in other forms were still exempted. This was however rectified by the amending Act of 1953. In my opinion, this fails to show that a Hindu deity was never intended to be included within the ambit of section 3 of the said Act. Section 3 is the primary charging section, and section 4 contains certain exemptions. It may be that the net result of the statutory provisions up to 1939, or up to 31st March, 1952, was as stated by Dr. Pal, so far as private religious trusts are concerned. That, however, does not necessarily lead to the conclusion that it has intended always to exclude Hindu deities from the operation of section 3 of the said Act. If it was so, then there was no necessity of making any provision exempting su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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