TMI Blog1971 (4) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... f the authorities below, was treated as the basic order and was followed in the three assessment years, viz , 1953-54, 1958-59 and 1959-60. Eventually, two separate applications for reference were filed by the Commissioner of Income-tax, Delhi, raising a common question of law. This order will dispose of the said common question and will operate in respect of all the four assessment years, viz., 1953-54, 1958-59, 1959-60 and 1957-58. The question reads as follows : " Whether, on the facts and in the circumstances of the case, the offerings made at the feet of 'Satguru' was his personal income liable to income-tax or was the income of Sant Nirankari Mandal exempt under section 4(3) of the Income-tax Act ? " The facts are brief and are as follows : Shri Baba Avtar Singh Nirankari, the assessee herein, is the religious head of a spiritual sect called " Nirankari ". There is also a registered body known as Sant Nirankari Mandal and funds are collected from the followers of this faith for propagating the Nirankari cult and for some other charitable objects. The assessee is known to his followers as " Satguru ". Apart from the donations which are received by the Mandal such, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 1957-58 had not been accepted by the department and the matter was being pursued by a reference to the High Court. The Income-tax Officer, therefore, taxed the net receipts out of the offerings made at the feet of the Satguru in respect of those three years. Against the decision of the Income-tax Officer the assessee went up in appeal before the Appellate Assistant Commissioner. The latter followed the decision of the Tribunal in respect of 1957-58 assessment year and allowed the appeals by the assessee. Being dissatisfied with the Appellate Assistant Commissioner's order, the Income-tax Officer came up in appeal before the Income-tax Appellate Tribunal and challenged the decision. The Delhi Bench " B " of the Tribunal, who heard the appeals for these three years, agreed with the Appellate Assistant Commissioner and also with the Delhi Bench " C " which had heard the appeal for the assessment year 1957-58 and dismissed the department's appeals by its order dated February 12, 1968. Under section 66(1) of the Income-tax Act, 1922, the Tribunal having stated the case in respect of 1957-58 assessment year the same question was referred by the Tribunal in respect of these thre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs of fact first by an application under section 66(1). If the party concerned had failed to file an application under section 66(1) expressly raising the question about the validity of the finding of fact, he was not entitled to urge before the High Court that the finding was vitiated for any reasons. In that case the Supreme Court referred to three earlier decisions of that court, India Cements Ltd. v. Commissioner of Income-tax, Commissioner of Income-tax v. Shri Meenakshi Mills Ltd. and Commissioner of Income-tax v. Greaves Cotton and Co. Ltd., where the same view had been taken. Mr. Bajaj therefore contended that on these findings of fact the Tribunal's decision was wholly unassailable and the question had to be answered in favour of the assessee and the income was exempt under section 4(3) of the Income-tax Act 1922. Mr. Sharma, counsel for the revenue, submitted that on a close examination of the Tribunal's decision it could not be said that any finding of fact had been recorded by the Tribunal. All that the Tribunal had done was to take note of certain facts. One of those facts was that the assessee had himself stated that he had no interest in the offerings which b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oticed in respect of the assessment year 1957-58 which were excluded or ignored by the Tribunal as admissible or relevant evidence, it was for the Commissioner of Income-tax to ask for an express question under sections 66(1) or 66(2) of the Act so that the Tribunal's decision could be set aside on that ground. This aspect of the case is now fully settled by the decisions of the Supreme Court in G. Venkataswami Naidu Co. v. Commissioner of Income-tax, Udhavdas Kewalram v. Commissioner of Income-tax and Commissioner of Income-tax v. Greaves Cotton and Co. Ltd. No such question was asked by the Commissioner. The Tribunal being the fact-finding authority, it is not permissible for us to ignore the finding of fact recorded by the Tribunal and to examine the fact as found by the Income-tax Officer and the Appellate Assistant Commissioner with the object of setting aside the Tribunal's decision. Mr. Sharma next contended that, although the Supreme Court had held in the four cases relied upon by Mr. Bajaj that the court cannot disturb or go behind a finding of fact given by the Tribunal on any ground unless the finding has been first expressly challenged by a question raised in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0. It was on January 30, 1961, that the assessee sent a letter to the Income-tax Officer saying that he had transferred the surplus cash and the motor car (it was found that there were three such cars) which had been purchased in his name by the institution. He also said in his letter that he had no dependant as his wife was residing with his son. Mr. Sharma argued that if the cars were purchased in the name of the assessee and he was also keeping the offerings with himself for meeting his personal expenses and it was occasionally that a part of the money was being transferred to the institution then the Tribunal's finding that the assessee had no interest whatsoever in the offerings and that the funds belonged to the institution of which he was the head, could not be correct. Mr. Sharma then referred to the receipt which reads as under : " Offerings came at the feet of Sacha Patshah Ji (Satguru Ji) from ..................... rupees............ annas............... pies. " The receipt is no doubt issued by some one acting for the institution. It, however, does not bear any date and its language shows that it was not issued when the offerings were made. It is an ex post fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was the same in the case of the assessee and that the assessee's statement was material on which the Tribunal's finding could be based. The contention was wholly without any substance. The position of the assessee who utilises a part of the offerings for his personal use is entirely different. Mr. Bajaj also cited another dicision of the Allahabad High Court in Commissioner of Income-tax v. Radhaswami Satsang Sabha. One of the questions in that case was with regard to bhents (offerings) made by the followers of the deity (Radhaswami Dayal) in pursuance of the dictates of their faith. It was held, on an analysis of the rules and regulations of the Radhaswami Satsang Sabha, that the offerings vested in the sabha under a legal obligation wholly for religious or charitable purposes within the meaning of section 4(3)(i) of the Income-tax Act, 1922, but they could not be said to be income derived from property under section 4(3)(i). They were income of a religious or charitable institution derived from voluntary contributions and applicable solely to religious or charitable purposes and would properly come under clause (ii) of the sub-section. In the instant case, the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offerings were not made to the idol but to the assessee himself. He was looked upon by his devotees as guru and he gave mantras to his disciples who could only be initiated into the faith by the assessee chanting certain mantras. The offerings were taxed as the assessee's income from vocation. It was held that the source of those receipts was the abiding faith that the disciples had in their guru and the receipts came in with a fair regularity. One of the arguments raised before the High Court was that the gifts were personal to the assessee and had been made out of personal considerations. The argument was repelled and it was said that the gifts were made to the assessee by virtue of the office held by him because he was the head of his sect. Whether the office was hereditary, or it was held by reason of the fact that the holder of the office was descendant of his forefathers who held the same office in his time, was held not to make any difference. Mr. Sharma contended that the facts in the instant case are largely the same as those in that case. Another case referred to by Mr. Sharma again relates to the same assessee, but the decision in that case was rendered by the Gujarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ritweek of a satsang and for his work as such he received a salary from the institution. But in his capacity as a ritweek he initiated disciples into the satsang cult and received offerings from them. It was held that the gift was strictly traceable to the assessee's vocation of a teacher of the satsang cult and was a receipt by the assessee in the carrying of the assessee's vocation as a religious teacher and was as such, taxable in his hands. In this connection the attention of the court was invited to the following decisions of the Supreme Court : Krishna Menon (P.) v. Commissioner of Income-tax, Mahesh Anantrai Pattani v. Commissioner of Income-tax, Divicha v. Commissioner of Income-tax, and Parimisetti Seetharatnamma v. Commissioner of Income-tax. All these decisions, notwithstanding certain distinctions, prompt the observations that the offerings received by the assessee may very well be leviable to tax as his income from the vocation of religious preaching. We however do not wish to give any decided opinion on this point and would leave the matter in the hands of the taxing authorities who should go through the necessary facts in respect of the years to which the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X
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