the Official Trustee of West Bengal for the Trust of Chitra Dassi v. C.L.T West Bengal, Calcutta

Judgment

0 THE OFFICIAL TRUSTEEOFWESTBENGAL FOR THE TRUST OF CH!TRA DASSI C.T.T WEST BENGAL, CALCUTTA Dect•mbrr 4, 1973 [t\.1'1. RAY, C.J. H. R. KHANNA K. K. MATHew, A. AtAGIRISWAMI: AND P. N. DHAGWATI, JJ.} /ncomt·ttn: Act (II o/1922), s. 3-'lllllividuo/', i/illclrtdf1 a Hindll d•ity OD chequescion whe!her a Hindu deicy is an 'individual' within the mean in~: of. !Nt word under the provisions of the Income tax Act, 1922. HELD :A Hindu deity falls wi!ltin the meaning oft he'"'' d 'ir.di,·idu' r in>. 3 . >Jtdt'n belre>!edasaunitofassessment. lt\\Oul<l no tutoll~~c ta,d tt.JCl[hit> sheb:lits "ho arc in possession and manogfmcnc cf its pt<pelly. (!8i-Cj Ala rc<ult of the decision of !he Domb:ty High Court in CJ.T. v. Ahmuiabod · MiiiO••tttrs,Assxiation, 7 J.T.R. 369chat 'individuar ins. 3 ofche lnccrr.e!ox Act . . 1921, must nu:an a human being, !he Income-tax (Amendment)

Act, 1939,: mcr.dco lhe '1\"0rds wassoci<ltion of individuals'' in the section iOIO •'assccJaaicn Of ('tr!Cn5··;. butlhe "ord'individual', being the first of !he six assessable unil5 rn<ntioncd Jl\ the settion, was retainrd and w:ls. not amended inao •person·~ lt was not ch3r.Ztd IIllo "penon" because the word 'person' is of wider imrort ardincludc> any ccrr-r' r.J orl5soci;tion or body of individuals'' hethcr incorporated or not. So, a .. ord h2d to be chosen " •hich "ould not carry Wilh it !he "ider import or the word 'pet~cn·· 111d the word 'ind"·iduol' ""''retained. After !he amendment, it WDs !'tinted ~ut by tlrisCourt rn Commi.uioner of l11~om~ tax v. Soclro Dcri(J! J.T.R . 615) tb.:tt tl'c •"Drd 'iD~t•iduaJ' not only means 11 h uman be in&. but also ;ncludes a corporoticn <1<21<d by a St3tUle. A Hindu deity ;. II juristic person capoble or holdtr>g ~·C- .

Peny, As it can hold properly nnd be in receipt o r inccme and con abo sue ord te tll(d In; coun of taw the1e is no rcuson why its income should be held t? l'C out• · ude the ambit of ta.ntion since it can be brought within il withoul stroon1rg the l•nsu•re of the statutory provision. [586E-H; 587B-q JorwlrqSoth Naskor v. Comr. o[lncamc·lax( !969) 74,1.T.R. 33 (S.C.), rollo"·cd .. Contml.uio~r of l11come tax v. Solt'lll Dlstrirt Urbclll Bank Ltd. ~ l.T.R. 269: Cumnv.o} "'a>tn<·tax v. Oar Cotmcll, J2,J.T.R. I. Sir C11rrimhltoy Ebrahtm JJoronrtr) r,.,t v. C>nunr. of lt~come ·tax, S. l.T,l:, ~84, referred to. I.T.C. v. /uiJt~~dra Nath, A.l.R. I96S Cal. SiO and Sri Sru!lw v. l.T. Offirtr. A.l.R. 1966 C:U. 494, approved. Cti'IL APPI'LLATE JuniSDICTIOS : Civil Appeals Nos. 2358-2366 or 1963 & 1174, 1288- 1299 of 1971. From the judgment and Order dated the 4th Januury, 1966 of the Cah:utta High Court in Income Tax Rcfcren.:c N0. 25 of 1968· Ch~utJhulltum Cftullerjt:l!, P. K. Cltakramrrlry and Prod.t·ot Kullt<tr· rarartfty, for the appellant.

Y. S. DfJui, S. K . Alrer and R .N. Suchtltt:y. for the rcspond~nl. The Judgmclll of th~ Court was ddiwn:d by a AUGIRISWA~tr J The question that uriscs for decision in lh~sc · o~~~ls is whet he; a Hindu deity is un "indi\'idual" wilhittth~ n;e~~~?g · ltarj~ v.ord under the provisions of the Indianinconte-ta~ cn;tmb; ; or rere s out of the judgment of th~ High Court of Cf:kut.ta t~:Ssary for· lbe <k:.e?ces .under section 66(1) of the Act. Th7 :~~lsl~~O ot;e Smt- ~S•on, 111 a short compass, an: these : In th~ Y•·'r '584 [1974] 2 s.c .a. ·Chitra Dassi executed a11 Ekrarnama making a ~ift of a piece f 1 for religious purposes. In 1842 she executed a will referring to 1~ ~nd that she bad earlier made the property de butter and directed he e ~act sons the executors, to perform the daily service of Sri Radhagobi~d~ur ·she died in 1855. In 1876 a suit was filed in the Calcutta High o;ee. praying that the trust should be administered by the court and a sche urt prepared.

Subsequently, there were a number of applications m: 'from time to time and a !l~mbe~ of orders were also made on them. In 1929 a scheme of admm1strat10n was framed and a little later the ·Official Trustee of Bengal was appointed to be the trustt!c of the said debuttcr estate. After the oflicial trustee took possession of the properties he was assessed in respect of the income of the debuuer estate in tlle 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 constntction of the relevant ·documents and the scheme sanctioned ami 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 1943-44 to 1951-52. Three questions finally came to be .con~idcred by the High Court :

Q.l Whether upon a proper construction of the relevant documents executed by Smt. Chitra Dassi and the rdcvant 'ch~'IDes sanctioned and orders passed by the High Court, there was a trust in fa\our ofthe Deity or whether there was a dedication of the properties to the Deity ? Q.2 Alternali,•ely, if the dedication to th~ Thakur <:anstitute trust, is it a religious trust which dic.l no! enure to the benefit of the public ? Q.3 Is the Thakur RaJha Gobinda Jew liable to assessmenl under the Indian Income-tax Act ? <?n question N~.

I the High Court beld that upon a prop_cr ~';tt~ 'TUCL1on of the relevant documents executed by Chitra Das~ lane uri Tclevaot Schemes sanctioned and orders pas~c:d by the H•g 1 ~,-a1 ihcre Was. a dedication Of the properties IO the d.:ity, but that th~re the no t~ust m the technical sense, that is to say. u Ultd~rstood 1nlfti,s Enghsb law. ~~~respect of the Jirst part of the 2nJ .questton bo~·~rust" ~fore the H1gh Court agreed that in thnt questiOn the \\Of High ·dll.l not mean n trust in the te.:hnical or the En~:! ish sense. The ·till ·Court pointed out that it has be~n held that a dedication is 8 ~rd> in the .general sen;e within the meaning of the expression ~~ ~~ .. cJO ·•cctlons. 4, 40 a~d 41 of the Income-tax Act and the word tr 11estion ?e appiled to Hmdu endowment~.

On the second p;trl of the q docu· ut was held t.hat :he endowment is a private religious trust and tb~rs of ments c~c:atmg 1t or confirming it grant 110 bt!netit to the rne!!l whi,b •the pubhc, that an order made by the CakuttOI High Court bY -.:.-~_66 ·~ oFfiCIAL TRUSTEE V. C·J.T. (Alagiriswami, J.) I I II . directions were given for feeding t!1e poor, was the on! . certat~n wb.ich a benefit enured to the pub he. As regards the 3rd Y znst~cethe High Court elaborately discussed whether the deity cou't:f_C~ flO~ to be an "individual" and held that the deity was liable to assess- ~ent under the Income-tax Act. Before this ~ourt ~he only point a~gucd was whether tbe High . Court was right tn c~mJDg to the concl!!ston ~hat the deity is an "indtvidual". When the Hig~ ~ourt de.alt Wtth t_hts question it did not have the benefit of the dcctston of thts Court tn Jogendra Nath Na:skar v CoiiUIJr. of ]llcome-rax_ (1969-74 lfR 33) wherein it was hdd that;

Hindu ddly falls wtthtn the mca.niOg of the word "individual" in section 3 and can be treated as a untt of assessment. Mr. Chatterjee arguing for the appellant urged that thn_t dcci.sion was wrong an<.! should be reconsidered. We find ourselves tn enure agreement with the decision of this Court referred to above. We shall, however, state our re~sons 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 b~ been so for a long time. In Maharanee Sltibessouree 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 constitut~d. therefore, in kgal contemplation, its property.

The Sabait had not the legal property, but only the title of Manager of a rdigious endowment." In ProSUflllo Kumari Debya v. Golab Chand Baboo (1875 LR 2 IA. 1145) the above observations were cited with npproval. In Mano!Jar Ga11tsh v. Lakluniram (1887 ILR 12 ·Born. 247) a Division Bench of. the Bombay High Court obserwd : "The Hindu taw like the Roman law and those derived from it, recognises, ~ot only corporate bodies w!th. rig_h~s of property vested in the corporation apart from tts tn~tvt­ dua! members, but also the juridical perso_ns or subjects called foundations . •••. . it is consistent wtth the. grants having been made to the juridical persott symbolized or personified in the idol .. . ••. " '[·The Madra~ High Court in Vid;·opurno Tirtha Sll'am~ v. Vidyanidlu: ITtha:swumt (1904 JLR 27 Mad. 435) e:tprc~scd the VtcW :

"It is to give due clfcct to such a sentiment, wid.:spread and decprootcd ns it has alw<tys been. witll rcfcren.ce ~~ tomething not cnpabl~: of holding property ns a n~tur d ""rs 1 Jtave sanctton~ ron, t tat the laws of most countncs . . r d the crc~tion of n fictitious person in the mntter, as ts unp te '586 {1974] 2 s.c.n. in the felicitous observation made in the work already cited. 'Perhaps the oldest of all juristic persons is the God, her~ or the saint." In Pramatha Nath i'.fullif'k l'. Pracl)'lmma Kumar Mullick ( 1925 LR :52 lA 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 arc attended to by the person who has the deity in his charge and \\ho is in law its manager v.ith ;~ll the powers \\hich would, in such circumstances, on analogy, be given to the manager of the estate or an infant heir. It is unnecessary to quote the authorities ; fnr this doctrine, thus simply stated, is firmly cstab!ishcd." The authorities thus amply est;tblish that a Hindu deity is a juristic -~rson capable of holding property. Reference was made to the decision in C. l. T. v. Alrmeclabad .\fill ..()u·ners' A.uocialian (7 ITR 369) v.hcrc Beaumont, C. J. held : "Individual" where Iir~t used, must mean human being, bc~ausc 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 huma n beings." Though in consequence of this decision the Income-tax (Amendment)

Act, 1939 amended the words "assoc.:iation of individuals" into "association of persons". the word "individual" being first of the six assess- .able units mentioned in section 3 was retained and w:ts not amended into "person". It could not be changed into "person" for the obvious ·reason that the 1\ord "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 chosc11, \\ hich \•ould not carry with it the wider import of the word "person" nod the \\Ord "individual" appears to ha\'e been chosen. In Cor~~missioner or Income-tax v. Sodra lJl'l'l (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 th~ trustees or a Daronctcy trust, im;(lrporatcu by a Baronetcy Act (See the decisions ·in CorrmriSJiorru of lrrcoure-ta:r; v. Salt!m District Urball .Bank Ud. 8 ITR :69 :

COI!IIIIissiorr('r of Income-tax v. n., Cormfi~. 12 ITR 1 : and Str CurrlmiJIJoy Ebrahim Baronetcy Trust v. Comnu· .sslom•r of IJJcorrrt'·tux, S lTC 4~4), Gut Dass J, obo;erved : " .. :· ... there is no dillicuhy \1 lwtsoewr in my opinion, in g•vJng the word 'individual' its natural meaning, that is, that the word means citbcr a male or a fcnwlc." llut the co.~;t in !hat :~Sc was not cor1ccrned with the probl.:m \~~cth~r the word mdtvtdual c;tn refer to a juridical entity. Mukharjt J. of u tl OFFICIAL TRUSTEE v. C·I.T. (A.[agiriswami, /,) 58.7 the Calcutta High Court in J. T. Commr. 1'. Jvgendra Natlr (AIR I96S Cal. 570) held that a Hindu deity can be either an individual or a person or both. The same High Court in Sri Sridhar 1'./. 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".

8 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 Jaw 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 natural~ be taxed through its shebaits who are in possessiort and managemei.lt 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.