Case: Jogendra Nath Naskar Vs. Commissioner of Income Tax, Calcutta

2. One Ram Kristo Naskar left a will dated 17th May, 1899 by which he left certain properties as debuttar to two deities Sri Sri Iswar Kubereswar Mahadeb Thakur and Sri Sri Anandamoyee Kalimata in the land joining his residential house at 74/75 Baliaghata Main Road. He appointed his two adopted sons Hem Chandra Naskar (since deceased) and Yagendra Nath Naskar as the shebaits. Elaborate provision was made as to the manner in which the income from the property was to be spent. For a long time the income from the property was assessed in the hands of the shebaits as trustees. In respect of the assessment years 1950-51 and 1951-52, the two she baits contended that there was no trust executed in the case and as such the income from the property did not attract liability to tax and particularly the assessments made in the name of Hem Chandra Naskar and his brother Yogendra Nath Naskar as trustees of the debuttar estate could not be sustained. The Appellate Assistant Commissioner accepted this contention on appeal and set aside the assessments. Finding that the assessments have been set aside on the footing that the status of the assessees had not been correctly determined the Income-tax Officer initiated proceedings for the assessment years 1952-53 and 1953-54 against Hem Chandra Naskar and Yogendra Nath Naskar, the shebaits of the two deities and completed the asssessments on the deities in the status of an individual and through the shebaits. The claim for exemption under the proviso to Section 4 (3) (i) of the Income-tax Act was rejected. On appeal the Appellate Assistant Commissioner upheld the assessment orders of the Income-tax Officer. The assessee appealed to the Appellate Tribunal and contended that the deities were not chargeable to tax under Section 3 of the Act; that Section 41 of the Act did not apply to the facts of the case. Though the shebaits were the managers who could come under the ambit of Section 41, they had not been appointed by or under any order of the Court and therefore the assessments were invalid and should be set aside, It was also contended that the case of the trustee having been specifically given up it would not be open to the Income-tax Department to bring the shebaits undder any of the categories mentioned in Section 41. The departmental representative contended that the assessments had been made on the shebaits not under Section 41 as trustees or managers but that the deities had been assessed as individuals and that Section 41 was a surplusage in making the assessments. The Tribunal held that though the shebaits were the managers for the purpose of Section 4l, they were not so appointed by or under any order of the Court, and, therefore, the second condition required by Section 41 was not fulfilled, and the shebaits could not be proceeded against. The Appellate Tribunal added that the specific provision on which the Tribunal first relied was that of trustee under Section 41, but that case having been given up the further attempt to assess the shebaits as managers under Section 41 could not be upheld. At the instance of the Commissioner of Income-tax, the Appellate Tribunal referred the following question of law for the opinion of the High Court under Section 66 (1) of theon the facts and in the circumstances of the case, the assessments on the deities through the shebaits under the provisions of Section 41 of the Indian Income-tax Act were in accordance with law?"

Court's reasoning:
Thus, according to the texts, the Gods have no beneficial enjoyment of the properties, and they can be described as their owners only in a figurative sense (Gaunartha). The correct legal position is that the idol as representing and embodying the spiritual purpose of the donor is the juristic person recognised by law and in this juristic person the dedicated propertyare accordingly of opinion that a Hindu deity falls within the meaning of the word individual under Section 3 of the Act and can be treated as a unit of assessment under thatsee no justification for this argument.On the other hand, we are of the opinion that the language employed in 1961 Act may be relied upon as a Parliamentary exposition of the earlier Act even on the assumption that the language employed in Section 3 of the earlier Act is ambiguous. It is clear that the word "individual in Section 3 of the 1922 Act includes within its connotation all artificial juridical persons and this legal position is made explicit and beyond challenge in the 1961. It is well established by high authorities that a Hindu idol is a juristic person in whom the dedicated propertyShould however be remembered that, the juristic person in the idol is not the material image, and it is an exploded theory that the image itself develops into a legal person as soon as it is consecrated and vivified by the Pran Pratishta ceremony. It is not also correct that the supreme being of which the idol is a symbol or image is the recipient and owner of the dedicated property.This is clearly laid down in authoritative Sanskritaccording to the texts, the Gods have no beneficial enjoyment of the properties, and they can be described as their owners only in a figurative sense (Gaunartha). The correct legal position is that the idol as representing and embodying the spiritual purpose of the donor is the juristic person recognised by law and in this juristic person the dedicated propertyaccording to the texts, the Gods have no beneficial enjoyment of the properties, and they can be described as their owners only in a figurative sense (Gaunartha). The correct legal position is that the idol as representing and embodying the spiritual purpose of the donor is the juristic person recognised by law and in this juristic person the dedicated propertye accordingly of opinion that a Hindu deity falls within the meaning of the word individual under Section 3 of the Act and can be treated as a unit of assessment under thatsee no justification for this argument.On the other hand, we are of the opinion that the language employed in 1961 Act may be relied upon as a Parliamentary exposition of the earlier Act even on the assumption that the language employed in Section 3 of the earlier Act is ambiguous. It is clear that the word "individual in Section 3 of the 1922 Act includes within its connotation all artificial juridical persons and this legal position is made explicit and beyond challenge in the 1961