Pathak, J.:— This is a reference made by the Income-tax Appellate Tribunal under Section 66(1) of the Income-tax Act, 1922.

2. The assessee is a registered firm consisting of six partners, one of whom, Nanhi Devi, enjoys a share of four annas in the firm. On Bhado Sudi 13, Sambat 2010, the account of Nanhi Devi in the books of the assessee firm disclosed an opening credit balance of Rupees 1,57,056-14-6. On the same day, her account was debited with a sum of Rs. 1,01,000 and various sums totalling this amount were credited in the accounts of different persons in the books of the firm, among them being a sum of Rs. 15,000 credited in the account of the deity Sri Parmanand Behariji Maharaj. The sums were credited in these several accounts at the instance of Nanhi Devi as gifts made by her. Excepting the deity, the recipients of the remaining sums were the descendants of the brother of Nanhi Devi's husband, Nanhi Devi herself being a childless widow. The transfer entries in the cash book of the firm were signed by the donees personally and where they were minors were signed by their natural guardians. In the case of the deity, however, it seems that one Sri Ram Gupta appended his signature. Although it was alleged that Sri Ram Gupta was the duly constituted trustee on behalf of the deity no evidence was produced in support of the allegation. In the assessment proceedings for the year 1955–1956 the firm claimed a deduction of Rs. 4,370 as interest paid on the sums standing to the credit of some of these donees and the deity. The claim was disallowed by the Income-tax Officer and by the Appellate Assistant Commissioner on appeal. The Tribunal allowed the claim in respect of the interest credited to the several donees but rejected it in respect of the interest credited in the account of the deity. For the assessment year 1957–1958, with which this reference is concerned, the Tribunal similarly disallowed the claim to deduction of the interest credited in the account of the deity. The Tribunal took the view that acceptance of the gift on behalf of the deity was necessary to constitute a gift in law, and found that there was no evidence of such acceptance. It held, therefore, that Nanhi Devi had not divested herself of the ownership of the fund credited to the account of the deity. It repelled the contention of the assessee that Section 122 of the Transfer of Property Act did not apply to Hindu religious endowments.

3. At the instance of the assessee, the following question has been referred:

“Whether on the facts and the circumstances of the case, there was a valid gift in favour of the idol Sri Parmanand Behariji Thakurji Maharaj by Smt. Nanhi Devi?”

4. What constitutes a “gift” has been defined in Section 122 of the Transfer of Property Act. That there may be a gift there must be a transfer of moveable or immoveable property. What is a “transfer of property” has been defined in S. 5. It is an act by which a living person conveys property to one or more living persons. And the words “living person” have been defined in that provision to extend to a company or association or body of individuals, whether incorporated or not.

5. Now it seems to us that a deity is neither a “living person” within the natural meaning of those words nor is it so within the scope of their extended definition. In their natural meaning, the words “living person” cannot apply to a deity. The words must refer to a person who is capable of death. The word “living” is used in contradistinction to “dead”. It is not possible to conceive of the birth or death of the deity. According to the fundamental notions of Hindu religious thought the deity always was and always will be. It was observed in Narasimhaswami v. Venkatalingam, ILR 50 Mad 687 : (AIR 1927 Mad 636 (FB)), that “by no stretch of imagination legal or otherwise, can it be said that the Almighty is a living person within the meaning of the Transfer of Property Act”. And the entities mentioned in the extended definition are such as are capable of extinction. A company, an association or body of individuals, whether they are incorporated or not, are all liable to dissolution.

6. If a deity is not a “living person” within the meaning of that expression in the definition of “transfer of property”, Section 122 of the Transfer of Property Act cannot apply at all and for that reason when property is dedicated to a Hindu deity, no gift, as denned in Section 122, can be said to have been effected.

7. There is another reason which prompts us to hold that a dedication in favour of a Hindu deity is not a “gift” under the Transfer of Property Act. There can be a gift only if the transfer by the donor is accepted by the donee. It is well settled that for the purpose of dedicating property to a Hindu deity it is not necessary that the property should be vested in a trustee or that possession should be handed over to a manager. All that is necessary is that the owner of the property should divest himself of his rights of ownership therein and that the property should be set apart for the object to which it is dedicated. In this view of the matter also the term “gift” as used in the Transfer of Property Act cannot be properly applied when property is dedicated to a Hindu deity. What is dedication under the notions of Hindu jurisprudence has been described by Mookerjee, J. in Bhupati Nath Smrititirtha v. Ram Lal Maitra, ILR 37 Cal 128 in the following terms:

“The true Hindu conception of dedication for the establishment of the image of the deity and for the maintenance there of is that the owner divests himself of all rights in the property; the King, as the ultimate protector of the State, undertakes the supervision of all endowments. There is no acceptance on the part of the deity, but from the dedication, religious merit and spiritual merit accrue to the founder and material benefit accrues to the person in charge of the worship and to the creatures of God,”

and we are warned that,

“we must not assume too readily that a Hindu deity is a juridical person for all purposes, and stands on precisely the same footing, capable of the same rights, and subject to the same liabilities as an ordinary sentient being ……….”. ILR 37 Cal 128 at p. 145. Indeed, the Judicial Committee has pointed out that it is only in an ideal sense that property can be said to belong to an idol. See Prosunno Kumari Dibya v. Golab Chand Baboo, 2 Ind App 145 (PC) and Jagadindra Nath Roy v. Hemanta Kumari Debi, 31 Ind App 203 (PC). It appears to us that having regard to the true nature of the act of dedication of property to a Hindu deity, no acceptance is required, or can possibly be required, of the deity in order to complete the dedication.

8. Learned counsel for the Commissioner relied upon Ahmad Hussain v. Kallu Mian Sajhi, AIR 1929 All 277. That was a case, however, where the Court was required to consider the question whether a waqf made under the Muhammadan law was governed by the Transfer of Property Act and it was held that the transfer was governed by that enactment. It is not necessary for us to express ourselves on the correctness of that decision. It is sufficient to Point out that the instant case must be governed by the principles obtaining under the Hindu law. Reference was also made to Shoukat Begam v. Shri Thakurji Maharaj, AIR 1931 Oudh 14 but all that was decided in that case was that the provisions of Section 123 of the Transfer of Property Act applied to gifts made directly as well as to gifts made through the intervention of a trust. The question whether the provisions of Section 123 could apply at all to a Hindu religious endowment was not raised in that case. Learned counsel has also relied upon Bhopatrao v. Shri Ramchandra Sansthan Kund Sarjapur, AIR 1926 Nag 469. It seems to us, however, that the law propounded in that decision is based upon the principles formulated in Bhupati Nath Smrititirtha's case, ILR 37 Cal 128 (FB) (supra) and the decision is, therefore, of no assistance to the Commissioner. We were also referred to Pramatha Nath v. Pradhyumna Kumar, AIR 1925 PC 139. The Judicial Committee in that case merely expressed the opinion that a Hindu idol was a juristic entity and did not express any view on the question whether it was necessary, in order to perfect an endowment, that the endowment should be accepted on behalf of the idol.

9. The argument advanced by the assessee before the Tribunal in appeal was that Section 123 of the Transfer or Property Act did not apply to Hindu religious endowments, and the only ground on which the Tribunal repelled that submission was that the provision did not indicate that acceptance on behalf of the idol was not necessary. It appears that the Tribunal misconceived the true nature of the contention raised by the assessee. The assessee had urged that Section 123 did not apply at all because the transaction under consideration was not a gift but a Hindu religious endowment. It was no answer to say that acceptance on behalf of the idol was necessary. The element of acceptance was relevant only if the transaction was in the nature of a gift as defined in Section 122. This misconception is reflected in the question framed by the Tribunal.

10. Learned counsel for the Commissioner then urges that crediting the sum of Rs. 15,000/- in the account of the deity did not in law amount to the making of an endowment.

“It is well settled that no writing is necessary to create an endowment unless the endowment is to be created by a will. It is also not necessary that a trust be created for that purpose. No religious ceremony such as Sankalp or Samarpan is necessary. All that is essential is that “firstly, property in respect of which the endowment is made must be designated with precision; secondly, the object or purpose of dedication should be clearly indicated; and, thirdly, the founder must effectively divest himself of all beneficial interest in the endowed property”*

Before it can be determined whether an endowment has been created it is necessary to ascertain whether the property has been set apart or appropriated by, or at the instance of, the founder of the endowment. One of the tests for determining whether this is so is the abandonment by the rounder of his right to deal with the property. This calls for an investigation into facts. And there is nothing before us to show how the funds in the account of the deity were dealt with. It is not clear whether the account of the deity was commenced at the instance of Nanhi Devi and that she was entitled to operate it. If the account had not been brought into existence by the firm upon instructions from Nanhi Devi and she had no control over its operation, it could be said that by transferring money to that account the money passed beyond the control of Nanhi Devi and a valid endowment resulted. The position would be distinguishable from that obtaining in the cases cited on behalf of the Commissioner before us. Sooniram Ramniranjandass v. Alagu Nachiyar, 1939 Rang LR 59 : (AIR 1938 PC 259), Hariram v. Madan Gopal, AIR 1929 PC 77 and Hanmantram Ramnath v. Commissioner Of Income-Tax, Bombay, (1946) 14 ITR 716 : (AIR 1947 Bom 115) are all cases where the credit entry purporting to transfer the amount to the deity or to the trust was made in the account books of the transferor himself and, therefore, remained entirely within his control, and it was not possible to say that the amount had been set apart and that he had divested himself of the ownership in it. As this question was never investigated by the income tax authorities and no such objection to the endowment was raised before the Tribunal, and as it calls for findings of fact beyond those which already exist before us, it is not possible to say that Nanhi Devi id not succeed in perfecting the endowment to which she appears to have devoted herself. Consequently, we cannot entertain this contention or learned counsel for the Commissioner.

11. Upon the reasons given by us, we held that there was no “gift” as defined in Section 122 of the Transfer of Property Act by Smt. Nanhi Devi in favour of the idol Sri Parmanand Behariji Thakurji Maharaj, but we are of opinion that there was an endowment by her in favour of the idol.

12. We answer the question referred to this Court accordingly.

13. A copy of this judgment under the seal of the Court and the signature of the Registrar shall be sent to the Income Tax Appellate Tribunal.

14. The assessee will get its costs from the Commissioner of Income Tax which we fix at Rs. 200/-. Counsel's fee is also fixed at Rs. 200/-.

FI/MES/R.G.D

15. Reference answered.