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Official Trustee Of West Bengal For The Trust Of Chitra Dassi v. Cit, Calcutta, West Bengal .
Factual and Procedural Background
In 1820, Smt. Chitra Dassi executed an Ekrarnama gifting a piece of land for religious purposes. She subsequently executed a will in 1842 confirming that the property had been made debutter and directing her four sons to perform the daily service of Sri Radhagobindjee. Upon her death in 1855, litigation concerning the endowment ensued. In 1876 a suit was filed in the Calcutta High Court seeking court administration of the trust and preparation of a scheme. Several interim applications followed, and in 1929 a formal scheme of administration was framed; the Official Trustee of Bengal was later appointed trustee of the debutter estate.
After assuming possession, the Official Trustee was assessed to income tax in respect of the estate’s income, the assessing officer treating the Hindu deity as an “individual” under Section 41 of the Indian Income-tax Act, 1922. References for Assessment Years 1939-40 to 1942-43 and, later, 1943-44 to 1951-52 were made to the Calcutta High Court under Section 66. The High Court concluded that the property was dedicated to the deity, that the endowment was a private religious trust, and that the deity could be assessed as an “individual.” The present appeals challenge only that last conclusion before the Supreme Court of India.
Legal Issues Presented
- Whether a Hindu deity can be treated as an “individual” for the purpose of assessment under the Indian Income-tax Act, 1922.
- Incidental to the above: whether the Calcutta High Court’s reliance on prior authorities, notably Yogendra Nath Naskar v. CIT, was correct in law.
Arguments of the Parties
Appellant’s Arguments
- The precedent in Yogendra Nath Naskar v. CIT, Calcutta (1969) 74 ITR 33, holding that a Hindu deity is an “individual,” was erroneous and should be reconsidered.
- It was conceded, however, that if the statute had employed the word “person” instead of “individual,” the deity would fall within that term because a deity is a juristic person.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Yogendra Nath Naskar v. CIT, Calcutta (1969) 74 ITR 33 | Holds that a Hindu deity falls within the word “individual” in Section 3 of the 1922 Act. | Accepted and followed; Supreme Court agreed with its reasoning. |
| Maharanee Shibessouree Debia v. Mothooranath Acharjo (1869) 13 MIA 270 | Recognises that property dedicated to an idol is legally its property and that the shebait is merely manager. | Cited to confirm the juristic personality of a deity capable of owning property. |
| Prosunno Kumari Debya v. Golab Chand Baboo (1875) 2 IA 145 | Approves the above proposition regarding an idol’s property rights. | Referenced as supporting authority for juristic personality. |
| Manohar Ganesh v. Lakhmiram ILR 12 Bom 247 (1888) | Explains that Hindu law recognises juridical persons such as idols that can hold property. | Used to reinforce that an idol can be a legal subject. |
| Vidyapurna Tirtha Swami v. Vidyanidhi Tirtha Swami ILR 27 Mad 435 (1904) | Notes the historical recognition of gods as juristic persons. | Quoted to demonstrate longstanding acceptance of idol’s legal personality. |
| Pramatha Nath Mullick v. Pradhyumna Kumar Mullick 52 IA 245; AIR 1925 PC 139 | Declares that a Hindu idol is a juristic entity with capacity to sue and be sued. | Cited to affirm an idol’s capability to be taxed through its managers. |
| CIT v. Ahmedabad Mill Owners’ Association AIR 1939 Bom 363 | Interprets “individual” as a human being distinct from other taxable units. | Discussed to show why the legislature retained “individual” and not “person.” |
| CIT v. Sodra Devi AIR 1957 SC 832 | Observes that “individual” can include statutory corporations; natural meaning may still be “male or female.” | Referred to illustrate breadth of the term “individual.” |
| CIT v. Salem District Urban Bank Ltd. AIR 1940 Mad 612 | Example where a corporation was treated as an “individual.” | Used to support expansive reading of “individual.” |
| CIT v. Bar Council, Madras AIR 1943 Mad 137 | Same principle as above. | Cited for analogous treatment of statutory bodies. |
| Sir Currimbhoy Ebrahim Baronetcy Trust v. CIT (1931) 5 ITC 484 (Bom) | Illustrates trusteeship entities falling within “individual.” | Referenced for consistency. |
| CIT v. Jogendra Nath Naskar AIR 1965 Cal 570 | Calcutta High Court decision holding that a Hindu deity can be an “individual.” | Served as supporting authority. |
| Sridhar Jiew v. ITO AIR 1966 Cal 494 | Holds that an idol, being a juristic entity, can be called an “individual.” | Relied upon to reinforce the conclusion. |
Court’s Reasoning and Analysis
The Supreme Court began by noting that the Calcutta High Court did not have the benefit of the later decision in Yogendra Nath Naskar. After reviewing extensive authority establishing that a Hindu deity is a juristic person capable of owning property, receiving income, and suing or being sued, the Court stated that there was no justification for excluding such income from taxation when the statutory language could encompass it.
The Court analysed the placement of the word “individual” in Section 3 of the 1922 Act. Earlier cases interpreting “individual” narrowly (as only a human being) were contrasted with decisions recognising corporations and other artificial persons within the term. The Court reasoned that Parliament had deliberately retained “individual” instead of “person” to avoid the broader reach of the latter, yet the term was still sufficiently wide to include artificial juridical persons such as a Hindu deity.
Finally, the Court observed that the question would not arise under the Income-tax Act, 1961, because Section 2(31) expressly includes “every artificial juridical person” within the definition of “person.”
Holding and Implications
Appeals Dismissed with Costs. The Supreme Court affirmed that a Hindu deity is an “individual” for purposes of assessment under the Indian Income-tax Act, 1922.
Implications: The ruling confirms earlier Supreme Court precedent and settles that income accruing to a Hindu idol is taxable in the hands of its shebait or manager as the representative assessee. No new precedent is set beyond reaffirming the existing legal position, and the issue is largely academic for periods governed by the 1961 Act, which expressly covers artificial juridical persons.
A. Alagiriswami, J.— The question that arises for decision in these appeals is whether a Hindu deity is an “individual” within the meaning of that word under the provisions of the Indian Income Tax Act, 1922. It arises out of the judgment of the High Court of Calcutta in a number of references under Section 66(1) of the Act. The facts necessary for the decision, in a short compass, are these: In the year 1820 one Smt Chitra Dassi executed an Ekrarnama making a gift of a piece of land for religious purposes. In 1842 she executed a will referring to the fact that she had earlier made the property debutter and directed her four sons, the executors, to perform the daily service of Sri Radhagobindjee. She died in 1855. In 1876 a suit was filed in the Calcutta High Court praying that the trust should be administered by the Court and a scheme prepared. Subsequently, there were a number of applications made from time to time and a number of orders were also made on them. In 1929 a scheme of administration was framed and a little later the Official Trustee of Bengal was appointed to be the trustee of the said debutter estate. After the Official Trustee took possession of the properties he was assessed in respect of the income of the debutter estate in the status of an “individual” under Section 41 of the Act. In respect of 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 construction of the relevant documents and the scheme sanctioned and 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 Assessment Years 1943-44 to 1951-52. Three questions finally came to be considered by the High Court:
“Q.1 Whether upon a proper construction of the relevant documents executed by Smt Chitra Dassi and the relevant schemes sanctioned and orders passed by the High Court, there was a trust in favour of the deity or whether there was a dedication of the properties to the deity?
Q. 2. Alternatively, if the dedication to the Thakur constitutes trust, is it a religious trust which did not enure to the benefit of the public?
Q. 3. Is the Thakur Radhagobindajee liable to assessment under the Indian Income Tax Act?”
2. On Question 1 the High Court held that upon a proper construction of the relevant documents executed by Chitra Dassi and the relevant schemes sanctioned and orders passed by the High Court, there was a dedication of the properties to the deity, but that there was no trust in the technical sense, that is to say, as understood in the English Law. In respect of the first part of the second question both parties before the High Court agreed that in that question the word “trust” did not mean a trust in the technical or the English sense. The High Court pointed out that it has been held that a dedication is a trust in the general sense within the meaning of the expression as used in Sections 4, 40 and 41 of the Income Tax Act and the word “trust” can be applied to Hindu endowments. On the second part of the question it was held that the endowment is a private religious trust and the documents creating it or confirming it grant no benefit to the members of the public, that an order made by the Calcutta High Court by which certain directions were given for feeding the poor, were the only instance in which a benefit is enured to the public. As regards the third question ,the High Court elaborately discussed whether the deity could be held to be an “individual” and held that the deity was liable to assessment under the Income Tax Act.
3. Before this Court the only point argued was whether the High Court was right in coming to the conclusion that the deity is an “individual”. When the High Court dealt with this question it did not have the benefit of the decision of this Court in Jogendra Nath Naskar v. CIT (1969) 1 SCC 555, (1969) 3 SCR 742, (1969) 74 ITR 33 wherein it was held that a Hindu deity falls within the meaning of the word “individual” in Section 3 and can be treated as a unit of assessment. Mr Chatterjee arguing for the appellant urged that that decision was wrong and should be reconsidered. We find ourselves in entire agreement with the decision of this Court referred to above. We shall, however, state our reasons within a short compass.
4. 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 has been so for a long time. In Maharanee Shibessouree Debia v. Mothooranath Acharjo (1869) 13 MIA 270 it was observed:
“The Talook itself, with which these jummas were connected by tenure, was dedicated to the religious services of the idol. The rents constituted, therefore, in legal contemplation, its property. The Sabait had not the legal property, but only the title of Manager of a religious endowment.”
In Prosunno Kumari Debya v. Golab Chand Baboo (1875) 2 IA 145 the above observations were cited with approval. In Manohar Ganesh v. Lakhmiram ILR (1888) 12 Bom 247 a Division Bench of the Bombay High Court observed:
“The Hindu law, like the Roman law and those derived from it, recognises, not only corporate bodies with rights of property vested in the corporation apart from its individual members, but also the juridical persons or subjects called foundations.… It is consistent with the grants having been made to the juridical person symbolized or personified in the idol.…”
The Madras High Court in Vidyapurna Tirtha Swami v. Vidyarani Tirtha Swami ILR (1904) 27 Mad 435 expressed the view:
“It is to give due effect to such a sentiment, widespread and deep-rooted as it has always been, with reference to something not capable of holding property as a natural person, that the laws of most countries have sanctioned the creation of a fictitious person in the matter, as is implied in the felicitious observation made in the work already cited: ‘Perhaps the oldest of all juristic persons is the God, hero or the saint’.”
In Pramatha Nath Mullick v. Pradhyumna Kumar Mullick 1925 LR 52 IA 245, AIR 1925 PC 139 the Privy Council observed:
“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. 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.”
The authorities thus amply establish that a Hindu deity is a juristic person capable of holding property.
5. Reference was made to the decision in CIT v. Ahmedabad Mill Owners' Association AIR 1939 Bom 363, (1939) 7 ITR 369 where Beaumont, C.J, held:
“‘Individual’ where first used, must mean human being, because 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 human beings’.”
Though in consequence of this decision the Income Tax (Amendment) Act, 1939 amended the words “association of individuals” into “association of persons”, the word “individual” being first of the six assessable units mentioned in Section 3 was retained and was not amended into “person”. It could not be changed into “person” for the obvious reason that the word “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 chosen, which would not carry with it the wider import of the word “person” and the word “individual” appears to have been chosen. In CIT v. Sodra Devi AIR 1957 SC 832, 1958 SCR 1, (1957) 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 the trustees of a Baronetcy Trust, incorporated by a Baronetcy Act. (See the decisions in CIT v. Salem District Urban Bank Ltd. AIR 1940 Mad 612, (1940) 8 ITR 269, (1940) 2 Mad LJ 160; CIT v. Bar Council AIR 1943 Mad 137, (1943) 11 ITR 1, (1942) 2 Mad LJ 782 and Sir Currimbhoy Ebrahim Baronetcy Trust v. CIT. (1931) 5 ITC 484 (Bom)) But Das, J., observed:
“...there is no difficulty whatsoever in my opinion, in giving the word ‘individual’ its natural meaning, that is, that the word means either a male or a female.”
But the Court in that case was not concerned with the problem whether the word “individual” can refer to a juridical entity. Mukharji, J., of the Calcutta High Court in CIT v. Jogendra Nath Naskar AIR 1965 Cal 570 held that a Hindu deity can be either an individual or a person or both. The same High Court in Shri Sridhar Jiew v. Income Tax Officer AIR 1966 Cal 494, (1967) 63 ITR 192 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”.
6. 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 law 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 naturally be taxed through its shebaits who are in possession and management 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.
7. The appeals are dismissed with costs.
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