YOGENDRA NATH NASKAR vs. COMMISSIONER OF INCOME-TAX, CALCUTTA

CIVIL APPEAL No. 690/1968Supreme Court[1969] 3 S.C.R. 74218 February 1969Bench: 3 JudgesAuthor: J.C. SHAH, V. RAMASWAMI, A.N. GROVER NATH NASKAR10 pages
AI SummaryDismissed

What were the facts?

The assessee, Yogendra Nath Naskar, along with his deceased brother Hem Chandra Naskar, were shebaits (managers) of two Hindu deities, Sri Sri Iswar Kubereswar Mahadeb Thakur and Sri Sri Anandamayee Kalimata. Properties were dedicated to these deities. For assessment years 1950-51 and 1951-52, assessments were made in the hands of the shebaits as trustees, but these were set aside by the Appellate Assistant Commissioner on the ground that the status of the assessees had not been correctly determined. For assessment years 1952-53 and 1953-54, the Income-tax Officer initiated proceedings and completed assessments on the deities in the status of an individual, through the shebaits. The claim for exemption under the proviso to section 4(3)(i) was rejected. The Appellate Assistant Commissioner upheld these orders. The assessee appealed to the Appellate Tribunal, which referred a question of law to the Calcutta High Court.

What did the Supreme Court hold?

The Supreme Court held that a Hindu idol is a juristic entity capable of holding property and being taxed through its shebaits. The Court reasoned that the word 'individual' in section 3 of the Indian Income Tax Act, 1922, is wide enough to include artificial juridical persons. This interpretation is supported by the definition of 'person' in section 2(31) of the Income Tax Act, 1961, which explicitly includes 'every artificial juridical person'. The Court found that the language of the 1961 Act could be relied upon as a parliamentary exposition of the earlier Act, clarifying any ambiguity. Therefore, a Hindu deity falls within the meaning of 'individual' under section 3 and can be treated as a unit of assessment. The Court dismissed the appeals, upholding the assessments on the deities through their shebaits.

What were the issues?

1. Whether a Hindu deity can be treated as a unit of assessment under section 3 of the Indian Income Tax Act, 1922. The assessee contended that deities were not chargeable to tax under section 3, and that section 41 of the Act did not apply as the shebaits were not appointed by or under any court order, making the assessments invalid. They argued that once the trustee status was given up, the department could not assess the shebaits under section 41. The revenue contended that the assessments were made on the deities as individuals, not under section 41, rendering section 41 superfluous. The Tribunal initially considered section 41 but found it inapplicable. The High Court modified the referred question to: 'Whether on the facts and in the circumstances of the case, the assessments on the deities through the shebaits were in accordance with law.'

Which sections of the Income-tax Act were involved?

Section 3,Section 4(3)(i),Section 41,Section 66(1),Section 2(9),Section 2(31)

AI-generated summary — verify with the full judgment below

YOGENDRA NATH NASKAR v. COMMISSIONER OF INCOME-TAX, CALCUTTA February 18, 1969 A {I. C. SHAH, V. RAMASWAMI AND A. N. GROVER, JJ.) 8 Income-tax A.ct (11 of 1922)-Hindu Deity-If can be tax.<d througlt shebtlits.

Finding that the assessments of the income from the properties of two Hindu. deities in the hands of its shebaits as trustees were set aside on th~ footing that the status of the assessees had not been correctly determined, the Income-tax Officer initiated proceedings for the assessments again!ft th~ shebaita of the deities and c:Ompleted the assessments on the deities in th!! statuo of an individual and through the shebaits. On the question wh<ther tlae auessments on the deities through the i;hebaits were in accordance with law, HELD : The Hindu idol is a juristic entity capable of holding property and of being taxed through its shebaits who are entrusteJ with the pos- session and management of its proper.ty. A Hindu deity fell within the meaning of the word 'individual' under s. 3 of the Act ;,.ind couid be treated as a unit of assessment undl!r the section and was capable of being taxed through its shebaits.

Tne word 'individual' in s. 3 of the 1922

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