THE OFFICIAL TRUSTEE OF WEST BENGAL FOR THE TRUST OF CHITRA DASSI vs. C.L.T WEST BENGAL, CALCUTTA

CIVIL APPEAL No. 2358/1968Supreme Court[1974] 2 S.C.R. 58304 December 1973Bench: 5 JudgesAuthor: A.N. RAY, HANS RAJ KHANNA, KUTTYIL KURIEN MATHEW, A. ALAGIRISWAMI, P.N. BHAGWATI OD5 pages
AI SummaryDismissed

What did the Supreme Court hold?

The Supreme Court held that a Hindu deity falls within the meaning of the word 'individual' in Section 3 of the Income-tax Act, 1922, and can be treated as a unit of assessment. The Court reasoned that a Hindu deity is a juristic person capable of holding property, receiving income, and suing or being sued. Therefore, its income should not be outside the ambit of taxation. The deity would be taxed through its shebaits, who manage its property. The Court affirmed its earlier decision in Jogendra Nath Naskar v. Commissioner of Income-tax. The Court noted that this issue is unlikely to arise under the Income-tax Act, 1961, which defines 'person' to explicitly include 'every artificial juridical person'. The appeals were dismissed. The Court did not expressly leave any issue undecided.

What were the facts?

The Official Trustee of West Bengal, as trustee of a debutter estate dedicated to the deity Sri Radhagobindajew, was assessed for income tax in the status of an 'individual' for assessment years 1939-40 to 1951-52. The debutter estate was created through an Ekrarnama and a will by Smt. Chitra Dassi. The Official Trustee took possession of the properties after being appointed trustee in 1929. The High Court, in relation to assessment years 1939-40 to 1942-43, held that the property was a religious trust. For subsequent years, the High Court considered three questions, including whether the deity was liable to assessment under the Indian Income-tax Act. The High Court concluded that the deity was an 'individual' and thus liable for assessment.

What were the issues?

1. Whether, upon a proper construction of the relevant documents and court orders, there was a trust in favour of the Deity or a dedication of properties to the Deity? (Mixed law and fact, concerning the nature of the endowment under Section 3 of the Income-tax Act, 1922). 2. Alternatively, if the dedication constituted a trust, was it a religious trust that did not enure to the benefit of the public? (Mixed law and fact, concerning the nature of the trust). 3. Is the Thakur Radhagobinda Jew liable to assessment under the Indian Income-tax Act? (Mixed law and fact, concerning the assessable status of the deity under Section 3 of the Income-tax Act, 1922). Assessee's contention: The assessee argued that the High Court erred in concluding that the deity is an 'individual' and that this decision should be reconsidered. The assessee conceded that if the term had been 'person', the deity would qualify as a juristic person. Revenue's contention: The judgment does not explicitly record the revenue's arguments, but it addresses the question of the deity's status as an 'individual' in response to the assessee's challenge.

Which sections of the Income-tax Act were involved?

Section 3,Section 41,Section 66(1),Section 66(2),Section 2(31)

AI-generated summary — verify with the full judgment below

0 )) THE OFFICIAL TRUSTEEOFWESTBENGAL FOR THE TRUST OF CH!TRA DASSI v. 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" bec

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