SWAMI SATCHITANAND Vs. INCOME TAX OFFICER SECOND ADDL
LAWS(KER)-1963-7-36
HIGH COURT OF KERALA
Decided on July 10,1963

SWAMI SATCHITANAND Appellant
VERSUS
The 2nd Addl. Income Tax Officer, Kozhikode Respondents


Cited Judgements :-

SWAMI SATCHITHANAND VS. ADDITIONAL ITO KOZHIKODE [LAWS(KER)-1966-3-4] [REFERRED TO]
STATE OF PUNJAB VS. AMOLAK RAM KAPOOR [LAWS(P&H)-1990-7-37] [REFERRED TO]
SOMESWARA SWAMY VARI DEVASTANAM VS. DASAM SURYANARAYANA [LAWS(APH)-2003-11-28] [REFERRED TO]
PRAFULLA KUMAR ROUTRAY VS. CERTIFICATE OFFICER [LAWS(ORI)-1990-10-22] [REFERRED TO]
BABY MATHEW VS. AGRICULTURAL INCOME TAX OFFICER [LAWS(KER)-1994-2-48] [REFERRED TO]
DIRECTOR OF INCOME TAX VS. APARNA ASHRAM [LAWS(DLH)-2012-2-538] [REFERRED TO]
ASHOK SITARAMJI THAKARE VS. KU. MANGALA D/O LAXMANRAO BODHANKAR [LAWS(BOM)-2021-8-15] [REFERRED TO]


JUDGEMENT

- (1.)The question posed in this Original Petition for decision is whether assessments made an a Society, the Shrishaila Industrial and Spiritual Colony Charities, for the years 1950-51 to 1956-57 stylling the Society as an 'Association of persons' would impose any personal liability on the members of that Society to pay the tax imposed. The petitioners were members of the Society before 1-11-1957. The petitioners contend that there cannot be any personal liability to pay tax imposed on a Society since the members of the Society have no personal liability to discharge the debts of the Society. This Society has been registered under the Societies Registration Act, 1860, and it seems to me that S.6 and 8 of that Act reading as under are relevant:
"6. Every society registered under this Act may sue or be sued in the name of the president, chairman, or principal secretary, or trustees, as shall be determined by the rules and regulations of the society, and, in default of such determination, in the name of such person as shall be appointed by the governing body for the occasion:

Provided that it shall be competent for any person having a claim or demand against the society, to sue the president or chairman, or principal secretary or the trustees thereof, if on application to the governing body some other officer or person be not nominated to be the defendant."

"8. If a judgment shall be recovered against the person or officer named on behalf of the society, such judgment shall not be put in force against the property, movable or immovable, or against the body of such person or officer, but against the property of the society.

The application for execution shall set forth the judgment, the fact of the party against whom it shall have been recovered haying sued or having been sued, as the case may be, on behalf of the society only, and shall require, to have the judgment enforced against the property of the society."

By S.6, the Society can either sue or be sued in the name of its president. Chairman, principal secretary or the trustees as shall be determined by the rules and regulations of the Society, and S.8 says, that if a judgment shall "be recovered against the person or officer named on behalf of the society, such judgment shall not be put in force against the property, movable or immovable, or against the body of such person or officer, but against the property of the society.

(2.)S.14 of the Act is also of some assistance which provides that on dissolution, no member of the Society shall receive any profits. From these provisions in the statute, it appears to me to be clear that the members of a society are not personally liable for the debts of the Society. The Society is a legal entity. It is capable of suing and being sued as such. A tax imposed on a Society, though it has been styled as an 'Association of persons' is still a tax on the Society and not on its members. It is not possible, therefore, to say that the tax imposed on a Society is a tax imposed on the members of the Society.
(3.)But counsel on behalf of the Department invited my attention to S.3 of the Indian Income Tax Act, 1922, and contended that the Income Tax law does not recognise a Society, that it only contemplates assessments on certain units -- the individual, the company, the undivided Hindu family, a firm and an Association of persons, -- and for the purpose of Income Tax law, I must consider only the 'Association of Persons' which is the status attributed to the Society under the various assessment orders. The argument is appealing, but it would, I think, amount to ignoring the provisions of the statute which has created the Society. That statute having negatived any personal liability on the part of the members even in the case of a judgment recovered against the Society, it is difficult for me to visualise that the Indian Income Tax Act purported to override these statutory provisions. There is no specific provision in the Indian Income Tax Act to that effect.
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