- (1.) These six appeals raise a common question as to the liability of the assessees to pay income-tax in respect of certain receipts known as 'Annadan' during the assessment years 1946-47 to 1951- 52. The assessees are a Hindu Undivided family and engage themselves as 'Pandas' or priests who assist devotees in performing worship and ceremonies especially connected with pilgrimage to the temple of Jagannath at Puri, and for services rendered by them they receive certain emoluments which are called 'Dakshina' or 'Pranami It is not disputed that amounts received as Pranami are profits or gains of business or vocation carried on by the assessees and liable to income-tax. Besides Pranami the assessees collect form the pilgrims amount of money known as Annadan under writings executed by the pilgrims. In these appeals the assessees claim that those amounts are not liable to be included in their taxable income, because they are exempt under Ss. 4(3) (i) and (ii) of the Indian Income-tax Act. The assesses claim that "their estate originally and virtually represents the Guru Gadi created and established for the main purpose of propagating the cult of Lod Jagannath in different parts and among different peoples embracing Hindu religion" and the offerings known as Annadan received by them on condition utilising the same for the Bhog (food offering) in the temple of Jagannath are exempt from liability to pay income-tax because, the Annadan offering are income derived from property held under a trust and in any event, they are income of a religious institution derived from voluntary contributions and applicable solely to religious purposes. In support of their plea the assessees rely upon the Annadan Patras signed by the pilgrims, in the following form : "Written by.......of village........Thana .....etc. Corning to the sacred place of Thana Sri Jagannathji and having the Darsan, I pay upto .....(name of Panda), Gaudbad Sahi, Puri Town for the Bhog of Sree Jagannathji, Rs..........The Pandaji will utilise this amount for the Bhog of Jagannathji and the Prasad will be enjoyed by himself and the people of the district to which I belong. I, .......signed this Atika Annadan". The amounts received or collected from the pilgreims under Annadan Patras (which were also styled as Patras) were credited in an account known as Annadan Account, and expenses of "food offerings" to the deity were defrayed out of that fund. The assessees claim that out of the unspent balance they purchased property in the name of the deity Jagannath.
(2.) The Income-tax Officer held that Annadan received by the assessees was not exempt from liability to tax, for in his view there was no valid trust in writing and 'there was no authority to enforce the obligation' that the amount received by the assessees be spent for religious and charitable purposes, that the assessees were not shebaits appointed under a writing and the income sought to be taxed was in the nature of voluntary contributions and was not derived from property held under a trust or other legal obligation In appeal the Appellate Assistant Commissioner Cuttack Range, confirmed the order. He held that the assessees as Pandas held a trust fund in their charge every year from which no income was received but a part of the fund was spent by them for the purpose for which the trust was created and the balance was appropriated by them to their own use and that they did not derive income from voluntary contributions applicable solely of religious or charitable purposes. The Income-tax Appellate Tribunal confirmed the order observing : "Except the bare assertion of the assessee before us, there is no evidence to show that the pilgrims understood either the character or the implication of the document they were signing. The assessee has not shown either that he gave receipts to the pilgrims indicating his trustee position and his undertaking to employ the receipts for the purposes of the supposed trust. Out of these funds collected, a major portion is spent upon loans to pilgrims, charity, expenses for feeding the pilgrims and other items. x x x x This itself as a fact shows that the money paid by the pilgrims was not used for the exclusive purpose of offering Bhog. x x x x x Having regard to the way in which the pilgrims are attracted, brought to Puri treated there, taken to the temple, fed and ultimately induced to make a payment, there is only one conclusion possible that the business of pilgrim traffic was carried on by the assessee. The facts do not show that any trust was intended or created by the pilgrims. x x x x x" The Tribunal also observed that the assessees were not an institution and they were not exempt under S. 4 (3) (ii) of the Act from liability to pay income-tax, especially because the objects for which Annadan fund was to be expended were not public objects, and the payments made by the pilgrims as Annadan could not be said to be for the benefit of the public or for charity.
(3.) The Tribunal declined to submit a statement of the case on question of law alleged to arise out of their order because in their view in disposing of the appeal it was found that "no trust was intended to be created as alleged by the assessees, and that the assessees had not proved that they were under any obligation to devote the income to any particular use." The assessees then moved the High Court for an order under S. 66 (2) of the Indian Income-tax Act calling upon the Tribunal to state the case. The High Court directed the Tribunal to state the following point of law arising out of the case and to refer it for decision : "Whether, on the facts of this case, the amounts received by the assessee under the Atka Patra, are liable to tax".;