S.K. Mal Lodha J. - (1.) AT the instance of the Commissioner of Income-tax, the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur ("the Tribunal" herein), has referred the following questions for the opinion of this court: "(1) Whether, on the facts and in the circumstances of the case, there is any income from any source assessable in the hands of the assessee known as Shri Ramdeora Samadhi, Ramdeora, for the assessment year 1973-74? (2) Whether, on the facts and in the circumstances of the case, there exists a body of individuals representing Shri Ramdeora Samadhi on whom the impugned assessment could be made ?"
(2.) THESE questions are said to arise out of the order dated June 28, 1979, passed in I.T.A. No. 418/JP/1977-78 by the Tribunal. The assessment year involved is 1973-74. Shri Ramdeoji was the local Ruler of the area which is part of Jodhpur and Jaisalmer Districts of Western desert area of Rajasthan. He was a very pious person. The events during his life Considerably influenced him. Having led a very eventful life, he (Shri Ramdeoji) announced that he would go into meditation and never come back out of it. It is said that on the 11th day of Preduman of Bhadrapad, 1515, he Went into meditation and never came back out of it. Before going into meditation, Shri Ramdeoji gave the following directions to his sons and descendants: "(i) the place of meditation should be maintained ; (ii) at the place of meditation a white flag should be hoisted and a flame should be lit continuously ; (iii) that the clan of Tanwar Rajputs to share the presents of food offered at the Samadhi or the place of burial and share the offerings equally amongst themselves; and (iv) on the day of meditation and one day earlier, mela or a congregation of the devotees should be held." Since then, that place where Shri Ramdeoji went into meditation and never came back is maintained by the clan of Tanwar Rajputs. He was considered by the local people as an incarnation of God. Large quantities of articles of food were also received which were distributed amongst the descendants according to the formula devised by them. Offerings are made at the place where the Samadhi of Ramdeoji is situate. The amount collected is known as "Jhari" account. During the relevant previous year, it is said that at the time of the first distribution, there were 367 members in the clan and at the end of the year, the number became 400. This was on account of the fact that births and deaths had taken place which resulted in change in the number of beneficiaries of the recipients. The Income-tax Officer by his order dated September 13, 1976, assessed the income of Ramdeo Samadhi (say) at Rs. 2,09,893. The assessment was made by the Income-tax Officer on the following grounds: "That offerings in question were received jointly by several persons represented by five heads of Dharas and then distributed amongst various members and so the income is assessable in the hands of the joint entity represented by five heads of clans (Dharas) in the status of a body of individuals." The assessee went in appeal. The Appellate Assistant Commissioner in his order dated July 31, 1977, recorded the following findings : "(1) that there is no income from any source; (2) that there is no body of individuals on whom an assessment could be made; and (3) that the five persons (five heads of Dharas) on whom the assessment has been made do not constitute a body of individuals known as 'Shri Ramdeo Samadhi or descendants of Shri Ramdeoji'." In view of the aforesaid findings, the Appellate Assistant Commissioner annulled the assessment by his order dated March 31, 1977. The Department went in further appeal before the Tribunal. The Tribunal by its order dated June 28, 3 979, affirmed the findings of the Appellate Assistant Commissioner and concurred with the conclusion arrived at by the Appellate Assistant Commissioner that the receipt in question was not an income liable to be taxed under the Act. It also, in agreement with the Appellate Assistant Commissioner, found as under : "(1) that there was no body of individuals on whom an assessment could be made; and (2) that the five persons on whom the assessment has been made do not constitute a body of individuals known as Shri Ramtleoji or descendants of Shri Ramdeoji. " It, therefore, dismissed the appeal of the Revenue. An application under Section 256(1) of the Act was filed by the Commissioner of Income-tax and the aforesaid questions have been referred to us for our opinion.
(3.) WE have heard Mr. B.R. Arora, learned counsel for the Revenue, and Mr. Rajesh Balia assisted N.L. Bissa and carefully considered the order dated September 13, 1976, of the Income-tax Officer, order dated March 31, 1977, of the Appellate Assistant Commissioner and the order dated June 28, 1979, of the Tribunal. Question No. 1: Under this question, we are called upon to determine whether during the relevant previous year, Shri Ramdeo Samadhi, Ramdeora, had any income from any source which can be taxed in the hands of the assessee (Shri Ramdeo Samadhi, Ramdeora). We have already mentioned that we are concerned with the assessment year 1973-74. Income has been defined in Section 2(24) of the Act. It is merely an inclusive definition and various types have been enumerated. It may be stated that Sub-clause (ii)(a) in Section 2(24) was inserted by the Finance Act, 1972, with effect from April 1, 1973, and Sub-clauses (iva) and(ix) were inserted by the Finance (No. 2) Act, 1980, with effect from April 1, 1980, and by the Finance Act, 1972, with effect from April 1, 1972, respectively. We are concerned with the definition of income as contained in Section 2(24) at the relevant time. As income has not been defined as such in the Act, we may notice the judicial pronouncements in which the connotation of the term "income" has been considered. In CIT v. Shaw Wallace & Co. [1932] 2 Comp Cas 276, 280; AIR 1932 PC 138, 140, the word "income" has been examined and considered. It was observed therein as under : "Income in this Act connotes a periodical monetary return 'coming in' with some sort of regularity, or expected regularity, from definite sources. The source is not necessarily one which is expected to be continuously productive, but it must be one whose object is the production of a definite return, excluding anything in the nature of a mere windfall. Thus income has been likened pictorially to the fruit of a tree, or the crop of a field. It is essentially the produce of something, which is often loosely spoken of as 'capital'. But capital, though possibly the source in the case of income from securities, is in most cases hardly more than an element in the process of production ?" The same ingredients have been repeated by the Privy Council in Raja BejoySingh v. CIT [1933] 1 ITR 135(PC), Maharajkumar Gopal Saran v. CIT [1935] 3 ITR 237 (PC) and CAT v. Chunilal B. Mehta [1938] 6 ITR 521 (PC). In Raja Bahadur Kamakshya Narain Singh of Ramgarh v. C1T [1943] 11 ITR 513 (PC), it is said that income is not necessarily the recurrent return from a definite source, though it is generally of that character. From the aforesaid decisions of the Privy Council, it appears that the ingredients of "income" are : (i) it must be a periodical monetary return, (ii) coming in with regularity or expected regularity, (iii) from definite sources, and (iv) excluding a receipt in the nature of a mere windfall. ;