BHAGWAN RADHA KRISHNA JI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under section 66(1) of the Income-tax Act. The questions referred to this court for its opinion are :

(2.) THE facts giving rise to the reference are : that one Jwala Sahoy was the owner of considerable properties, zamindari and house property and also immovable property. On January 3, 1928, he executed a will in respect of his entire property. Some of these properties were dedicated to the deity, Sri Bhagwan Radha Krishna Ji Maharaj. By that will he also made provision for annual payments from the income of the property to some of his heirs. It appears that the properties which were dedicated to Sri Bhagwan Radha Krishna Ji Maharaj were non-zamindari properties. So far as the zamindari properties were concerned they were dedicated to various other deities mentioned in the will. It was provided in the will that the payment of annual amounts to the heirs shall be out of the income of the immovable properties bequeathed to the various deities. It was further provided as follows :

(3.) DURING the assessment year 1944-45 the allowances payable to the beneficiaries out of the income of the dedicated property were claimed as deductions under section 4(3)(i) of the Income-tax Act and exempt from the charge of tax. Alternatively the claim was made that the allowances paid to the beneficiaries should not be assessed along with the dedicated property and should be allowed as deduction in the computation of income. It may be stated that the assessment was sought to be made against Bhagwan Radha Krishna Ji Maharaj in the status of an individual. The claim made on behalf of the assessee on the two grounds mentioned above was overruled by all the authorities below. The view taken by them was that for the applicability of section 4(3)(i) of the Income-tax Act it was necessary, (1) that the property from which the income arose was held under trust or other legal obligation, (2) that the trust should be wholly for religious and charitable purposes and (3) that the income in respect of which the claim was made should be applied or accumulated for application to such religious or charitable purposes and in the case of property which was held in trust or other legal obligation. It was a simple bequest of all the property of the testator in favour of number of deities including the assessee. It has not been argued before us that the view taken by the authorities below on this point is in any way erroneous.