DEITY RAGHUBAR JEW TRUSTEE RAJA S P SINGH DEO Vs. COMMR OF INCOME TAX

JUDGEMENT

(1.) a fresh assessment against each group of deities installed at Banares, Dalijora and Kashipore. When the matter was taken in appeal to the Appellate Assistant Commissioner he directed that the deities installed at Banares, Dalijora, and Kashipore should be treated as three "association of persons" and the assessment should be at the maximum rate under Section 41(1), Income-tax Act. The reason given by the Appellate Assistant Commissioner was that the trust deeds did not specify the share of each deity, in the income of the properties. The matter was taken in appeal on behalf of the Trustee to the Appellate Tribunal.

(2.) It was claimed on behalf of the Trustee that the trust income is exempt from income-tax under Section 4(3)(i) of the Act. This argument was rejected by the Tribunal. It was also argued on behalf of the trustee that there was no warrant for imposing the maximum rate under the proviso to Section 41(1). The Tribunal took the view that the trust was in favour of named deities and though their shares were not defined in the. trust deeds it must be taken that the deities have been granted equal shares in the income of the properties.

(3.) In support of this proposition the Tribunal referred to -- "Jogeswar Narain v. Ramchandra Dutt'. 23 Ind App 37 (PC) (A). The Tribunal therefore directed that there should be separate assessment of the trustee as regards the income of each of the deities of which he is the trustee. The matter was then taken up to the High Court on a reference under Section 66, Indian Income-tax Act. The High Court held that the order of the Tribunal was correct and that there should be separate assessment, of the trustee as regards the income of each cf the deities. The judgment of the High Court is reported in -- 'Jyotishwari Kalimata v. Commr. of Income-tax, B. and O.', AIR 1947 Pat 178 (B). The High Court expressed the opinion that although the shares of the deities were not defined in the trust deeds still the deities should be treated in the eye of law to have equal shares in the trust properties, and, therefore, the income of the trust properties in the hands of the trustee was not liable to be assessed at a maximum rate under the first proviso to Section 41(1) but the assessment of the trustee should be at the rate applicable for the individual income of each of the deities in each group. After the decision of the High Court, proceedings were started by the income-tax authorities under Section 34 in respect of each of the ten deities. It was contended before the Appellate Assistant Commissioner that the proceedings were started after a lapse of four years prescribed by Section 34, and the assessments were, therefore, illegal.