Yogendra Nath Naskar v. Commissioner of Income-tax, Calcutta
Supreme Court of India, 18 February 1969, 3 judges, 1969 AIR 1089, 1969 SCR (3) 742, 1969 SCC (1) 555
The Court held that a Hindu deity is a juristic entity that falls within the word 'individual' in Section 3 of the Income Tax Act, 1922 and can be assessed to income tax through its shebaits.
Facts
By a will of 1899, Ram Kristo Naskar left properties as debuttar to two deities and appointed his two adopted sons as shebaits. The income was long assessed in the hands of the shebaits as trustees. For 1950-51 and 1951-52 the shebaits argued that there was no trust, and the Appellate Assistant Commissioner set aside those assessments. For 1952-53 and 1953-54 the Income Tax Officer then assessed the deities in the status of an individual through the shebaits. The Appellate Tribunal held that the shebaits could not be proceeded against under Section 41 because they had not been appointed by a court. At the Commissioner's instance the Tribunal referred the question to the Calcutta High Court, and the shebait appealed against its judgment on a certificate under Section 66A.
Questions before the Court
- Can a Hindu deity be treated as a unit of assessment under Sections 3 and 4 of the Income Tax Act, 1922, and be taxed through its shebaits?
- Is the word 'individual' in Section 3 of the 1922 Act confined to human beings?
What the Court held
- The referred question was reframed by deleting the words 'under the provisions of section 41' as superfluous, so that the question became whether the assessments on the deities through the shebaits were in accordance with law.
- Neither God nor any supernatural being is a person in law. But the idol, as the representative and symbol of the purpose indicated by the donor, is a legal person, and in that capacity the dedicated property vests in it.
- Since such a legal person may own property, sue for it, realise rent and defend it, there is no reason why it should not be taxed. A Hindu idol is a juristic entity capable of holding property and of being taxed through its shebaits.
- The word 'individual' in Section 3 is not restricted to human beings. It includes all artificial juridical persons, and a Hindu deity can be treated as a unit of assessment. Section 2(31) of the 1961 Act may be relied on as a Parliamentary exposition of the earlier Act. The appeals were dismissed.
Why it matters
The judgment holds that a Hindu deity is a taxable 'individual' under the Income Tax Act, 1922, assessable through its shebaits. It distinguishes the spiritual and legal aspects of the idol, locating legal personality in the idol as the embodiment of the donor's purpose, and accepts that later legislation may be looked at to construe an earlier ambiguous Act.
In the Court's words
Copied from the official judgment; each passage links to its page.
“Neither God nor any supernatural being could be a person in law. But so far as the deity stands as the representative and symbol of the particular purpose which is indicated by the donor, it can figure as a legal person. The true legal view is that in that capacity alone the dedicated property vests in it.”
“Our conclusion is that the Hindu idol is a juristic entity capable of holding property and of being taxed through its shebaits who are entrusted with the possession and management of its property.”
“It is clear that the word ’individual’ in section 3 of the 1922 Act includes within its connotation all artificial juridical persons and this legal position is made explicit and beyond challenge in the 1961 Act.”
Provisions interpreted
- Section 3, Indian Income Tax Act, 1922
- Section 2(31), Income Tax Act, 1961
Case and bench
- Parties
- Yogendra Nath Naskar v. Commissioner of Income-Tax, Calcutta
- Case
- Civil Appeals Nos. 690 to 694 of 1968
- Decided
- 18 February 1969
- Bench
- V. Ramaswami, J.C. Shah, A.N. Grover
- Opinions
- The Judgment of the Court was delivered by Ramaswami, J. No separate opinion appears in the file.
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