P. Subramonian Poti, J. - The Guruvayoor temple is a famous shrine belonging to the Hindu denomination, attracting pilgrims from all over India. The temple has income from extensive properties possessed by it and also income by way of grant from the Government. Besides this, amounts realised by way of fines, penalties imposed and recoveries made under the Guruvayoor Devaswom Act also go to augment the income of the temple. The Devaswom also receives substantial amounts of income by way of offerings and contributions from members of the denomination, from local authorities and other institutions. Till recently the Zamorin Raja of Calicut was in management of the temple properties and the endowments. But from 9-3-1971 the temple is being managed by the Guruvayoor Devaswom Managing Committee under the Guruvayoor Devaswom Act, 1971.
2. It is said that the Devaswom was not in receipt of any category of income which obliged to it submit returns under the Income-taxg, 1961, and it was not therefore, submitting returns. But when the Finance Act, 1972 came into force the Devaswom was called upon to file such return and that is said to have on the basis of the amended definition of; income in S. 2(24)(iia) of the Income-tax Act, S. 2(24) of the Income-tax Act defines income as including profits, gains, dividends, etc. Cl. (iia) was introduced in the sub-section by the Finance Act and that reads :
'(iia) Voluntary contributions received by a trust created wholly or partly for charitable or religious purposes or by an institution established wholly or partly for such purposes, not being contributions made with a specific direction that they shall form part of the corpus of the trust or institution.'
It may not be necessary to refer to the explanation that follows for the purpose of this petition. The Income-tax Department evidently took the view that voluntary contributions received by the Guruvayoor Devaswom after 1-4-1973 were to be treated as income of the Devaswom and therefore the Devaswom was under an obligation to submit returns. Exts. P-1 and P-2 evidence this stand taken by the Income-tax Officer having jurisdiction over the area. It is then that the petitioner the Guruvayoor Devaswon, approached this Court evidently with a view to prohibit further proceedings pursuant to Exts. P1 and P2. The Devaswom seeks orders from this Court striking down the definition in Section 2(24) to the extent voluntary contributions falling within clause (iia) also is defined as income. The Income-tax Department has taken the stand that the section is competent and the proceedings calling upon the petitioner to submit returns are also equally competent.
3. Every religious denomination can claim protection is respect of the four matters mentioned in Article 26 of the Constitution of India Clauses (a) and (b) of Article 26 deal with the rights of a religious nature, namely the right to establish and maintain institutions for religious and charitable purposes and administer its own affairs in matters of religion. The only restriction is that this right is subject to public order, morality and health. This is otherwise not liable to be restricted even by laws made by the legislatures of the country. This Article envisages also rights of a secular nature referred to in clauses (c) and (d) of the Article and they are the right to own and acquire movable and immovable property and the right to administer such property in accordance with law. That these rights are subject to the law of this country is indicated by the expression in accordance with law and the Full Bench of this Court in Narayanan Nair vs. State of Kerala (1970 KLT 659) held that the words 'in accordance with law' occurring at the end of clause (d) qualifies not only that clause but clause (c) too. Therefore, the right to own and acquire movable and immovable properties and the right to administer such properties are subject to the law made by competent legislature.
4. The complaint of the Guruvayoor Devaswom appears to be that the right guaranteed to the Hindu denomination to which the Devaswom belongs-to own and acquire property and to administer it is sought to be infringed by defining income in the Income-tax Act in such a manner as to rope in the receipts of the Devaswom which, but for such definition would not be income and which therefore will not be liable to be taxed. In view of such infringement it is said that the impugned provision cannot be sustained in law, for, any law must not only be one which can be justified by reference to the source of the power to enact it but must also not infringe any fundamental right guaranteed in Part III of the Constitution.
5. It may be necessary to refer to the scheme in relation to the amendment of the term income by the Finance Act, 1972. Section 11 of the Income-tax Act provided for exclusion of certain items of income form the total income of the previous year of the person in receipt if such income and sub-section 1 (a) of that Section excluded -
'income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India'.
and sub-section (b) similarly dealt with income derived from property held under trust in part only for such purposes. This exclusion concerned only income derived from property held under trust and the exclusion would apply in case the income was applied for charitable or religious purpose. Sub-section (2) provided for exclusion even where there was accumulation of such income subject to certain safeguards S. 11 as it stood did not apply to a case of income by way of gifts or contributions or offerings. When S. 2(24) was amended by Finance Act of 1972, S. 12 was also amended by the same Finance Act, S. 12 as it stood prior to its amendment read :
'12. Income of trusts or institutions from voluntary contributions (1) Any income of a trust for charitable or religious purposes or of a charitable or religious institution derived for voluntary contribution and applicable solely to charitable or religious purposes shall not be included in the total income of the trustees or the institution, as the case may be.
(2) Notwithstanding anything contained in sub-section (1), where any such contributions as are referred to in sub-section (1) are made to a trust or a charitable or religious institution buy a trust or a charitable or religious institution to which the provisions of S. 11 apply, such contributions shall in the hands of the trust or institution receiving the contribution, be deemed to be income derived from property for the purposes of that section and the provisions of that section shall apply accordingly.'
S. 12 as amended by Finance Act, 1972 reads as follows :
'12. Income of trusts or institutions from contributions :- Any voluntary contributions received by a trust created wholly for charitable or religious purposes or by an institution established wholly for such purposes (not being contributions made with a specific direction that they shall form part of the corpus of the trust or institution shall, for the purposes of S. 11 be deemed to be income derived from property held under trust wholly for charitable or religious purposes and the provisions of that section and S. 13 shall apply accordingly.'
S. 12 A was added and that reads :
'12A. Conditions as registration of trusts, etc. The provisions of S. 11 and S. 12 shall not apply in relation to the income of any trust or institution unless the following conditions are fulfilled, namely :-
(a) the person in receipt of the income has made an application for registration of the trust or institution in the prescribed form and in the prescribed manner to the Commissioner before the 1st day of July, 1973, or before the expiry of a period of one year from the date of the creation of the trust or the establishment of the institution, whichever is later :
Provided that the Commissioner may in his discretion, admit an application for the registration of any trust or institution after the expiry of the period aforesaid;
(b) where the total income of the trust or institution as computed under this Act without giving effect to the provisions of S. 11 and S. 12 exceeds twenty-five thousand rupees in any previous year, the accounts of the trust or institution for that year have been audited by an accountant as defined in the Explanation below sub-section (2) of S. 288 and the person in receipt of the income the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed.'
By reason of such amendment of the Income-tax Act voluntary contributions received by a trust wholly for charitable or religious purpose or by an institution established wholly or for such purposes was to be deemed to be income derived from the property held in trust within the meaning of S. 11 of the Income-tax Act. That meant that in respect of such income also there was exclusion provided the income was used wholly for charitable or religious purposes and there were all those safeguards in regard to accumulated income envisaged in sub-section (2) of S. 11 of the Act. The consequence of the amendment to S. 2(24) of the Income-tax Act and S. 12 thereof by Finance Act 1972 was that while voluntary contributions received by trusts created wholly or partly for charitable or religious purposes or by an institution established wholly or partly for such purposes, not being contributions made with a specific direction that they should form part of the corpus of the institution, were treated to be income of such trust, exclusion of such income could be claimed by the trust if the condition mentioned in S. 11 in regard to income from property held by similar trusts would be applicable. If the income was not applied as envisaged in S. 11 or in case the accumulation was not in accordance with S. 11(2), it was liable to be brought within the net of taxation. That, in short, is the prejudice to the Guruvayoor Devaswom indicated by the petitioner in the original petition.
6. The issue arising for decision appears to be quite simple. It is not that any tax has been imposed as such on the amounts received by way of voluntary contributions by the Devaswom. Voluntary contributions have been placed on a par with income received by a similar trust from its property and that means that it is liable to be taxed in case it is not applied for purposes which entitles the trust to claim exclusion of such amount from its income. This, it is said, amounts to imposition of a pecuniary liability on the Devaswom by way of tax and that it is contended, is beyond the power of the legislature.
7. I have already indicated that the guarantee in Articles 26(c) or (d) of the Constitution to own and acquire movable and immovable property and to administer such property is not absolute and is to be only in accordance with law. I need not go into that question further since the question has been considered by a Full Bench of this Court as indicated earlier. It is said that even so, any law which imposes a tax is one operating as an infringement of the freedom under Article 26 of the Constitution, for according to learned counsel Sri Radhakrihna Menon, taxation being by its very nature one which would destroy or tend to destroy or annihilate property it would be an objectionable restriction or limitation.
8. A citizen of India is guaranteed certain fundamental rights under Art. 19 of the Constitution and one such envisaged in Art. 19 (1) (f) is to acquire, hold and dispose of property. This, of, course, is subject to Article 19(5) of the Constitution. This guarantee is not available to a religious denomination, as that would not satisfy the definition of a citizen. The Constitution intended to confer freedom on religious denominations in order to protect them from inroad by legislatures. Such guarantee in regard to secular matters extend to the right to own and acquire property and also the right to administer such property. Any measure concerning imposition of tax cannot be said to affect the right to administer. Art. 26 (d) envisages only the right to manage and any interference with such right would only be acts which would directly hamper management by the religious denomination. Tax law would not be one such. But it is said that the right to own or acquire property would be affected by a law which compels the religious denomination to part with a part of its property and therefore such law would be objectionable as rendering the guarantee ineffective or illusory.
9. A full Bench of this Court in Narayan Nair vs. State of Kerala (1970 K.L.T. 659) (F.B.) has pointed out the anomalies that may result by the construction that the freedom guaranteed under Article 26(c) is absolute and in this context it may be useful to refer to the following paragraphs in the judgment of the Full Bench.
'26. If the right guaranteed by clause (c) were absolute, in the sense that it is subject only to public order, morality and health, than we are afraid would, as pointed out in Laxminarayan Temple vs. L.M. Candorc AIR 1970 Bombay 23 lead to the most impossible results. What is guaranteed is the right to own and acquire movable and immovable property and the qualification of the words, 'property' by the words, 'movable and immovable' can leave no room for doubt that what is guaranteed is not merely the abstract right to own property but the concrete right to own particular property-article 19 (1)(f) speaks only of the right to acquire, hold and dispose of property without particularising the property and yet it is now well-settled that what is guaranteed is not the more abstract right to property.. If indeed the right guaranteed by clause (c) of article 26 were an absolute right to own particular property, free of the trammels of any law and subject only to public order, morality and health, it would follow that no property, however unimportant, belonging to a religious denomination could be compulsorily acquired for a public purpose, however vital and pressing it be. A cent of land belonging to a religious denomination could hold up a big project vital to the economy of the nation that indeed is the extreme form the argument has taken-and, contrary to what was decided in State of Bihar vs. Rameshwar Singh AIR 1952 S.C. 252, not even the circumstance that he land was only being converted into another form of property, namely, money, would be of any avail. Other impossible results would be that laws relating to the acquisition and holding of essential commodities, laws such as the gold control laws, which forbidding or controlling imports, would not be applicable to religious denominations and such a denomination would be free to acquire property, both movable and immovable, by any means however illegal and to hold such property in defiance of any la so long as the law does not fall within the realm of public order, morality and health. Even stolen property could acquired and retained.
27. Shorn of the punctuation and division of the four clauses of the article into separate clauses by the use of the letters, (a), (b), (c) and (d), indicative of that they are independent clauses, it is, despite the repetition of the word 'to' before the word 'administer' in clause (d), possible to read the words, 'in accordance with law' appearing at the end of the article as applicable also to clause (c), as if clauses (c) and (d), put together read -
to own and acquire movable and immovable property and administer such property in accordance with law.
Or, to put it more clearly, as if they read-to own, acquire and administer movable and immovable property accordance with law.
28. It is but proper that the secular aspect of the right guaranteed by article 26 should be subject to the ordinary laws; both clauses (c) and (d) thereof deal with the same matter, namely, the right to property; the words 'such property' in clause (d) have the effect of attracting it to clause (c); and having regard to the absurd and impossible results which would otherwise follow, we think that the rules of statutory construction would justify us in ignoring the punctuation and the lettering of the clauses and reading the words, 'in accordance with law' as qualifying not merely clause (d) but also clause (c) of the article, especially so when we are construing a conditional provision.
29. It is said that so to construe the article would be to rob clause (c) thereof its content and make it an empty guarantee. That is not so. The guarantee is that there can be no interference with the right of a religious denomination to own and acquire property save by the authority of law, a guarantee similar to that vouchsafed by article 21 and 31(1) of the Constitution. Mere executive interference is altogether excluded, and the law must be a valid law not merely made by the competent legislature but also keeping within the constitutional limitations.
30. The pre-natal history of the article seems to support the construction we have placed upon it, namely, that while the opening words, 'Subject to public order, morality and health' qualify all the four clauses thereof, the closing words, 'in accordance with law' qualify both clauses (c) and (d), though not clauses (a) and (b).As the article was first drafted, the right to own, acquire and administer property was (like the other rights therein) conferred in unqualified terms. There was difference of opinion as to whether a fundamental right to property should be given at all to religious denominations and, after some discussion, the compromise suggested by Shri Rajagopalachari that the right to own, acquire and administer property be qualified by making it subject to the general law was accepted. At a later stage, a suggestion made by Dr. Pattabhi Sitaramayya that the words, 'Subject to public order, morality and health' be added at the beginning of the article was also accepted. It thus seems clear that the punctuation and the lettering apparently divorcing the closing words, 'in accordance with law' from clause (c) were no more than an error in drafting.'
10. The provisions of Article 26 (c) and (d) of the Constitution do not prohibit a State making laws which result in the religious denomination ceasing to own the property and consequently ceasing to administer the property. This is indicated in K. W. Estate vs. State of Madras (AIR 1971 SC. 161). Speaking for the Bench, Hegde J. said :
It was next urged that by acquiring the properties belonging to religious denominations, the legislature violated Article 26 (c) and (d) which provide that religious denominations shall have the right to own and acquire movable and immovable property and administer such property in accordance with law. These provisions do not take away the right of the State to acquire property belonging to religious denominations. Those denominations can own, acquire properties and administer them in accordance with law. That does not mean that the property owned by them cannot be acquired. As a result of acquisition they cease to own that property. Thereafter their right to administer that property ceases because it is no longer their property. Article 26 does not interfere with the right of the State to acquire property.'
The same could be said of laws relating to taxation. So long as the right under Article 26(c) is to be subject to the laws of the legislature there can be no attack on the constitutionality of a statute merely because it enables tax being imposed on the income of a religious denomination. Therefore I find no reason to declare S. 2(24)(iia), (assuming that the definition in the section can be struck down) in any way of ending the provisions of Article 26 of the Constitution of India.
11. Counsel Sri. Radhakrishna Menon urged at the hearing that offerings made by devotees to the diety of Srikrishna cannot be taken as voluntary contributions within the meaning of the term in S. 2(24)(iia) of the Act. It is agreed at the hearing that these are not matters with which I need be concerned now, for, if there is jurisdiction to take up assessment proceedings these are appropriately matters to be taken up by the petitioner before the heirarchy of statutory authorities competent to deal with questions under the Income-tax Act.
12. In the result, the Original Petition is without merit and is dismissed. Parties are directed to suffer costs.