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S.M.N. Thangaswami Chettiar, Madurai and anr. Vs. Commissioner of Income-tax, Madras - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberTax Case Nos. 76 and 77 of 1962 (Ref. Nos. 51 and 52 of 1962)
Reported inAIR1966Mad103; [1965]57ITR546(Mad); (1964)1MLJ251
ActsIndian Income-tax Act, 1922 - Sections 4(3), 15-B, 15-B(2) and 66; Income-tax Act, 1886 - Sections 4(3); Mortmain and Charitable Uses Act, 1888 - Sections 13(2); Religious Endowments Act, 1863; Government of India Act, 1935; Hindu law; Indian law
AppellantS.M.N. Thangaswami Chettiar, Madurai and anr.
RespondentCommissioner of Income-tax, Madras
Cases ReferredIn Saraswathi v. Rajagopal Ammal
income-tax act (xi of 1922), section 15-b--claim for rebate on donation for renovation to hindu temple--charitable purpose--meaning--wide enough to include religious purpose--real test--whether institution established for general benefit or for particular community ; during the year of account relative to the assessment year 1953-60, the two assessees donated certain amounts for the renovation of sri meenakshi sundareswarar temple at paramakudi. the temple is a public one and has been declared to be such under the provisions of madras act ii of 1927. the two assessees claimed rebate of tax under section 15-b of the indian income-tax act (xi of 1922) on the amounts paid by them for the renovation of the temple. the income-tax officer did not accept the claim. he held that a hindu temple..... (1) these two references arise out of assessments to income-tax for the year 1959-60 of two partners of a firm, s. m. n. mahadevan chettiar, which carries on business at madurai. during the year of account relative to the assessment year abovementioned, the two assessees respectively donated rs. 16,000 and rs. 24,000 for the renovation of sri meenakshi sundareswarar temple at paramakudi in the ramanathapuram dt. the temple is a public one and has been declared to be such under the provisions of madras act ii of 1927. it is, however, claimed that the trusteeship of the temple vests hereditarily in a particular family. that circumstance is of no importance to the present case.(2) the two assessees claimed rebate of tax under s. 15-b of the indian income-tax act, 1922, on the amounts paid.....
(1) These two references arise out of assessments to income-tax for the year 1959-60 of two partners of a firm, S. M. N. Mahadevan Chettiar, which carries on business at Madurai. During the year of account relative to the assessment year abovementioned, the two assessees respectively donated Rs. 16,000 and Rs. 24,000 for the renovation of Sri Meenakshi Sundareswarar Temple at Paramakudi in the Ramanathapuram Dt. The temple is a public one and has been declared to be such under the provisions of Madras Act II of 1927. It is, however, claimed that the trusteeship of the temple vests hereditarily in a particular family. That circumstance is of no importance to the present case.

(2) The two assessees claimed rebate of tax under S. 15-B of the Indian Income-tax Act, 1922, on the amounts paid by them for the renovation of the temple. The Income-tax officer did not accept the claim, as in his view, a Hindu temple could not be regarded as a charitable institution; nor according to him could any contribution given for its renovation be one for an object of any general public utility. On appeal, the Appellate Assistant Commissioner took a different view, holding that donations to a religious institution would be for a charity. He also accepted the case of the assessees that the temple, to which the contributions were made by them, was open to all the communities and that therefore, the conditions prescribed in

S. 15-B were satisfied in the case. On this conclusion, the assessees were granted a rebate of tax as claimed by them. The department them took up the matter on further appeal to the Appellate Tribunal. The Tribunal construed the term "charitable purpose" employed in S. 15-B strictly, and held that it could not include a religious purpose. The order of the Appellate Assistant Commissioner allowing the rebate was set aside.

(3) The Department has raised before the Tribunal an alternative case as well. It contended that even if a religious purpose were deemed to be a charitable purpose, donation to a Hindu temple being one which could benefit only a particular community, the provisions of S. 15-B(2) (ii)) would preclude the assessees from getting the benefit of the section. The Tribunal did not deal with that contention for the reason that it was not necessary for them to do so, in the view they took of the case.

(4) The present references arise out of the order of the Tribunal, involving a single point for determination, namely, whether a donation for a purely religious purpose by an assessee would entitle him to obtain a rebate of tax under S. 15-B. The following question referred to us in T. C. 76 of 1962 can be taken as a typical one.

"Whether the disallowance of the rebate of tax under S. 15-B of the Act on the donation of Rs. 16,000 by the assessee to Sri Meenakshi Sundareswarar temple is right in law?"

The answer to the foregoing question depends on the true construction of S. 15-B of the Income-tax Act of 1922. The Act provides for exemption from tax of income received from properties held on trusts for religious and charitable purposes. It also provides that even if there is no dedication of the property itself to the trust of the kind mentioned above, an assessee, if he makes a payment for the benefit of a charitable institution or a fund, can obtain a rebate of tax relative to the amount paid, when he is assessed to tax on his own income. Thus, S. 4(3) of the Act provides that income received from property held in trust or other legal obligation wholly for religious or charitable purposes, shall be exempt from taxation. The section carries with it a definition of the term "charitable purpose". We shall have to refer to that definition at a later stage of this judgment.

(5) Section 15-B deals with the rebate of tax in respect of payment made to charitable institutions, or funds of the kind specified in sub-cls. (i) to (v) of Cl. (2) thereto.

(6) Both the provisions aforesaid contain certain conditions, which have to be satisfied before relief could be obtained thereunder. It is, however, unnecessary to refer to those conditions.

(7) The temple, for the benefit of which, the contributions have been made, by the assessees, is a Hindu temple. The case of the department is that relief under S. 15-B cannot be given in respect of donations made to a religious cause, as that would not be a charitable purpose with which alone the section is concerned. It is also said that any donation to a Hindu temple would benefit only a limited class of people, namely, the Hindus who go to it for worship and that, therefore, it would not be an object of public utility and that even otherwise, it will come within the mischief of S. 15-B(2)(ii) of the Act.

(8) The main support for the first part of the contention stated above is the difference in language found in S. 4(3)(i) and in S. 15-B(2). In the former case, the exemption from tax is granted in respect of income from properties dedicated wholly for "religious or charitable purposes". In the latter case, that is, under S. 15-B, a rebate of tax is allowed only for sums paid by the assessee to an institution or fund established in the taxable territories for a "charitable purpose". It is argued that S. 15-B, on its terms, would not apply to all those objects which would come under S. 4(3)(i), but to a limited category of cases, namely, where the payment has been made for charitable purposes, as distinguished from religious purposes. The argument, no doubt, appears plausible, but, on closer examination of the matter, it will be found that it has no substance.

(9) Before we take up the consideration of this question, it will be necessary to first ascertain the meaning of the term "charitable purpose" employed in S. 15-B of the Act, to see whether it will include within it a "religious purpose" as well. Neither the word "charity" nor the phrase "charitable purpose" has been defined in the Act. S. 4(3) which contains a definition of the phrase "charitable purpose" says-

"......'Charitable purpose' includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility, but nothing contained in clause (i) or clause (ii) shall operate to exempt from the provisions of this Act that part of the income from property held under a trust or other legal obligation for private religious purposes which does not enure for the benefit of the public."

The definition above set out is not an exhaustive one. It only includes certain objects which the Legislature presumably held that, but for the definition given by it, would not be comprehended within the meaning of the term "charitable purpose". Secondly, it will be noticed that there is no definition of the term "religious purpose", which occurs in S. 4(3). Nevertheless, in defining the phrase "charitable purpose" the section excludes private religious endowments, implying thereby that the phrase "charitable purpose" would be wide enough to include religious purpose as well, and it was, necessary to exclude a particular category of them which the Legislature did not intend to benefit.

(10) In view of the fact that there is no exhaustive definition in the word "charity" or the phrase "charitable purpose" in the Act, we have to adopt the general meaning of those words in the interpretation of the relevant provisions in the Act. It has been held in a long series of cases that the word "charity" does not admit of any rigid definition. But those cases have attempted to give the characteristics of charity and of charitable purposes. Again, the concept of charitable purpose as well as a religious purpose, has varied from generation to generation. For instance, in Andhra Chamber of Commerce v. Commissioner of Income-tax, 1961-42 ITR 503 (Mad) Rajagopalan J. held that as the economic prosperity of a country, or even a section thereof, built on its trade, commerce and industry, would be a benefit that accrues to the country as a whole, albeit that prosperity was to be shared by those only who participate in such trade, commerce and industry, anything done to advance such prosperity, would be a matter of public utility within the scope of S. 4(3). Again, at one time, the English law considered that donations for superstitious uses would be invalid, as any trust which had for its object the propagation of rules of religion not tolerated by law, would not be reorganised by the courts. This law as to superstitious uses, as it existed in England, was not accepted in this country. Even in the country of its origin, it has now been recognised that a bequest like masses for the dead, was not void as a gift for superstitious uses; see Bourne v. Keane, 1919 AC 815. It was held in that case that gifts for saying prayers for the benefit of the soul of the deceased persons, were not illegal on the ground of being superstitious. That case, however, did not decide whether such gifts were charitable or not. But in a more recent case in re, Caus Lindeboom v. Camille, 1934-1 Ch 162, Luxmoore J. expressed the opinion that a gift for saying masses would be charitable as being for the advancement of religion and also because it enabled a ritual act to be performed, which was the central act of the religion of a large proportion of Christians.

(11) We have given above two instances to show that the concept of charitable purpose varied from time to time.

(12) There is little reason to regard donations for religious purposes as otherwise than charitable. Further, a contribution for the construction or renovation of a temple, or other place of worship though it might be said to be actuated by religious motives, and in the sense one intended for religious purposes, will also be one for the benefit of the public or, at least, a section thereof. It benefits the people who come to it for worship, and as Luxmoore J. observes in the case referred to above, it assists in the employment of priests and other servants in the temple, who would otherwise be unemployed. The temples in this country occupy a significant position, inasmuch as they provide facilities or worship of God. For ages they have remained the symbol of Hindu culture and preserved the faith of man in God, sustaining thereby the moral order of the Universe. A contribution for the renovation of a temple, or one for the maintenance thereof, in addition to its being one for a religious purpose, can therefore be regarded as one for the benefit of the class of public who go to the temple for worship or those who live by it.

(13) With this background we shall now proceed to consider whether the word "charity" and the phrase "charitable purpose" employed in the Act relate only to the secular charity or charitable purposes, or, whether they are comprehensive enough to include religious charity and purposes as well. In Commissioner of Income-tax v. M. Jamal Md. Sahib 1941-9 ITR 375: (AIR 1941 Mad 535 (SB)) Leach C. J. gave expression, to the view that the words 'charitable purpose' found in the Act should be given only a restricted meaning, having regard to the fact that the Indian Income-tax Act was expressed in English language, the words used in it having the same meaning as the one adopted in the construction of similar statue in England. This method of construction can hardly be justified as correct, particularly for the reason that in interpreting a statute, what the court is concerned is not so much the meaning which any expression had acquired in another country, but rather the intention of the legislature that enacted it. For the ascertainment of such an intention, in the absence of any indication to the contrary in the statute itself, it is but proper to consider the notions which the Legislature had, when it employed the particular words in the statute. I can, for this purpose, be legitimately assumed that when the legislature employed the word "charity" or the phrase "charitable purpose", it had in view the prevailing concept of those words and not the limited one, which the English courts adopted for them.

(14) In All India Spinners Association, Mirzapur v. Commissioner of Income-tax, 1944-12 ITR 482: (AIR 1944 PC 88) Lord Wright observed:

"It is now recognised that the Indian Act must be construed in on its actual words and is not to be governed by English decisions on the topic. The English decisions on the law of charities are not based upon definite and precise statutory provisions. They have been developed in the course of more than 3 centuries of the Chancery courts. The Act of 43 Elizabeth (1601) contained in a preamble a list of charitable objects which fell within the Act, and, this was taken as a sort of chart or scheme, which the court adopted as a groundwork for developing the law. In doing so, they made liberal use of analogies so that the modern English law can only be ascertained by considering a mass of particular decisions often difficult to reconcile. It is true that S. 4(3) of the Act has largely been influence by Lord Macnaghten's definition of Charity in Commissioner for Special Purposes of Income-tax v. F. Pemsel, 1891 AC 531 at p. 583, but that definition has not statutory authority and is not precisely followed in the most material particular; the words of the section are "for the advancement of any other object of general public utility" whereas Lord Macnaghten's words were "other purposes beneficial to the community". The difference in language, particularly the conclusion in the Indian Act of the word "public" is of importance. The Indian Act gives a clear and succinct definition which must be construed according to its actual language and meaning. English decisions have no binding authority on its construction and though they may sometimes afford held or guidance, cannot relieve the Indian courts from their responsibility of applying the language of the Act to the particular circumstances that emerge under conditions of Indian life."

It will therefore, follow that the language in any Act, like the Income-tax Act, has to be construed in accordance with the concepts prevalent in this country and not by following the construction of the English statutes.

(15) Thus, it will be for the court to decide whether the character and object of a trust in any particular case would amount to a charitable one, within the meaning of the statute, understood in the light of the context that led to the passing of the Act. In the Trustees of the Tribune, in re, (1935) 3 ITR 246: (AIR 1935 Lah 570) Tekchand J., expressing a dissent from the view of the majority, held that a trust intended for maintaining a newspaper conveying news or opinions on matters of general interest to the public and thereby educating the minds of its readers on lines which the founder considered to be beneficial to the public at large, where no kind of personal benefit was reserved to any individual, would be a trust of a public character. This view was accepted by the Privy Council on appeal in Trustees of Tribune Press Lahore v. Commr. Of Income-tax, Punjab, (1939) 7 ITR 415: (AIR 1939 PC 208). In the course of the judgment Sir George Rankin said:

"Their Lordships are in agreement with this view and see nothing in the Indian Income-tax Act to discharge the court of its responsibility in coming to a finding as to the character of the object of a trust--a matter which bears directly upon its validity. It is to be observed moreover that under the Income-tax Act, the test of general public utility is applicable not only to trusts in the English sense but is to be applied to property held under trust 'or other legal obligation'--a phrase which would include Moslem Wakfs and Hindu endowments. The true approach to such questions in cases which arise in countries to which English idea--let alone English technicalities--may be inapplicable was considered by the Board in Yeap Cheah Neo v. Ong Cheng Neo, (1875) 6 PC 381 and it was well said by Sir Raymond West in an Indian case Fatima Bibi v. Advocate General, ILR 6 Bom 42 at p. 50:

" But useful and beneficial in what sense? The courts have to pronounce whether any particular object of a bounty falls within the definition; but they must in general apply the standard of customary law and common opinion amongst the community to which the parties interested belong."

From the foregoing, it will be clear that legislative enactments have got to be construed in a manner similar to deeds, in the sense that both of them have got to be understood in the light of the surrounding circumstances attending the enactment or the document, as the case may be. But this rule does not prevent the court from resorting to English decisions for interpretation of statutes in appropriate cases.

(16) A provision similar to S. 4(3) was in existence even in the Income-tax Act, 1886. The law-making authorities in those days were undoubtedly influenced, to some extent at least, by the English law, when they proceeded to enact statutes in this country. Now, adverting to the rule as to construction of deeds, Mayne has stated in his work on Hindu Law, and Usage, 11th Edn. at page 912 thus-

"The courts in India have, in relation to Hindu Wills and gifts, adopted the technical meaning of charitable trusts and charitable purposes which the courts in England have placed upon the term " charity" in the Statute of Elizabeth. All purposes which are charitable according to English law will be charitable under Hindu law. But in addition, under the bead of advancement of religion, there are other charitable objects in Hindu law which will not be charitable according to English law; for that law forbids bequests for what are termed superstitious uses, a restriction which does not apply to grants of this character in India, even in the Presidency towns, and such grants have been repeatedly enforced by the Privy Council. What are purely religious purposes and what religious purposes will be charitable must of course be entirely decided according to Hindu law and Hindu notions."

Kanga, in his commentaries on the Indian Income-tax Act, 4th Edn., Vol. I, page 207, has summed up the meaning of the term "charitable purpose" under the Income-tax Act thus:

".... what is good as charity in English law is also, as a general rule, good as charity in Indian law, though what is bad as charity in English law is not necessarily bad as charity in Indian law."

We have, therefore, first to consider the meaning of the word 'charity' under the English law and then consider whether and extended meaning should be given to that word on the terms of the various provisions contained in the Indian Income-tax Act.

(17) The concept of the word 'charity' under the English law has been succinctly stated in Simon's Income-tax Act, 2nd End., Vol. I, page 392 in the following words:

"The word 'charity' and the phrase 'charitable purposes' in the Income-tax Acts bear the same meaning as they have in other branches of the law, that is, a technical meaning, illustrated by a long list of decisions, including the leading case of 1891 AC 531.

"The Statue of 1601, 43 Eliz. I, c. 4, was not passed for the purpose of giving a definition of charity, but was directed to providing for the reformation of abuses in the application of property devoted to certain charitable uses. This statue has been repealed by the Mortmain and Charitable Uses Act, 1888, but the preamble to the repealed statue is retained in S. 13(2) of the repealing Act. This preamble enumerates the following purposes as being charitable; the relief of aged, impotent and poor people; the maintenance of sick and maimed soldiers and mariners; the maintenance of schools of learning, and free schools and scholars in universities, the repair of bridges, ports, havens, causeways, churches, sea-banks and highways; the education and preferment of orphans; the relief, stock, or maintenance of houses of correction, the marriages of poor maids; the supportation, aid and help of young tradesmen, handicraftsmen, and persons decoyed; the relief or redemption of prisoners or captives; the aid or ease of any poor inhabitants concerning the payment of fifteens, setting out of soldiers and other taxes."

It will be noticed that advancement of religion is not one of the objects mentioned in the preamble to the English statute referred to above, which furnished broadly the categories of objects of 'charity'. The preamble mentions however 'repairs to churches' as a charity. There can be little doubt that such repairs were considered as one beneficial to the community. But English law does recognised religious purposes as charitable purposes. In Tudor on Charities, 5th Edn. it is stated at page 35:

"So also gifts for providing or maintaining a place of public worship, gifts for the good or for the reparation, furniture, or ornaments of a parish church, or of a chapel or meeting house; or for church expenses. The maintenance of any part of the fabric of the church, as for keeping in repair a chancel, a gallery, a window or monument in church, or keeping in repair the chimes, or the organ, or the churchyard, or a burial ground even where restricted to members of a particular sect is charitable. Additions to the fabric, such as, a new church clock, or a stained glass window, are objects of charity."

(18) That a religious purpose can also be a charitable purpose was recognised by Lord Macnaghten in his celebrated judgment in 1891 AC 531 at p. 583 where, the eminent Judge grouped under the following heads the charitable purposes which would come within the language of Statute of Elizabeth: (1) the relief of poverty; (2) education; (3) the advancement of religion; (4) other purposes beneficial to the community not falling under any of the preceding heads. In a later case in In re, White; White v. White, 1893-2 Ch 41, it was held that bequest for a religious institution or for a religious purpose was prima facie a bequest for a charitable purpose. Therefore, under the English law, gift for advancement of religion would be included in the words "charitable purpose". That concept, translated in the context of the conditions prevailing in this country, must mean that donations for the construction or for renovation or repairs to places of worship must be regarded as charitable donations.

(19) It has been argued that in construing and interpreting the expression 'charitable purpose' in

S. 15-B, which applies to all communities in India, regard should be had only to the general principles of construction that would be applicable to all communities, and not to concepts of charity which each community might have under their personal law. For example it is said what is meritorious act according to the Hindu concept might not be so for the Muslim and that the court cannot, therefore, adopt the varying definitions for the word with respect to each one of the communities in India. This contention cannot be accepted as correct having regard to the observations of the Privy Council in 1939-7 ITR 415: (AIR 1939 PC 208), to which we have just now referred, where it was definitely laid down that Hindu endowments and Muslim wakfs would be charities within the meaning of the Indian enactment.

(20) We have, therefore, next to consider the meaning of the phrase 'charitable purpose' according to the Hindu notions and see whether the building or renovation of a temple would come within it. In the Smritis "charity" whether secular or religious, is but a part of the content of the word "Dharma". That word has a comprehensive significance, meaning a moral law or right conduct. Its concept was dynamic, and varied, and it had not unoften to be interpreted in accordance with the Sadachara, that is, the practices of the good and wise. But, when that word is used in the context of gifts property, it means all acts of piety and benevolence--considerably wider than what is understood by the use of the word charity. The meaning of this word has also undergone a change, according to the prevailing notions, at different periods of Hindu religious history. According to the Hindu text-writers, gift for religious and charitable purposes will fall into two divisions, Ishta and Purta, the former being sacrifice and sacrificial gifts and the like, and the latter charity properly so-called. In Mayne's Hindu law, and Usage, 11th Edn., at page 911. Purta or charitable acts are referred to as acts of construction of tanks, wells with flights of steps, temples, planting of groves, the gift of food, dharmasalas (rest houses) and places for supplying drinking water, the relief of the sick, the establishment of processions for the honour of deities and so on. Gifts for the promotion of education and knowledge are considered specially meritorious.

(21) The learned author says "It will be noticed that temples and processions for deities were considered as charitable acts (purta) while hospitality (atithya) was considered as a sacrificial gift (ishta)."

(22) It will thus be seen that there is really no distinction, according to the Hindu concept, between a secular and religious charity. This is more particularly so in the case of a gift for the purpose of construction or renovation of a temple, for such a gift not merely secures merit to the donor, from a religious point of view, but serves to benefit other worshippers therein, when such a temple happens to be a public one. The Supreme Court in Ramsaroop Dasji v. S. P. Sahi, held that a public temple is one where a considerable portion of the public or a section thereof has a beneficial interest. A gift for the purpose of such a temple must therefore benefit the public. Considered from any point of view, that is, whether it be from the comprehensive interpretation that is given by the Hindu jurists for the word "charity", or whether it be on the narrower interpretation of that word under the English law, any contributions for repairs to places of worship will be one made for a charitable purpose.

(23) Mr. Balasubramaniam on behalf of the department submitted that this view cannot be adopted in the construction of S. 15-B, as the statute itself has kept the religious and secular charities distinct. As we have pointed out earlier, the entire argument of the department rests upon the difference in language employed in S. 4(3)(i) and S. 15-B, the former employing the words "religious or charitable purpose", while the latter contains the word "charitable purpose" alone. This, it is said, would imply that the legislature meant by " charitable purpose" only secular charities. We are by no means satisfied that the Legislature could have had any such distinction in view, when it used only the word "charitable purpose" in the sections aforesaid. At the beginning of this judgment, we have referred to the definition of the phrase "charitable purpose" as given in S. 4(3); that contains only an exception with respect to private religious endowments. That would imply that even without the collocation of the words "religious purpose" the phrase "charitable purpose" employed in S. 4(3) was intended to cover not merely secular but also public religious charitable purpose. Further, Ss. 4(3) and 15-B were not enacted at the same time so that it can be said there was any scheme behind them. The exemption provided for by the former section was in existence even in the Act of 1886. The language of that enactment was "any income derived from property solely employed for religious or public charitable purpose". That language was repeated in the successive enactments. It is a matter of common knowledge that by the Religious Endowments Act of 1863, the Government of India, which was then an alien one, divested itself of the management of religious endowments. Although the meaning of the word "charity" was wide enough to include religious endowments, it was presumably thought by the legislative authorities then and at subsequent periods, that there should be an independent reference to religious endowments as well whenever they were included as the subject of legislation. S. 15-B was introduced into the Act for the first time by Act IX of 1948. Prior to that time an assessee obtained an allowance in respect of amounts expended towards charity etc., as an item of deduction in their business accounts, under certain executive instructions contained in the Income-tax Manual.

(24) Before S. 15-B was introduced into the Act, the meaning of the words 'charity' and 'charitable institutions' etc, fell to be considered into two important decisions. The Legislature must have been aware of these decisions when they introduced S. 15-B. The first of them is Manicka Sundara v. R. S. Naidu, ILR 1945 Mad 697: (AIR 1945 Mad 211). The case was concerned with the vires of the Madras Temple Entry Authorisation and Indemnity Act XXII of 1939. The power of the local legislature, which enacted that legislation, was contained in Entry 34 of List II to the VII Schedule of the Government of India Act, 1935. That entry read "Charities and Charitable institutions: charitable and religious endowments". One of the questions for consideration was whether the words "charitable institutions" in that entry would include religious institutions. Leach C. J., delivering the judgment of the Bench held that in using the words "religious and charitable endowments" in the Government of India Act, the Parliament in England merely followed the previously existing Devolution Rules and that by the mere use of both the words "charitable and religious" in that entry the word "charitable" did not acquire any special meaning, excluding from its ambit religious institutions. This view was accepted on appeal by the Federal Court of India in Manikkasundara v. R. S. Naidu, AIR 1947 FC 1, where it was held that the word "charity" was an appropriate generic term of wide scope, the meaning of which would include all public secular charitable and religious trusts. It would follow from the above that the use of the phrase "religious or charitable purpose" in statutes is due more or less to historical reasons and not because of any intention on the part of the Legislature to have a dichotomy between religious and charitable purposes, the latter meaning only secular charitable purposes.

(25) Therefore, the term "charitable purpose" is wide enough to include religious purposes as well, and this will be so notwithstanding the fact that the word "religious" is also referred to in S. 4(3); when the phrase "charitable purpose" is employed in S. 15-B, it must have been with the intention that it would comprehend both religious as well as charitable purposes.

(26) This view is strengthened by sub-clause (ii) of clause (2) of S. 15-B. That provides that the benefit of the section would be available to an assessee so long as the Institution or Fund to which the donation is made is not one intended for the benefit of any particular religious community. If S. 15-B was restricted only to secular charitable purposes, there is no reason to except from its operation a charity which is intended for the benefit of any particular religious community. It can be reasonably inferred from that provision that it is because the Legislature thought that the charitable purpose would include religious purpose, the excepted from the operation of the section, religious charities intended for the benefit of a particular religious community. Learned counsel for the department would however contend that clause 2(ii) related only to secular charity confined to a religious community and that it was not concerned with religious charities at all. We are unable to put any such narrow construction on that provision. Again, as we pointed out, a temple does help the spiritual and moral advancement of the section of people who resort to it. Such advancement could not be regarded as in any sense less than the material advance of those people. If an endowment for the material advancement of a section of the public can be regarded as a public utility, we fail to see why a contribution for the construction or renovation of a temple cannot be regarded as such. In 1939-7 ITR 415: (AIR 1939 PC 208), the Privy Council clearly indicated that a Hindu religious endowment would be a trust within the meaning of S. 4(3). The same principle will, in our view, have to be applied in the construction of S, 15-B, subject, of course, to the operation of sub-clause (ii) of clause (2) of that section. We are, therefore, unable to accept the view of the Appellate Tribunal that the words "charitable purpose" occurring in S. 15-B must be read as meaning charitable purposes other than what may strictly be styled as religious purposes.

(27) This conclusion does not dispose of the matter. We have still to see, whether the assessees would be entitled to the rebate of tax claimed, having regard to the provisions of S. 15-B(2)(ii). The effect of that sub-clause is to grant relief to an assessee who had made a donation for a charitable purpose where the institution or fund receiving the payment is not expressed to be for the benefit of any particular religious community". In other words, if the donation is to a Hindu temple, no rebate could be claimed by the assessee.

(28) Mr. Viswanatha Aiyar for the assessee first contended that as the Tribunal has not considered this point, it will not be open to this court, under S. 66 of the Act, to take up the question and consider the same. We cannot agree. It is true that the Tribunal did not find it necessary to deal with the applicability of S. 15-B(2)(ii) of the Act, in the view they took. But the question was raised before the Tribunal by the department. Indeed, the Appellate Assistant Commissioner dealt with it in detail and held that the temple in question was resorted to by all communities and that therefore it was not one which could be regarded as expressed to be for the benefit of any particular community. In Commissioner of Income-tax v. East India Industries (P) Ltd., 1962-46 ITR 1086 (Mad), we held that where a question of law was raised before the Tribunal but it failed to deal with it, it must be deemed to have been dealt with by it and was, therefore, one arising out of the order. It will, therefore, be competent for this court, while giving its opinion under S. 66, to consider whether the case satisfies the requirements of S. 15-B (2)(ii). There is nothing in the question, forming the subject-matter of the reference, to preclude us from considering that matter.

(29) It was then contended that the temple to which the contributions were made by the assessee was one open to all and, therefore, it should be regarded as an institution existing not for the benefit of any particular religious community. In the order of the Appellate Assistant Commissioner reference was made to a notice issued by a Muslim gentleman that he would offer worship on 29-4-1959 in the temple and meet the expenses of the festival on that date. There is no evidence to show that the Muslim gentleman was allowed to offer worship and conduct the festival. The Appellate Assistant Commissioner himself does not, while referring to this notice, say whether he accepted it as proving that Muslims too worshipped in the institution in question. We are unable to regard that notice as sufficient material for the conclusion reached by the Appellate Assistant Commissioner. The Koran contains stringent prohibitions against idol worship. It does not at all seem likely that any Muslim would have dared to offer worship in a Hindu temple. Even assuming that he did so, it must have been only because the trustees of the temple, for the time being allowed him to do so. It cannot mean that the institution was one established for the benefit of the other religionists as well.

(30) Learned counsel referred us to yet another instance where the Process Servers of the Paramakudi District Munsif court offered worship and met all the expenses of the festival in the temple on 3-5-1960. It is said that there were a number of members in the Process Servers establishment, who belonged to other religions. We are unable to see how this instance can at all prove the admission of other religionists into the temple and of their worship in the same. Hindu temples in this part of the country at any rate are constructed in accordance with the Agamas. Elaborate rituals are prescribed by them, not merely for the conduct of daily worship in the temples, but also for their purification where they have been defiled by the presence of persons who are not permitted to visit them. Undoubtedly, the temples are intended for the spiritual benefit of the Hindu community in general. Originally, even communities which were regarded as unclean, had no right to enter the temples intended for the higher four castes. Legislation and advanced thinking of the people have now enabled all Hindus to visit the Hindu temples. But that cannot alter its essential character as a Hindu institution. Further we have one important piece of evidence in the present case. Sri Meenakshi Sundareswarar temple at Paramakudi has been notified as a public temple under Madras Act II of 1927, after an appropriate enquiry. A temple as defined in that Act, is a place, by whatever designation known, used as a place of public religious worship and dedicated to, or for the benefit of, or used as of right by, the Hindu community or any section thereof, as a place of religious worship. Therefore, it must be held that in the present case the temple is one which is expressed to be only for a particular religious community.

(31) It is, however, contended on behalf of the assessees that as there is no deed of dedication with respect to this temple, it is the user which should be looked into for the purpose of ascertaining whether it is intended for a particular community or for all the members of the public generally; and as there has been evidence of worship in the temple by the members of the other communities as well, the institution should not be regarded as one for the benefit of a particular religious community. There is a fallacy in this contention. The word "expressed" in sub-clause (ii) of S. 15-B(2) cannot mean that it should be expressed in writing. It is well known that a dedication for a public religious or charitable purpose can be oral. When a dedication is oral, it cannot, for that reason be stated that the purpose of the dedication has not been expressed. A Hindu temple is constructed according to the Sastras. The object and purpose of establishment of the temple should therefore have a Shastraic basis. If under the accepted notions of these Sastras, members of the alien religions are not to be admitted into it for the purpose of worship, the temple can only serve the needs of the particular community, namely, the Hindu community.

(32) In the application of S. 15-B, it is for the court to determine the purpose of the trust. In so doing, it cannot act on proof of its own notions of what is right and wrong. The court must assume, in the absence of any cogent evidence to the contrary, that a Hindu temple is constructed in accordance with the Sastras in the light of the objects mentioned and for the purposes specified therein. In Saraswathi v. Rajagopal Ammal the Supreme Court, after referring to the Ishta and Purta works of charity under the Hindu Sastras, observed-

"These lists are no doubt not exhaustive but they indicate that what conduces to religious merit in Hindu law is primarily a matter of Shastraic injunction. To the extent, therefore, that any purpose is claimed to be a valid one for perpetual dedication on the ground of religious merit though lacking in public benefit, it must be shown to have a Shastraic basis so far as Hindus are concerned. No doubt, since then other religious practices and beliefs may have grown up and obtained recognition from certain classes, as constituting purposes conducive to religious merit. If such beliefs are to be accepted by courts as being sufficient for valid perpetual dedication of property therefore without the element of actual or presumed public benefit, it must at least be shown that they have obtained wide recognition and constitute the religious practice of substantial and large class of persons."

It is indisputable that there is no evidence in the case that a substantial class of persons belonging to communities other than the Hindus had begun to accept the Hindu religion and the Hindus have also accepted them into their fold to entitle them to participate in the worship. Even if there be such evidence, it can only justify the creation of a new endowment according to the new concept. But new ideas and beliefs cannot alter the original foundation in regard to existing temples. They must be regarded as having been founded on Shastraic basis and if that basis does not permit alien religionists from offering worship in the temple, it will not be for the court to doubt the truth of the religious belief which led to the foundation. The temple, in the instant case, must, therefore, be regarded as having been expressed for the benefit of the Hindu community only. A charitable contribution to that temple will not therefore be one coming within the terms of S. 15-B of the Act.

(33) We are of opinion that the questions referred to us should be answered in the affirmative and against the assessees, though not for the precise reason stated by the Tribunal. There will be no order as to costs.

(34) II/AGJ/R.G.D.

(35) Reference answered.

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