CHATTERJEE, J. - This is a reference at the instance of the Income-tax authorities for the opinion of this Court on one question which is formulated in the following terms :-
'Whether on the facts and in the circumstances of the case the income received under the deed of dedication (Arpannama) dated the 31st March, 1922, is chargeable at the maximum rate under the first proviso to Section 41(1) of the Income-tax Act.'
Sri Sital Chandra Banerji, a pious Hindu governed by the Dayabhaga School of Hindu law, dedicated very valuable properties to two dated 31st March, 1922. The Income-tax Officer assessed the assessee under Section 41(1) of the Income-tax Act and assessed the deities as an association of persons at the maximum rate on the ground that the shares of the beneficiaries were indeterminate.
An appeal was preferred to the Appellate Assistant Commissioner who set aside the assessment and held that the shares of the deities were determinate and the entire income was equally divisible between the two deities.
Under the Arpannama the settlor dedicated to the said deities Sri Sri Iswar Sita Ram Jew the properties mentioned in the schedule and made them debutter, and from that day the aforesaid God and Goddess became vested with rights therein, and the settlor became wholly divested of all rights in the said properties.
There were elaborate provisions for the appointment of shebaits, their qualifications and their duties, responsibilities and powers. The settlor set up a governing body and made provisions with regards to Dev Seba and periodical worship and other incidental pious and charitable uses. 'After spending moneys sufficiently according to the discretion of the shebait for the Dev Seba as fixed and the regular worship of the deities and the charities connected therewith', the surplus would be spent for Athisthishala and other charitable objects and religious works mentioned therein.
The Appellate Assistant Commissioner relied on the judgment of the Privy Council in Jogeswar Narain Deo v. Ram Chandra Dutt, and on the judgment of the Patna High Court in the case of Sri Sri Jyotishwari Kalimata v. Commissioner of Income-tax, Bihar and Orissa.
He held that there was a tenancy in common and both the deities were equally entitled to the income of the properties.
The identical point was urged before this Bench in the case of Commissioner of Income-tax, West Bengal v. Pulin Behari Dey which we have just disposed of. We have held that when there is a gift or bequest to two deities without any specification of shares the deities are equally entitled to both the corpus and the income of the properties and they should be taxed as such. There is no room for the contention that the shares were indeterminate or unknown under the proviso to Section 41(1) of the Income-tax Act.
Dr. Gupta urged before us that in this case having regard to the deed of dedication a small amount has been prescribed by the dedicator for the Seva and Bhog of the deities and that a number of provisions has been made for periodical worship, maintenance of poor students, performance of other pujas, support of helpless Brahmin widows etc. He urges that the income which will be really available for the deities is variable and indeterminate as it is left to the discretion of the shebaits and in any event under Section 41(1) the income of the properties was not specifically receivable on behalf of any one person but was generally receivable on behalf of a number of persons and charities and, therefore, the tax should be levied at the maximum rate as indicated in the first proviso to that section.
Dr. Pal Points out that this point was never made before the Income-tax authorities, i.e., neither before the Appellate Assistant Commissioner nor before the Appellate Tribunal. The order of the Appellate Assistant Commissioner shows that the real point that was urged was that the proviso to Section 41 (1) did apply because the shares of the deities in the income were neither ascertainable nor determinate. He held that there was no question of an association of persons in this case and that the individual income of each of the deities was determinate and known. Before the Appellate Tribunal again that was the only point taken and the Tribunal rightly held that mere common management cannot make the deities an association of persons. The idols were no doubt juridical persons but the Tribunal rejected the contention that they formed an association of persons.
Really the point now sought to be urged before us does not arise out of the order of the Appellate Tribunal and involves a basic change in the assessment. We should point out that with regard to the properties the deities or the shebaits in charge of the deities were being taxed under Section 9 of the Income-tax Act, and the tax was levied on the whole of the income of the dedicated properties which was realised by the shebaits on behalf of the deities without making any deduction for the charities and other religious or pious uses mentioned in the Arpannama. We have held that the two deities are co-owners of the properties in equal shares and, therefore, each of them is also the owner of a moiety of the income. There is thus for assessment purpose no question of a variable income for the deities which was indeterminate. Whatever may be paid by the shebaits for the maintenance of the Athithiseva or the poor students or the Brahmin widows, or for other purposes, would be spent or the deities income. When the properties were dedicated in an unqualified manner to the Thakur and Thakurani they were and are the owners of the properties as well as of the income. Having regard to the way the assessment has been made it is immaterial if the actual amount which goes to the deities depends on the discretion of the shebaits. Under the terms of the deed the payments have got to be made out of the usufruct of the properties dedicated to the two deities. This is not a case of partial debutter. Therefore the shebaits as curators or administrators or managers on behalf of the deities would make these payments out of the whole income of the two deities. We cannot allow the basis of the assessment to be changed at this stage and cannot entertain the contention for the first time urged before us that the income from the properties were not received on behalf of the two deities but was received on behalf of the deities and all the persons and charities indicated or specified in the deed of dedication and that there should be an apportionment of the income among them.
As I have mentioned above the only objection that was urged was that the shares of the two deities are indeterminate and that the deities were an association of persons. The assessment case had all along proceeded on the footing that the entire income of the properties really belonged to the deities and the shebaits as their managers must be assessed on the whole of their income. The only question was whether the share of each deity was help of the total income, i.e., whether their shares were defined and known.
In my opinion it is not open to Dr. Gupta at this stage to urge the new point which he now seeks to make. Inasmuch as the assessment has been made on the whole of the income of the Thakurs it is immaterial that the deities through the shebaits have to make payments to other persons and the amount which may be available to the deities is variable or indeterminate. It is equally immaterial that the shebaits as managers of the deities receive the income but have to make payments to or to provide for a large and somewhat indefinite group of persons and charities.
Therefore, the question set out in the referring order should be answered in the negative.
The income received under the deed of dedication is not chargeable at the maximum rate under Section 41(1) of the Income-tax Act.
The assessee is entitled to the costs of this Reference. Certified for two Counsel.
HARRIES, C.J. - I agree.
Reference answered in the negative.