1943 (8) TMI 1 - HC - Income Tax

Summary

Issues Involved:
1. Status of the Sabha
2. Registration of the Sabha as a charitable society
3. Ownership and title to the property
4. Cause of action against the Income-tax Officer of Agra

Issue-wise Detailed Analysis:

1. Status of the Sabha:
The court examined whether the Sabha was a genuine society or a sham body acting as a dummy for Sahebji Maharaj. The Sabha was established by the followers of the Radha Swami faith and registered as a charitable society. The court found that the Sabha had an independent legal existence and was not a sham body. The Sabha was created to serve the community's needs, including holding property and administering its affairs, which necessitated the creation of a juristic person.

2. Registration of the Sabha as a Charitable Society:
The court considered whether the Sabha could be validly registered under the Societies Registration Act (XXI of 1860). The objects of the Sabha, as set out in its memorandum of association, were religious and charitable. The court referenced previous judgments, including Anjuman Islamia of Muttra v. Nasirud-din and Khaji Muhammad Hussain v. Majiday Mahmood Jamat Managing Committee, which held that a religious purpose might be a charitable purpose and a religious society could be registered under the Act. The court concluded that the dominant intention of the Sabha was charitable, and it was validly registered under the Act.

3. Ownership and Title to the Property:
The court addressed whether the property, including offerings made to Sahebji Maharaj, vested in the Sabha or were the personal property of Sahebji Maharaj. The court found that all property, movable and immovable, recorded in the name of the Sabha was owned and vested in the Sabha. The court also considered the controversial issue of cash offerings made to Sant Satguru. It was established that these offerings, though presented to Sant Satguru, were collected by the Sabha and used for the community's benefit. Sahebji Maharaj and his successors had no personal interest in these offerings. The court held that the Sabha had a legal title to these offerings, which were administered for the Sabha's objects.

4. Cause of Action Against the Income-tax Officer of Agra:
The court examined whether the action of the Income-tax Officer in treating the disputed property as owned by Sahebji Maharaj furnished any cause of action to the plaintiff against the Secretary of State for India in Council. The court found that the Income-tax Officer's jurisdiction under the Indian Income-tax Act did not extend to binding third parties who were not assessees. The act of the Income-tax Officer in denying the plaintiff's title was without jurisdiction and furnished a cause of action against the defendant. The court also referenced conflicting authorities on the interpretation of Section 233(m) of the U.P. Land Revenue Act but concluded that the plaintiff was entitled to the declaration granted by the trial court.

Conclusion:
The appeal was dismissed with costs, and the plaintiff was entitled to the declaration that all offerings, properties, and income vested in the Sabha, and neither Sahebji Maharaj nor his widow and sons had any right or title to them.