1973 (12) TMI 1 - SC - Income Tax

Hindu deity can hold property and be in receipt of income and can also sue and be sued in a court of law there is no reason why its income should be held to be outside the ambit of taxation if it can be brought within it without straining the language of the statutory provision - Hindu deity is an individual within the meaning of section 3 of Indian Income-tax Act, 1922

Summary

Issues:
1. Whether a Hindu deity is considered an "individual" under the Indian Income-tax Act, 1922.

Analysis:
The judgment delivered by the Supreme Court involved the question of whether a Hindu deity could be classified as an "individual" for taxation purposes under the Indian Income-tax Act, 1922. The case originated from the High Court of Calcutta regarding a trust created in the year 1820 by Smt. Chitra Dassi, which was later administered by the official trustee of Bengal. The primary issue revolved around the nature of the trust and whether it constituted a religious trust benefiting the public. The High Court determined that the deity was liable to assessment under the Income-tax Act, considering it as an "individual."

The High Court's decision was challenged before the Supreme Court, focusing on whether a Hindu deity could be classified as an "individual" for taxation. The appellant argued against this classification, citing a previous decision by the Supreme Court. However, the Supreme Court upheld the High Court's decision, emphasizing that a Hindu deity is a juristic person capable of holding property. Various legal authorities were referenced to establish that a Hindu deity is recognized as a juridical entity with the ability to own property and engage in legal matters.

The Supreme Court further discussed the interpretation of the term "individual" within the Income-tax Act, highlighting that the word "individual" was specifically chosen to differentiate human beings from other entities like companies or associations. The court clarified that the term "individual" encompassed not only human beings but also certain juridical entities, including those created by statute. The judgment emphasized that a Hindu deity, being capable of holding property and engaging in legal proceedings, should be subject to taxation if brought within the statutory provisions without distorting the language.

In conclusion, the Supreme Court dismissed the appeals and upheld the decision that a Hindu deity could be considered an "individual" for taxation purposes under the Indian Income-tax Act, 1922. The judgment highlighted the juridical status of a Hindu deity and its ability to hold property, receive income, and participate in legal matters, justifying its inclusion within the tax ambit. The court also noted that the issue of whether a Hindu deity qualifies as an individual was unlikely to arise under the Income-tax Act, 1961, which provides a broader definition of "person" encompassing various entities, including artificial juridical persons.