SWAMI SATCHITANAND Vs. INCOME TAX OFFICER SECOND ADDL

JUDGEMENT

(1.) The question posed in this Original Petition for decision is whether assessments made an a Society, the Shrishaila Industrial and Spiritual Colony Charities, for the years 1950-51 to 1956-57 stylling the Society as an 'Association of persons' would impose any personal liability on the members of that Society to pay the tax imposed. The petitioners were members of the Society before 1-11-1957. The petitioners contend that there cannot be any personal liability to pay tax imposed on a Society since the members of the Society have no personal liability to discharge the debts of the Society. This Society has been registered under the Societies Registration Act, 1860, and it seems to me that S.6 and 8 of that Act reading as under are relevant:

(2.) S.14 of the Act is also of some assistance which provides that on dissolution, no member of the Society shall receive any profits. From these provisions in the statute, it appears to me to be clear that the members of a society are not personally liable for the debts of the Society. The Society is a legal entity. It is capable of suing and being sued as such. A tax imposed on a Society, though it has been styled as an 'Association of persons' is still a tax on the Society and not on its members. It is not possible, therefore, to say that the tax imposed on a Society is a tax imposed on the members of the Society.

(3.) But counsel on behalf of the Department invited my attention to S.3 of the Indian Income Tax Act, 1922, and contended that the Income Tax law does not recognise a Society, that it only contemplates assessments on certain units -- the individual, the company, the undivided Hindu family, a firm and an Association of persons, -- and for the purpose of Income Tax law, I must consider only the 'Association of Persons' which is the status attributed to the Society under the various assessment orders. The argument is appealing, but it would, I think, amount to ignoring the provisions of the statute which has created the Society. That statute having negatived any personal liability on the part of the members even in the case of a judgment recovered against the Society, it is difficult for me to visualise that the Indian Income Tax Act purported to override these statutory provisions. There is no specific provision in the Indian Income Tax Act to that effect.