FR EPHREM Vs. CIT

JUDGEMENT

(1.) THESE two references are at the instance of the same applicant, an assessee to income tax. The respondent is the Revenue. These references relate to the assessment years 1974 -75 and 1975 -76. The applicant -assessee is a Priest in St. Joseph's Monastery, Mannanam. The sole question that arises for consideration in these cases is whether the surplus that remained with the assessee after disbursement to other Priests in the total funds received for distribution as mass stipend, is income in the bands of the assessee?

(2.) THE questions referred by the Income Tax Appellate Tribunal for the years 1974 -75 and 1975 -66 are as follows: 1. Whether, on the facts and circumstances of the case the Income tax Appellate Tribunal was right in holding that the sum of Rs. 69,519/ - being the surplus remaining with the assessee out of the mass stipends of Rs. 2,13,617/ - received by the assessee during the previous year for the assessment year 1974 -75 as the Income of the assessee for this assessment year, namely, 1974 -75? 2. Whether, on the facts and circumstances of the case, the Income tax Appellate Tribunal was right in holding that the sum of Rs. 55,162/ - being the balance of undisbursed amount remaining with the assessee out of the mass stipends of Rs. 1,21,706/ - received by the assessee during the previous year for the assessment year 1975 -76 (? 1974 -75) as the income of the assessee for this assessment year, namely, 1974 -75? (?) (1975 -76)."

(3.) AT the relevant time the assessee was a Priest at St. Joseph's Monastery, Mannanam. During the relevant accounting periods be received substantial foreign remittances. The assessee claimed that these remittances are mass stipends received from a number of parties abroad and that he distributes the same to various other priests for performing the mass. For both the years a portion of the remittances were found to have been distributed for the same. The surplus that remained after such distribution was treated as the income of the assessee for both the years. It amounted to Rs. 69,519/ - for the year 1974 -75 and Rs. 55,162/ - for the year 1975 -76. In appeal the Appellate Assistant Commissioner held that receipts by clergyman in his capacity as clergyman constitute taxable income. In second appeal the Income Tax Appellate Tribunal concurred with the said view. It is thereafter at the motion of the assessee the above question of law was referred by the Income Tax Appellate Tribunal under S.256(1) of the Income Tax Act, for the decision of this Court.