SWAMI NARSINGH GIRI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference under Section 66 of the Indian Income-tax Act, 1922. Swami Narsingh Giri is the assessee. He was assessed to income-tax for the assessment year 1944-45. He submitted a return indicating an income of Rs. 1,152 as income from property. The Income-tax Officer found that there was afdeposit of Rs. 10,200 in the bank account standing in the assessee's name. Another item of Rs. 396 was credited in the bank account on account of interest. The Income-tax Officer treated these amounts of Rs. 10,200 and Rs. 396 as income of the assessee. The Income-tax Officer rejected the assessee's claim that these two items are exempted under Section 4 of the Act. Upon an appeal by the assessee, the Appellate Assistant Commissioner accepted the assessee's claim that those amounts were exempted under Section 4 of the Act. Upon further appeal by the department, the Appellate Tribunal reversed the decision of the Appellate Assistant Commissioner and restored the decision of the Income-tax Officer. The Tribunal rejected the assessee's claim for exemption. The Tribunal declined to state a case as requested by the assessee. But, on April 6, 1962, this court directed the Appellate Tribunal to state a case. Accordingly, the Appellate Tribunal, Allahabad, has drawn up a statement of the case, and referred to this court the following question of law :

(2.) ONE Swami Atma Nand Giri, who claimed to be a disciple of the assessee, was examined on behalf of the assessee. Swami Atma Nand Giri gave a number of statements. The witness said that Swamiji goes to places for imparting religious teachings and his disciples gave offerings to him. This is the assessee's source of income. In another statement the witness at first said that money, goods, gold and silver received by the assessee as offerings are meant for the association (sanstha). The witness however went on to state that Swamjji had complete control over this money. He may spend it as he likes. He can give it away to whomsoever he wishes to give.

(3.) THE question referred to the Tribunal expressly mentions Clause (i) of Sub-section (3) of Section 4 of the Act. THE assessee's claim for exemption under Clause (i) has to be rejected for two reasons. Firstly, Swami Atma Nand Giri admitted that the assessee has complete control over the money in question. He can spend it as he likes. Under these circumstances, it cannot be said that the money received from offerings had necessarily to he set aside for religious or charitable purposes. Secondly, Clause (i) requires that the income in dispute should have been derived from property held under trust or other legal obligation wholly for religious or charitable purposes. When a visitor makes offerings to the assessee, it cannot be said that such money is derived from property held under trust or other legal obligation. Consequently, such income is not covered by Clause (i).