Radhasoami Satsang, Saomi Bagh,Agra v. Commissioner Of Income Tax

A RADHASOAMI SATSANG, SAOMI BAGH,AGRA v. COMMISSIONER OF INCOME TAX NOVEMBER 15,1991 B [RANGANATH MISRA, CJ., AND KULDIP SINGH, J.) Income Tax Act, 1961-Sections 11 and 12~adhasoami Satsang -Property-Income of-Whether entitled to exemption. The then Satguru of the appellant-Creed was assessed for the C assessment years 1937-38, 1938-39 for the first time. He was a re-tired Govt. servant. His pension as well as the income from the institution were assessed together. On appeal, the Assistant Commissioner of Income-tax confirmed the assessments made by the Income-tax Officer. D The Income-tax Commissioner under reference made under section 66(2) of the Income-tax Act, 1922 held that the offerings made to the assessee-Satguru were offerings· as held in trust and same were exempted under section 4(3)(1) of the Act. When an application under Section 35 of the Act was made for E ratification, whether the offerings received by the assessee consisted of interest income, property income, and income derived from sale of books and photographs etc. to be excluded, the Commissioner directed deletion thereof. For the year 1939-40, though the Income-tax Officer did not F allow exemption u/s.4(3)(1) of the Act, the Appellate Assistant Com-missioner allowed exemption. Till 1963-64 the appellant was not taxed and its refund appli-cations were accepted by the respondent-Revenue. For the assessment years 1964-65, 1965-66, 1966-67, 1967-68, 1968-69, 1969-70, the assessee-appellant was assessed, treating it to be an association of persons, and held that the donations and contri-butions received voluntarily had limited religious use. When the appellant-assesses appealed, the appellate authority H upheld the assessme~ts. Against the orders of the Appellate authority the assessee ap-pealed before the Income-tax Tribunal. The Tribunal allowing the appeals of the assessee, held that the assessee was entitled to the exemption claimed under Section 11 of the Income-tax Act, 1961. On the question, referred to the High Court by the Tribunal, "Whether on the facts and in the circumstances of the case the B Tribunal was justified in holding that the income derived by the Radha Swami Satsang, a religious institution, was entitled to ex-emption under Sections 11 and 12 of the Income Tax Act, 1961 ?", the High Court answered the question in favour of the Revenue-respondent, holding that the trust deed was revocable and the con-ditions for exemption under Sections 11 and 12 of the Act were not C satisfied . Allowing the appeals of the assessee, this Court, HELD: 1.01. Assessments are quasi judicial. Each assessment year being a unit, what is decided in one year may not apply in the D following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order; it would not be at all appropriate to allow the position to be changed in a subsequent year. (320H, 321 A-BJ E 1.02. No formal document is necessary to create a trust. The conditions which have to be satisfied to entitled one for exemption are : (a) the property from which the income is derived should be held under trust or legal obligation, (b) the property should be so held for charitable or religious purposes which enure for the benefit F oHhe public. [317 E-GJ 1.03. The property was given to the Satguru for the common purpose of furthering the objects of the Sat Guru. The property was therefore subject to a legal liability of being used for the religious or charitable purpose of the Satsang. (319 E, F) 1.04. The Tribunal was justified in holding that the income derived by the Radhasoami Satsang was entitled to exempti9n under Sections 11 and 12 of the Income Tax Act, 1961. (321 DJ Patel Chhotabhai and Ors. v. Jnan Chandra Bask and Ors., AIR 312 314