The income of the assessees did not qualify for exemption under Ss. 4(3)(i) and (ii) of the Indian Income-tax Act due to the nature of the income and the status of the assessees as not being a religious or charitable institution.

Judgment

SHAH, J. : These six appeals raise a common question as to the liability of the assessees to pay income-tax in respect of certain receipts known as Annadan during the assessment years 1946-47 to 1951- 52. The assessees are a Hindu Undivided family and engage themselves as Pandas or priests who assist devotees in performing worship and ceremonies especially connected with pilgrimage to the temple of Jagannath at Puri, and for services rendered by them they receive certain emoluments which are called Dakshina or Pranami It is not disputed that amounts received as Pranami are profits or gains of business or vocation carried on by the assessees and liable to income-tax. Besides Pranami the assessees collect form the pilgrims amount of money known as Annadan under writings executed by the pilgrims. In these appeals the assessees claim that those amounts are not liable to be included in their taxable income, because they are exempt under Ss. 4(3) (i) and (ii) of the Indian Income-tax Act. The assesses claim that "their estate originally and virtually represents the Guru Gadi created and established for the main purpose of propagating the cult of Lod Jagannath in different parts and among different peoples embracing Hindu religion" and the offerings known as Annadan received by them on condition utilising the same for the Bhog (food offering) in the temple of Jagannath are exempt from liability to pay income-tax because, the Annadan offering are income derived from property held under a trust and in any event, they are income of a religious institution derived from voluntary contributions and applicable solely to religious purposes. In support of their plea the assessees rely upon the Annadan Patras signed by the pilgrims, in the following form :

"Written by.......of village........Thana .....etc. Corning to the sacred place of Thana Sri Jagannathji and having the Darsan, I pay upto .....(name of Panda), Gaudbad Sahi, Puri Town for the Bhog of Sree Jagannathji, Rs..........The Pandaji will utilise this amount for the Bhog of Jagannathji and the Prasad will be enjoyed by himself and the people of the district to which I belong. I, .......signed this Atika Annadan".

The amounts received or collected from the pilgreims under Annadan Patras (which were also styled as Patras) were credited in an account known as Annadan Account, and expenses of "food offerings" to the deity were defrayed out of that fund. The assessees claim that out of the unspent balance they purchased property in the name of the deity Jagannath.

2. The Income-tax Officer held that Annadan received by the assessees was not exempt from liability to tax, for in his view there was no valid trust in writing and there was no authority to enforce the obligation that the amount received by the assessees be spent for religious and charitable purposes, that the assessees were not shebaits appointed under a writing and the income sought to be taxed was in the nature of voluntary contributions and was not derived from property held under a trust or other legal obligation In appeal the Appellate Assistant Commissioner Cuttack Range, confirmed the order. He held that the assessees as Pandas held a trust fund in their charge every year from which no income was received but a part of the fund was spent by them for the purpose for which the trust was created and the balance was appropriated by them to their own use and that they did not derive income from voluntary contributions applicable solely of religious or charitable purposes. The Income-tax Appellate Tribunal confirmed the order observing :

"Except the bare assertion of the assessee before us, there is no evidence to show that the pilgrims understood either the character or the implication of the document they were signing. The assessee has not shown either that he gave receipts to the pilgrims indicating his trustee position and his undertaking to employ the receipts for the purposes of the supposed trust. Out of t