Income from property dedicated to deities is exempt from income tax under Section 4 (3) (i) of the Income-tax Act, 1922.

( 1 ) THIS is a reference under Section 66 (i), Income-tax Act, at the instance of the assessee in which the following questions are propounded for the opinion of the Court: (1) Whether the legal obligation created by the deed was rightly construed by the Tribunal as a private religious trust? If so, (2) Whether the last paragraph of Section 4 (3) (xii) enumerated above governs both the words "trust" and; "other legal obligations" as mentioned in Section 4 (3) (i) or only "trusts"?

( 2 ) THE income sought to be assessed in this case was income from property which admittedly was devoted to religious purposes. The only difference between the parties was whether these properties which produced the income, which were admittedly debutter properties, were properties held in trust for deities or properties dedicated to the deities. The question arose upon the true construction to be given to the phrase "held under trust or other legal obligation wholly for religious or charitable purposes" appearing in Section 4 (3) (i), Income-tax Act. To this sub section there is appended an Explanation which is in these terms :"in this sub-section, 'charitable purpose' includes relief of the poor, education, medical relief, and the advancement of any other object of general public utility but nothing contained in Clause (i), Clause (ia) or Clause (ii) shall operate to exempt from the provisions of this Act that part of the income of a private religious trust which does not enure for the benefit of the public. "

( 3 ) IT will be seen that although under Section 4 (3) (i) income derived from property held under trusts or other legal obligation wholly for religious or charitable purposes is exempt from taxation, the Explanation makes it clear that only that part of an income of a private religious trust is exempted which enures for the benefit of the public and that part which does not enure for the benefit of the public is not exempt from taxation.

( 4 ) IT will be seen that what is not exempt from taxation is that part of the income of a private religious trust which does not enure for the benefit of the public and the question arose in an earlier case as to whether the words "private religious trust" were wide enough to cover all debutter property. This Court held in the case of Sree Sree Iswar Gopal Jew v. Commr. of Income-tax, West Bengal, (1950) 18 I. T. R. 743 (Cal.), that where the income arose from property dedicated to a deity as opposed to property held by trustees in trust for a deity, the provisions exempting (withdrawing the exemption from?) such portions of the income as did not enure for the benefit of the public had no application, and that where the income arose from dedicated property as opposed to property held on trust for the deity, the whole of the income was exempt from taxation.

( 5 ) IT appears clear that the Appellate Tribunal regarded this income as income arising from property dedicated to deities rather than to property held in trust for deities. But in the view of the Appellate Tribunal it mattered not as no distinction could be drawn between property held under a private religious trust and property dedicated to a private deity. The case of course was decided by the Appellate Tribunal before the decision of this Court to which I have made reference.

( 6 ) MR. Pal admits that if the income in this case arose from property dedicated to deities, no distinction could be drawn between this case and the authority of this Court which I have cited. However his contention is that the income in this case was income derived from property held on trust for deities and not from property dedicated to the deities. It seems from an Arpannama executed by the Shebaits on 21/11/1910 that the properties of Arpannama recite that a document is necessary for the following reasons:"but although the aforesaid properties are really ancient debutter properties as there is no written deed of Arpannama and in order to remove our