Donations to Hindu temples do not qualify as charitable contributions under Section 15-B of the Income Tax Act, as they primarily benefit a specific religious community, failing the public utility criterion.

1. These two references arise out of assessments to income - tax for the year 1959-60 of two partners of a firm, S.M.N. Mahadevan Chettiar, which carries on business at Madurai. During the year of account relative to the assessment year abovementioned, the two assessees respectively donated Rs. 16,000 and Rs. 24,000 for the renovation of Sri Meenakshi Sundareswarar Temple at Paramakudi in the Ramanathapuram Dt. The temple is a public one and has been declared to be such under the provisions of Madras Act II of 1927. It is, however, claimed that the trusteeship of the temple vests hereditarily in a particular family. That circumstance is of no importance to the present case.

2. The two assessees claimed rebate of tax under S. 15 - B of the Indian Income - tax Act, 1922, on the amounts paid by them for the renovation of the temple. The Income - tax officer did not accept the claim, as in his view, a Hindu temple could not he regarded as a charitable institution; nor according to him could any contribution given for its renovation be one for an object of any general public utility. On appeal, the Appellate Assistant Commissioner took a different view, holding that donations to a religious institution would be for a charity. He also accepted the case of the assessees that the temple, to which the contributions were made by them, was open to all the communities and that, therefore, the conditions prescribed in S. 15 - B were satisfied in the case. On this conclusion, the assessees were granted a rebate of tax as claimed by them. The department then took up the matter on further appeal to the Appellate Tribunal. The Tribunal construed the term "charitable purpose" employed in S. 15 - B strictly, and held that it could not include a religious purpose. The order of the Appellate Assistant Commissioner allowing the rebate was set aside.

3. The Department has raised before the Tribunal an alternative case as well. It contended that even if a religious purpose were deemed to be a charitable purpose, donation to a Hindu temple being one which could benefit only a particular community, the provisions of S. 15 - B(2)(ii) would preclude the assessees from getting the benefit of the Section. The Tribunal did not deal with that contention for the reason that it was not necessary for them to do so, in the view they took of the case.

4. The present references arise out of the order of the Tribunal, involving a single point for determination, namely, whether a donation for a purely religious purpose by an assessee would entitle him to obtain a rebate of tax under S. 15 - B. The following question referred to us in T. C. 76 of 1962 can be taken as a typical one.
"Whether the disallowance of the rebate of tax under S. 15 - B of the Act on the donation of Rs. 16,000 by the assessee to Sri Meenakshi Sundareswarar temple is right in law ?"
The answer to the foregoing question depends on the true construction of S. 15 - B of the Income - tax Act of 1922. The Act provides for exemption from tax of income received from properties held on trusts for religious and charitable purposes. It also provides that even if there is no dedication of the property itself to the trust of the kind mentioned above, an assessee, if he makes a payment for the benefit of a charitable institution or a fund, can obtain a rebate of tax relative to the amount paid, when he is assessed to tax on his own income. Thus, S. 4(3) of the Act provides that income received from property held in trust or other legal obligation wholly for religious or charitable purposes, shall be exempt from taxation.
The Section carries with it a definition of the term "charitable purpose". We shall have to refer to that definition at a later stage of this judgment.

5. S.15 - B deals with the rebate of - tax in respect of payment made to charitable institutions, or funds of t