Commissioner of Income Tax vs Ramchandraji Maharaj Ka Bada Mandir

G.G. Sohani, Actg. C.J.

By this reference u/s 256(1) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), the Income Tax Appellate Tribunal, Indore Bench, Indore, has referred the following questions of law to this court for its opinion :

"(1) Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was correct in law in entertaining the appeal of the assessee and holding that the Income Tax Appellate Tribunal should not have made the assessment in this case on a protective basis, but on a substantive basis ?

(2) Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was correct in law in holding that the alleged endowment dated August 20, 1954, by Seth Gopaldas is valid according to law ?"

The material facts giving rise to this reference, briefly, are as follows :

On August 20, 1954, one Seth Gopaldas executed a deed of endowment in respect of a substantial portion of his agricultural land for the upkeep and maintenance of a temple known as "Shri Ramachandraji Maharaj Ka Bada Mandir, Ichhawar". Thereafter, a separate account of the temple was opened in the account books of Seth Gopaldas. While framing the assessment of the assessee for the assessment year in question, the Income Tax Officer held that as Seth Gopaldas had retained full and complete control over the temple and its property, the income of the temple was assessable in the hands of Seth Gopaldas. The Income Tax Officer accordingly made assessment of the temple on a protective basis. The appeal preferred by the assessee from the order of the Income Tax Officer was dismissed. The assessee then took up the matter before the Tribunal. The Tribunal held that the protective assessment of the assessee had become final and that the income of the temple was not assessable in the hands of Seth Gopaldas on substantive basis. Aggrieved by the order passed by the Tribunal, the Revenue sought a reference and it is at the instance of the Revenue that the aforesaid questions of law have been referred to this court for its opinion.

The question whether the endowment made by Seth Gopaldas in favour of the assessee temple was or was not valid according to law, came up for consideration before a Division Bench of this court in Commissioner of Income Tax Vs. Ramchandraji Maharaj Ka Bada Mandir, . It was held by this court that the endowment made by Seth Gopaldas was a valid one. We see no reason to take a view different from that taken in Commissioner of Income Tax Vs. Ramchandraji Maharaj Ka Bada Mandir, . In this view of the matter, the Tribunal, in our opinion, was right in holding that the Income Tax Officer should have made assessment of the temple not on a protective basis, but on a substantive basis. The Tribunal was also right in holding that the deed of endowment dated August 20, 1954, by Seth Gopaldas, was valid according to law.

For the aforesaid reasons, our answers to both the questions referred to this court are in the affirmative and against the Revenue. In the circumstances of the case, parties shall bear their own costs of this reference.