Commissioner of Income Tax vs Vanamamalai Ramanuja Jeer Swamigal

Thanikkachalam, J.—At the instance of the Department, the Tribunal referred the following question for the opinion of this Court under S.

256(1) of the IT Act, 1961 :

Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the receipt of Rs. 12,156 representing the

Kanikkai and Sambhavanai received by the assessee herein from his disciples, was not in the nature of income and hence, is not liable to Income

Tax ?

The assessee, Shri Vanamamalai Ramanuja Jeer Swamigal, Nanguneri, Tirunelveli District, received by way of Kanikkai and Sambhavanai, a

sum of Rs. 12,156. The question was whether the amount so received was assessable as income to tax under the IT Act, for the asst. yr. 1974-

A similar question came up for consideration before the Tribunal in the case of the same assessee. Wherein the Tribunal held that those

receipts were only offerings made as presents out of personal regard, personal esteem and veneration for Shri Ramanuja Jeer Swamigal, and did

not constitute income from the exercise of any profession or vocation. The Tribunal also pointed out that there was no evidence to show that the

Swamiji had been exercising any profession or vocation. Following the earlier order passed in the case of the same assessee, the Tribunal in the

assessment year under consideration held that the sum of Rs. 12,156 was not income liable to tax.

Learned standing counsel for the Department submitted that the Jeer Swamigal is holding the office as the head of the Shri Vanamamalai Mutt.

The Swamigal is professing the cult of the Hindu Religion. Any amount brought by his followers would amount to income assessable to tax under

the IT Act. Therefore, it was submitted that the Tribunal was not correct in holding that both Kanikkai and Sambavanai are not taxable under the

IT Act.

On the other hand, learned counsel for the assessee while supporting the order passed by the Tribunal submitted that any personal gift made to

the Swamigal not connected with any profession or vocation, cannot be taxable under the IT Act.

Income includes not only those things which cl. 24 of S. 2 of the IT Act, 1961 declared that it shall include, but such things as the word signifies

according to its natural import. This clause merely adds artificial categories to the natural connotation of ""income"". The old sub-clause excluded

from the definition of ""income"" voluntary contributions made to a charitable trust ""with a specific direction that they shall form part of the corpus of

the trust"". The voluntary payment may be neither income nor capital in the hands of the respondent. Personal gifts and some voluntary payments

are not income, although at the same time they cannot be regarded as capital receipt. If the gift is connected with profession or avocation, that is

taxable. Where there is no connection between the gift made and the profession or avocation pursued by the assessee, such personal gifts cannot

be called as income taxable under the Act. A gift is personal in the sense that it is given to the person not as a holder of the office or employment,

but as a personal testimonial or as a token of personal esteem and veneration, or to mark an occasion, is not income. [See P. Krishna Menon Vs.

The Commissioner of Income Tax, Mysore, Travancore-Cochin and Coorg, Bangalore, , C. RAJAGOPALACHARIAR Vs. COMMISSIONER

OF Income Tax, MADRAS., , Temperley (Inspector of Taxes) vs. Smith (1957) 31 ITR 511 : 37 Tax Cas 18 , Maharaj Shri Govindlalji

Ranchhodlalji Vs. Commissioner of Income Tax, Ahmedabad, . So also the awards received by a non professional sportsman is not taxable

(1986) 157 ITR 52. In the present case Kanikkai and Sambhavanai were paid by the devotees to the Jeer Swamigal out of personal regard,

personal esteem and veneration. Swamiji is not exercising any profession or avocation. The voluntary offerings made by the devotees though

offered to the Swamiji, are not for any profession or avocation in which the Swamiji is indulged in. Since the voluntary contributions were made as

offerings to the Swamiji, it will not be considered as income under the IT Act in view of the foregoing decisions cited supra. In the case of the same

assessee, this Court in Tax Case No. 444 of 1981 by its judgment dt. 28th April, 1994 also came to the same conclusion. In view of the foregoing

reasons, we answer the question referred to us in the affirmative and against the Department. No costs.