TaxTMI 
TaxTMI 
1943 (8) TMI 1
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.... there came into existence in this colony for the benefit of Satsangis, model houses, educational institutions, model industries, workshops, a hospital, a dairy and an agricultural farm. The colony now occupies about 3,500 acres of land covered with costly buildings and it holds assets valued at about 60 lakhs of rupees. The Income-tax Officer of Agra treating all the contributions made by the Dayal Bagh Satsangis and all the property which had grown out of these contributions as also all the income which arose out of such properties as the personal property of Sahebji Maharaj started proceedings against him personally for assessment to income-tax. As a result, this action was raised by the plaintiff against the Secretary of State for India in Council as the defendant No. 1 and Sahebji Maharaj as the defendant No. 2 which was continued after the death of the latter against his widow and two sons as the defendants 2 to 4 for a declaration "that all the offerings, all the properties, movable and immovable, and Government securities, standing in the name of the plaintiff Sabha and all business run by the plaintiff under the name and style of Model Industries, Tanneries, Brickfields....
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....intiff Sabha came into existence, the position which Sahebji Maharaj occupied in relation to the Sabha and in relation to the followers of this faith, to Sahebji Maharaj personally and to the Sabha. The Radha Swami faith was founded in the year 1861 by Shiv Dayal Singh, a Khattri resident of Agra. Radha Swami Dayal after whom the faith is named is the name given to the deity by the followers of this faith. The deity, according to the tenets of this faith, is represented on this earth by a human being who is called the Sant Satguru. Human spirit, according to this faith, is tied up to the material world by chains of mind and matter, and it cannot secure emancipation and unity with God, which is the object of all human endeavour, without the assistance of God's representative on earth, namely the Sant Satguru. In order to attain this unity the service and devotion of human being to the Sant Satguru is essential, and this devotion is enjoined by this faith to be absolute in body, mind and riches. A follower of this faith has to be initiated into certain practices by the Sant Satguru and is enjoined to keep his company as much as possible, and this association is called Sat Sang....
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....laces of worship and residence of this community and partly for the other objects of this faith. And in 1902 it became necessary to establish a Council to hold the properties and to administer the affairs of this religious community. In 1904 a trust deed was also executed vesting the properties in certain trustees. In the rules and regulations by which the Council was established as also in the trust deed the Sant Satguru was, in accordance with the tenets of the faith given a position of absolute and overriding authority both upon the trust property and upon the administrative council. After the schism of 1913 the Swami Bagh party came in possession of the religious shrines and of the properties which were vested in the trustees under the trust deed of 1904. A controversy now sprang up between the two sections as to the management of the shrines and the administration of trust property and this controversy brought into fore front the question whether the property held by the trustees under the deed of 1904 which admittedly had come into existence as a result of offerings made to the Sant Satguru for the time being was impressed with a public trust of a religious or charitable n....
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....s were started. By 1921 sufficient progress had been made in these projects to realise the necessity of registering the Sabha, which had been functioning since 1910 and whose president since 1913 was Sahebji Maharaj, as a charitable society under the Act XXI of 1860. In 1926 a hospital was established. In the same year a dairy and an agricultural farm were established. In 1927 a technical college was started. In 1930 a girls' college was founded, and in the same year a provident fund called Jiwan Udhar Fund was established for the benefit of Satsangis which holds now a capital of 10 lakhs of rupees. And up to the time when Sahebji Maharaj died on June 24, 1937, the colony had an uninterrupted record of progress in all its activities-religious, charitable, educational and industrial. The Sabha was established by a unanimous vote of the followers of the Radha Swami faith in a session held at Ghazipur on March 26, 1910. At the second session of the Sabha held on 29th December, 1910, it framed and passed its constitution and bye-laws which were amended at its 4th, 19th, 31st, 37th, 52nd (special) and 53rd sessions held on 29th December, 1912, 9th October, 1921; 17th April, 1927,....
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....at the pleasure of the Sant Satguru of the time. 2. After the departure of the Sant Satguru and before his reappearance in human form, the Sabha shall continue to hold office for a period of two years. 3. If a longer interim than two years ensues between the departure of the Sant Satguru and his re-appearance, the Sabha shall stand dissolved unless the Satsangis affiliated to it desire it to continue. 18. All offerings, movable and immovable, howsoever and through whomsoever presented to the Supreme Creator, Radha Swami Dayal, or to the Radha Swami Satsang Sabha, and all properties, movable and immovable, acquired or that may be acquired from such offerings or that may be handed over or placed in the charge of the Sant Satguru, the executive committee or any other committee or any individual member, manager or agent, or that may come in possession of any one of them in their official capacity as such, shall always remain vested in the Sabha." Prior to the amendment of 1937, clause (c) of section 2 of the memorandum of association and bye-law No. 1 of the Sabha, which we have quoted above, were somewhat differently worded. Clause (c) of section 2 before the amendment was....
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....n the judgment of the trial Court on pages 79 and 80 of our printed record. For the founding of the colony, for the establishment of model houses, educational institute, model industries, the hospital, the dairy, the technical college, the girls' college and provident fund etc., in fact for all important projects which were undertaken after the establishment of the Sabha in the interest of Satsangis of Dayal Bagh section, there are proceedings of the Sabha for the initiation of those projects. The title deeds of the land in occupation of the colony and of the model houses of the colony all stand in the name of the Sabha. The Sabha receives grant from the Government for its educational and charitable institutions and the Government has acquired property under the Land Acquisition Act for its benefit. The Sabha raises and defends actions in law courts in its own name and admittedly all the property, movable and immovable, which at present exists at Dayal Bagh or outside in which the followers of the Radha Swami faith of Dayal Bagh section are interested as a religious community, stands recorded in the name of the Sabha and is vested in the Sabha. There is, however, one class o....
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....e remarkable features in the constitution and the bye-laws of the Sabha. Clauses (a), (b) and (c) of section 2 of the memorandum of association which set out the objects of the Sabha were till the year 1937 governed by a proviso that "the mandates, if any, of the Sant Satguru of the time, who is recognised as a representative of the Supreme Creator, Radha Swami Dayal, shall be paramount and absolute in all matters referred to above." It is true that by the amendment of 1937 it has been made clear that the paramountcy and absoluteness of the mandates of Sant Satguru are now confined to "all matters relating to the furtherance of the religious and charitable objects specified above," but before the amendment it was open to doubt whether the power of the Sant Satguru was so restricted and was not general enough to permit him to change the constitution itself if he so desired. The bye-law No. 17, as it was before the amendment of 1922, provided that "all the properties of the Sabha on the dissolution of the Sabha shall revert to the Satguru of the time as the representative of Radha Swami Dayal." Bye-law No. 1, as it stood prior to the amendment of 1937, provided that "the Sabha shall ....
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.... this community and for holding its property free from disputed succession, creation of a juristic person was necessary and the Sabha was registered as a society to serve that end. It is possible that the presideat of the society, by reason of his position as a spiritual head of the sect, could dominate the members of the Sabha who were his devotees in religious faith, but there is no reason to suppose that the Sabha was a sham body and had no independent legal existence of its own. Undoubtedly Sahebji Maharaj wanted a juristic person to hold the property of the community and to administer the affairs of the community. Undoubtedly the Sabha which consisted of his own followers would ordinarily act in accordance with his wishes. There is no reason why he should bring into existence a sham Sabha when his objects could be achieved by having a genuine Sabha also. The question whether the Sabha was validly registered under Act XXI of 1860 raises two different considerations. The objects of the Sabha, as set out in its memorandum of association, were religious and charitable. The Societies Registration Act (XXI of 1860) permits registration of societies for charitable purposes and cha....
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....nd Dayal Bagh section about the administration of shrines referred to above and which was finally decided by the Privy Council, Sahebji Maharaj was examined as a witness in the Court of the Civil Judge of Benares and his deposition in that case, after his death, has been exhibited in this litigation. In that deposition he has made several statements with regard to his position in relation to the offerings which were made to him and in relation to the property which is vested in the Sabha. At page 160 of our record he stated as follows:- "The properties with the Sabha do not belong to Sant Satguru as proprietor or owner. As a representative of Radha Swami Dayal they are managed by him and they do not belong to him." In the written statement which he filed in this suit before his death and in the written statement which his widow and sons have filed after his death, both have disclaimed any interest in the property. Indeed defendant No. 1 concedes that the properties are nominally held by the Sabha and the properties go with the office and Sant Satguru's heirs have no personal interest in t....
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.... to determine the true legal characteristics of these offerings. When a Hindu makes an offering to an idol it is ordinarily, having regard to Hindu law and usage, impressed with a trust and it cannot be regarded as the personal property of the priest officiating in the temple. Similarly, if a Hindu makes a present to a Hindu religious person, ordinarily it is the personal property of that person and is not impressed with any trust. There can also be no doubt that having regard to the teachings of the first three Gurus of the Radha Swami sect and the conditions which prevailed in their time the offerings made by Satsangis to those Satgurus were not impressed with any public trust of a religious or charitable nature and in any case the devotees who made those offerings did not by their words or deeds impress those presents with any public trust of a religious or charitable nature. But it is possible for religious conceptions with regard to these offerings to change. Even the first three Gurus did not make any personal use of these offerings and it is possible for their successor to take a different view of the matter and to regard them as property in the nature of trust. This is a po....
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....n accordance with the well-known views of Sahebji Maharaj and the practice prevailing in the Sabha no personal use of these offerings would be made by Sant Satguru and they would automatically vest in the Sabha and would be utilised for the benefit of Satsangis. If so, a trust may well get impressed on the offerings. It is also possible that the offerings were given by the devotees absolutely to Sant Satguru, but the Sant Satguru received them subject to a condition which he himself imposed by his own wish that they should not serve any personal use of his and that they should vest in the Sabha and be held by it for the benefit of Satsangis. Even then a trust may get impressed upon it though the founder in each case. would be different. The beneficiaries in both cases would be the same. It is also possible that the Sant Satguru after receiving the gift without any condition subsequently made over the offerings to the Sabha to be held by the Sabha for the benefit of the community. Whatever view may be taken of this matter it leads to the conclusion that Sahebji Maharaj did not get any personal interest in the offerings and if he got any he lost all personal and beneficial interest i....
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..... Now Sahebji Maharaj was undoubtedly an assessee within the jurisdiction of the Income-tax Officer of Agra and it may be conceded that the said officer had power under the Indian Income-tax Act not only to assess him but also to investigate and find the property of the assessee which was liable to tax. In determining the property of the assessee the Income-tax Officer may come to a right conclusion or to a wrong conclusion. But if his decision is wrong it could be challenged under the Act by the assessee in the manner provided by the Act and it could not be challenged by a suit in civil Court. It may further be conceded that if the assessee had made a default in payment of the tax and if the demand had been certified under Section 46 of the Income-tax Act it could be recovered as an arrear of land revenue, and to realise the demand the Collector under Section 162 of the U.P. Land Revenue Act (III of 1901) could have sold any property which he found was owned by the assessee and a suit to question the processor the Collector would have been barred under Section 233(m) of the U.P. Land Revenue Act (III of 1901). But the question still remains whether the jurisdiction, which the I....