AHMEDABAD RANA CASTE ASSOCIATION versus COMMISSIONER OF INCOME TAX, GUJARAT

Citation: [1972] 1 S.C.R. 744 · Decided: 16-09-1971 · Supreme Court of India · Bench: K.S. HEGDE · Disposal: Appeal(s) allowed
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Judgment (excerpt)

744 
AHMEDABAD RANA CASTE ASSOCIATION 
v. 
COM.\fISSIONER OF INCOME TAX, GUJARAT 
September l 6, 1971 
(K. S. HEGDE AND A. N. GROVER, JJ.] 
Income-tax Act, 1922, s. 4(3) (i) and Income-tax Act, 1961 s. ll-
lncome of assessee to be utilised for benefit of a community-Beneficia-
ries· members of the community resident in a city and others 
adniitted 
according to caste customs and usage-If uriited by common quality of 
impersonal nature. 
The assessee was an association of penons and held various properties 
for the purposes set out in its constitution. 
One of the purposes was the 
management of the movable and immovable properties of the Rana com-
munity of the City of Ahmedabad, doing 
acts to improve education in 
the community and to give medical help to the community, etc. The de-
finition of Rana community. comprised two classes---one class consisting 
of those who are natives .of Ahmedabad while the other consists of such 
persons wh~ are admitted by the Rana caste according to the old custom 
or the usage of the community. 
On the question whether the income of the assessee-trust was exempt 
under s. 4(3) (1) of the lncom<>-tax Act,. 1922, or s. 11 of the Income-
tax Act, 1961, the High Court held that since the second class of persons 
consisted of those who had been accepted by the caste according its old 
CllStom or usage, all the beneficiaries 
were 
not united by a common 
characteristic or attribute of an impersonal nature and 
therefore, 
the 
beneficiaries did not constitute a comIDunity or a section of the community 
Allowing the appeal to this Court, 
HELD : An object beneficial to a section of the public is an object of 
general public utility. 
But the section of the community sought to be 
benefitted must be sufficiently defined and identifiable by some 
common 
quality of a public or impersonal nature. The common quality, in the 
present case, uniting the potential beneficiaries consists of being members 
of' the Rana caste .or community of Ahmedabad whether as natives or as 
being admitted to that caste or community under custom or usage. 
The 
mere fact that a person of the Rana community who is not an original 
native of Ahmedabad has to prove his credentials and according to the 
custom and usage of that community cannot introduce a personal element. 
Whenever a question arises whether a person belongs to a particular com-
llUJnity or caste the custom or usage prevailing in that community 
must play a decisive and vital pl!rt. 
The personal element or personal 
relationship which takes a group out of a section of the community is 
their personal relalionship to a single propositus or to several prop<>-
siti or a relationship of a similar nature. 
Therefore, the members of 
the Rana caste who are not natives of Ahmedabad but who come to 
reside there and are aecepted as members of that caste according to its 
usage and customs could be said to have a relationship of an impersonal 
nature. [748 B-D; 749 D-G; 750 B-D] 
Hazrat Pirmohamed Shah Sahtb Roza Committee v. Commissioner of 
Income-tax, Gujarat, 58 I.T.R. 360, Com11Ussioner of Income-tax, Madras 
v. Andhra. Chamber of Commerce, 55 I.T.R. 722, Re Compton, Powell v. 
Compton & Ors., (1945) Qi, 123, Trustees of the Londonderry Presby-
ttrian Church House v. Commissioner!_ of Inland Revenue, 27 T.C. 431 
and Oppenheim v. Tobacco Securities :rrust Co. Ltd. & Ors., (1951) A.C. 
c 
D 
E 
F 
G 
H 
A 
B 
RANA CASTE ASSCN. v. C.I.T. (Grover,. J.) 
745 
297, referred to. 
CIVIL APPELLATE JURISDICTION: Civil Appeals Nos. 2146-
2148 of 1968 and 1284 to 1286 of 1971. 
Appeals by certificate/special leave from the judgment and 
order dated July 25, 1967 of the Gujarat High Court in Income-
tax Reference No. 4 of 1966. 
S. T. Desai, R. P. Kapoor for I. N. Shroffi for the appellant 
(in all the appeals). 
S. K. Ai,var, R. N. Sachthey and B. D. Sharma, for 
the 
C 
respondent (in ali the appeals). 
D 
E 
F 
G 
H 
The Judgment of the Court was delivered by 
Gro,·er, 
J. 
These 
appeals 
(C.As. 
1284-1286/71) are 
by special leave from a judgment of the Gujarat High Court in 
an Income tax Reference. Originally the appeals had been filed 
by certificate (C.As. 2146-2148/68) but th~t_was found to be 
defective as no reasons were st~ted therein. 
The Reference relates to the assessment 
years 
1960-61, 
1961-62 and 1962-63 the relevant accounting years being the 
financial years ending 31st March 1960, 31st March 1961 and 
31st March 1962. During the relevant
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