RADHASOAMI SATSANG, SAOMI BAGH,AGRA versus COMMISSIONER OF INCOME TAX

Citation: [1991] SUPP. 2 S.C.R. 312 · Decided: 15-11-1991 · Supreme Court of India · Bench: RANGANATH MISRA · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
RADHASOAMI SATSANG, SAOMI BAGH,AGRA 
v. 
COMMISSIONER OF INCOME TAX 
NOVEMBER 15,1991 
B 
[RANGANATH MISRA, CJ., AND KULDIP SINGH, J.) 
Income Tax Act, 1961-Sections 11 and 12~adhasoami Satsang -
Property-Income of-Whether entitled to exemption. 
The then Satguru of the appellant-Creed was assessed for the 
C 
assessment years 1937-38, 1938-39 for the first time. He was a re-
tired Govt. servant. His pension as well as the income from the 
institution were assessed together. 
D 
E 
F 
G 
On appeal, the Assistant Commissioner of Income-tax confirmed 
the assessments made by the Income-tax Officer. 
The Income-tax Commissioner under reference made under 
section 66(2) of the Income-tax Act, 1922 held that the offerings 
made to the assessee-Satguru were offerings· as held in trust and 
same were exempted under section 4(3)(1) of the Act. 
When an application under Section 35 of the Act was made for 
ratification, whether the offerings received by the assessee consisted 
of interest income, property income, and income derived from sale 
of books and photographs etc. to be excluded, the Commissioner 
directed deletion thereof. 
For the year 1939-40, though the Income-tax Officer did not 
allow exemption u/s.4(3)(1) of the Act, the Appellate Assistant Com-
missioner allowed exemption. 
Till 1963-64 the appellant was not taxed and its refund appli-
cations were accepted by the respondent-Revenue. 
For the assessment years 1964-65, 1965-66, 1966-67, 1967-68, 
1968-69, 1969-70, the assessee-appellant was assessed, treating it to 
be an association of persons, and held that the donations and contri-
butions received voluntarily had limited religious use. 
When the appellant-assesses appealed, the appellate authority 
H 
upheld the assessme~ts. 
312 
I 
\ l 
~~- -
• 
RADHASOAMI SATSANG v. C.I.T. 
313 
Against the orders of the Appellate authority the assessee ap-
A 
pealed before the Income-tax Tribunal. The Tribunal allowing the 
appeals of the assessee, held that the assessee was entitled to the 
exemption claimed under Section 11 of the Income-tax Act, 1961. 
On the question, referred to the High Court by the Tribunal, 
"Whether on the facts and in the circumstances of the case the B 
Tribunal was justified in holding that the income derived by the 
Radha Swami Satsang, a religious institution, was entitled to ex-
emption under Sections 11 and 12 of the Income Tax Act, 1961 ?", 
the High Court answered the question in favour of the Revenue-
respondent, holding that the trust deed was revocable and the con-
ditions for exemption under Sections 11 and 12 of the Act were not C 
satisfied . 
Allowing the appeals of the assessee, this Court, 
HELD: 1.01. Assessments are quasi judicial. Each assessment 
year being a unit, what is decided in one year may not apply in the D 
following year but where a fundamental aspect permeating through 
the different assessment years has been found as a fact one way or 
the other and parties have allowed that position to be sustained by 
not challenging the order; it would not be at all appropriate to 
allow the position to be changed in a subsequent year. (320H, 321 
A-BJ 
E 
1.02. 
No formal document is necessary to create a trust. The 
conditions which have to be satisfied to entitled one for exemption 
are : (a) the property from which the income is derived should be 
held under trust or legal obligation, (b) the property should be so 
held for charitable or religious purposes which enure for the benefit F 
oHhe public. [317 E-GJ 
1.03. 
The property was given to the Satguru for the common 
purpose of furthering the objects of the Sat Guru. The property was 
therefore subject to a legal liability of being used for the religious 
or charitable purpose of the Satsang. (319 E, F) 
G 
1.04. 
The Tribunal was justified in holding that the income 
derived by the Radhasoami Satsang was entitled to exempti9n under 
Sections 11 and 12 of the Income Tax Act, 1961. (321 DJ 
Patel Chhotabhai and Ors. v. Jnan Chandra Bask and Ors., AIR 
H 
314 
SUPREME COURT REPORTS 
[1991] SUPP. 2 S.C.R. 
A 
1935 Privy Council 97; Acharya Jagdish-Warmiand Avadhuta & Ors. v. 
Commissione~ of Police, Calcutta & Anr., (1983] 4 SCC 522; The Secre-
tary of State for India in Council v. Radha Swami Sat Sang, 13 ITR 520; 
All India Spinners' Association v. Commissioner of Income Tax, Bombay, 
12 ITR 482; T.MM Sankaralinga Nadar & Bros. & Ors. v. Commis- · 
sioner of Income-tax, Madras, 4 ITC 226; Hoystead & Ors. v. Commis-

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