1. These are connected cases. The Commissioner of Income-tax, Bihar-I, Patna, is the applicant in all cases. The same assessee is the respondent in all the cases. The matter relates to the assessment years 1967-68 to 1975-76. The Income-tax Appellate Tribunal in R. A. Nos. 1 to 9 (Patna) of 1981 has referred the following common questions of law for the decision of this court in the above cases. The questions referred to this court are:
'(i) Whether, on the facts and in the circumstances of the case, the principle of mutuality exists in the R.S.S. ?
(ii) Whether, on the facts and in the circumstances of the case, the amount received from members and devotees can be taken to be Gurudakshina and held to be exempt
2. We heard counsel for the Revenue as also counsel for the respondent-assessee. The facts of this case lie in a narrow campass. The assessments were made on the respondent-assessee in the status of an association of persons for the years 1967-68 to 1975-76. The assessments were of a protective nature. The assessee's income is by way of receipt from members as Gurudakshina. It is also seen that Gurudakshina is also received from devotees. The Income-tax Officer held that Gurudakshina received by the assessee is taxable under the provisions of the Income-tax Act. He computed the income of the assessee in the following figures for the respective assessment years 1967-68 to 1975-76 :
Rs. 48,000, Rs. 71,000, Rs. 50,000, Rs. 20,000, Rs. 25,000, Rs. 20,000, Rs. 15,000, Rs. 20,000 and Rs. 15,000.
3. The assessment orders are annexures A-1 to A-9. In appeal, it was noticed that R.S.S. has its head office at Nagpur and hence assessments should be on the respondent-assessee only as a protective measure. The Appellate Assistant Commissioner further held that the Gurudakshina receipts from members of the organisation are exempt on the ground of mutuality. In coming to the said conclusion, he placed reliance on instructions of the Central Board of Direct Taxes contained in letter No. 290/26/ M.O./I.M. (Inv.), dated December 19, 1978. On the above basis the assessments were cancelled. The orders passed by the Appellate Assistant Commissioner dated December 4, 1979, and March 19, 1980, are annexures B-1 and B-2. The Revenue took up the matter in appeals before the Income-tax Appellate Tribunal, Patna Bench. The Income-tax Appellate Tribunal
heard and disposed of the appeals for all the nine years by a common order dated October 8, 1980, evidenced by annexure C-2. Before the Income-tax Appellate Tribunal, it was common ground that proceedings arising from the assessee's Kendriya Karjayalaya, Nagpur, was the subject-matter of the decision by the Income-tax Appellate Tribunal, Bombay Bench, in I.T.As. Nos. 202, 422 and 421 (Nag) of 1975-76 and I.T.As. Nos. 315 and 355 (Nag) of 1975-76 and same issues arose for decision therein. Therefore, in these cases, the Patna Bench of the Income-tax Appellate Tribunal referred to the decision rendered by the Bombay Bench of the Income-tax Appellate Tribunal in the aforesaid cases dated July 26, 1980, annexure C-1, and also placed reliance on the communication of the Central Board of Direct Taxes evidenced by No. 290/26/M.O./I.M. (Inv.), dated December 19, 1978, and concluded thus in para 9 of its order dated October 8, 1980 :
'Gurudakshina from Swayamsevaks on the ground of mutuality cannot be subjected to tax in the hands of the assessee. ...'
4. Following, the aforesaid conclusion of the Tribunal, Bombay Bench, the finding of/the Appellate Assistant Commissioner was maintained by the Patna Bench and the appeals preferred before it were dismissed. It is thereafter on motion by the Revenue under Section 256(1) of the Income-tax, the questions of law formulated hereinabove have been referred by the Income-tax Appellate Tribunal, Patna Bench, for the decision of this court.
5. The main complaint by counsel for the Revenue before us was that in these cases, the Income-tax Appellate Tribunal, Patna Bench, failed to consider the question that arose before it in detail and failed to render appropriate findings as to whether Gurudakshina received by the respondent-assessee from its members is exempt from income-tax. Counsel for the Revenue further submitted that the finding of the Appellate Assistant Commissioner was only to the effect that Gurudakshina received from the members of the organisation was exempt on the ground of mutuality and the Appellate Assistant Commissioner did not find that Dakshina and donation received from others is equally exempt. On the other hand, counsel for the assessee submitted that it was common ground before the Tribunal that the question that arose before it was similar to the one that was considered by the Income-tax Appellate Tribunal, Bombay Bench, in I.T.As. Nos. 202, 422 and 421 (Nag) of 1975-76 and I.T.As. Nos. 315 and 355 (Nag) of 1975-76. These cases were similar to the one that arose for consideration before the Bombay Bench. It was on this basis that the Patna Bench
of the Income-tax Appellate Tribunal referred to the decision of the Bombay Bench and the findings and conclusions arrived at therein. The decision of the Income-tax Appellate Tribunal, Bombay Bench, was also referred to by the Appellate Assistant Commissioner in the present cases. The Bombay Bench of the Tribunal had occasion to deal with in depth and consider the constitution of the organisation, affidavits filed by the parties and also the view expressed by the Central Board of Direct Taxes in their letter dated December 19, 1978, and found that the Gurudakshina received by the respondent from its members is exempt from tax on the ground of mutuality. It was argued that in so adopting the said conclusion of the Bombay Bench of the Tribunal, the Patna Bench of the Income-tax Appellate Tribunal did not commit any error of law or jurisdiction.
6. We are clear in our mind that the Revenue as well as the assessee proceeded on a common ground before the Tribunal to the effect that the matter that arose for consideration before the Appellate Tribunal, Patna Bench, was similar in content and scope to the one that arose before the Bombay Bench of the Appellate Tribunal. It was so dealt with by the Patna Bench. The decision of the Bombay Bench of the Tribunal was followed. The said decision of the Bombay Bench is based on an array of materials--constitution of the organisation, affidavits of parties and the Central Board of Direct Taxes letter dated December 19, 1978. The conclusion so reached is based on material and was not shown to be wrong. The communication of the Central Board of Direct Taxes evidenced by letter No. F. 290/26/ 70/(Inv.), dated December 19, 1978, quoted by the Income-tax Appellate Tribunal, Bombay Bench, at paragraph 34 of its appellate order (page 89 of the paper book of T. C. No. 42 of 1982) is relevant. It is not permissible for the Revenue in the light of the above communication of the Central Board of Direct Taxes to contend that Gurudakshina received by the respondent-assessee is liable to income-tax. We hold so. It is categorically stated in the aforesaid communication of the Central Board of Direct taxes that Gurudakshina received from the members of the organisation will be exempt on the ground of mutuality. The said letter affords administrative relief to the assessee. The existence of such a communication of the Central Board of Direct Taxes, its contents, and reliance placed thereon were never disputed before the Appellate Tribunal or before us. The said communication of the Central Board of Direct Taxes is quoted at pages 89-90 of the paper book in T. C. No. 42 of 1982. In the light of the definite stand taken by the Central Board of Direct Taxes in its communication dated December 19, 1978, Gurudakshina received by the respondent-assessee from its members is exempt from tax on the principle of mutuality.
7. The relief so afforded should be given effect to. The communication of the Central Board of Direct Taxes was with reference to the Gurudakshina received by the very same assessee and, in our opinion, the said communication of the Central Board of Direct Taxes clinches the issue. Both the Bombay Bench and the Patna Bench of the Appellate Tribunal have relied on this communication of the Central Board of Direct Taxes. It cannot be said that reliance so placed by the Appellate Tribunal is wrong or unreasonable. We, therefore, hold that, on the basis of the communication of the Central Board of Direct Taxes, the decision of the Appellate Tribunal is justified in law.
8. In the light of our above reasoning and conclusion, we answer question No. (i) referred to us in the affirmative, against the Revenue and in favour of the assessee. We reframe question No. (ii) by deleting the word 'devotees' occurring therein and reframe the question in the following manner. Whether, on the facts and in the circumstances of the case, the amounts received from members can be taken to be Gurudakshina and held to be exempt We answer question No. (ii) so reframed in the affirmative, in favour of the assessee and against the Revenue.
9. The questions referred to the above tax cases are answered as above. There will be no order as to costs.
10. The Registrar of this court shall send a copy of this judgment under his signature and seal of this court to the Income-tax Appellate Tribunal, Patna Bench.