1. This is a departmental appeal arising out of the order of the Commissioner (Appeals), for the assessment year 1976-77, in the case of Shri M. Govindachari of Tiruchanur.
2. The assessee is an individual and has share income from the firm of M.G. Chari & Sons, which has been registered by the ITO for the assessment year 1971-72 and registration was continued for the assessment year 1976-77 as well. The firm's income has also been assessed. The firm's source of income is from the archakathvam for Shri Padmavathi Ammavari Temple of Tiruchanur. The assessee, Shri M.Govindachari, had hereditary right once in four years to the archakathvam of the temple. This income was formally being assessed in the hands of Shri M. Govindachari as the karta of the HUF. The assessee had claimed partial partition in the said family, whereby the rights in the archakathvam were claimed to have been partitioned. This partition which was said to have taken place with effect from 11-3-1970, was also recognised by an order under Section 171 of the Income-tax Act, 1961 ('the Act'), dated 19-1-1972. The archakathvam which was received on this occasion, became taxable for the assessment years 1975-76 and 1976-77. The firm allegedly formed by a partnership deed dated 30-3-1971 with other members of the family, consequent to which partial partition, as stated earlier, was also registered for the assessment year 1971-72 and such registration continued for all later years. Three minor children of the assessee were admitted to the benefits of partnership and, in view of the provision providing for automatic aggregation of such minor's income, the assessee became liable in respect of their share incomes. It was in this context that the ITO initiated action under Section 147(a) of the Act, inasmuch as no return had been filed by the assessee in that capacity. The assessee filed returns and revised returns in response to the same. The inclusion of the, minors' income in the assessee's hands falling to their share in the firm and the jurisdiction of the ITO were disputed. It was claimed on the ground that there was no obligation to file the return in absence of taxable income in individual hands before inclusion of the minors' income and on the further ground that the income from the archakathvam having been assessed in the hands of the firm cannot be included again in the assessee's hands. The assessee had offered his own share in his family (smaller) assessment and this was accepted by the ITO only as a protective measure. The ITO did not consider himself bound either by the order of partial partition or by his order in registering the firm. He was of the' view that the archakathvam being the right to perform pooja and receive remuneration, was a personal right incapable of being alienated or being treated as that of the family. He was of the view that a decision of the High Court in the case of Shri Mahant Prayag Doss Jee Varu v. Archakam Bokkasam Govindacharyulu [1935] 68 MLJ 295 (Mad.) supported his view. He, therefore, taxed the entire income from the archakathvam in the assessee's hands in his individual capacity. The first appellate authority confirmed the assessment on the question of jurisdiction and on the question of aggregation of the minors' income under Section 64(1)(iii) of the Act, in view of the Andhra Pradesh High Court decision in Sivalal Sogaji, In re. [1983] 140 ITR 39. However, in other respects, he accepted the assessee's case. He was of the view that the archakathvam was an office and that it was property. He cited a number of Supreme Court and the High Court decisions. The right to office is again a property right. Since it was inherited property and was assessed as family property he was of the view that it was subject to partition and that, subsequently, the firm was a valid one. He, therefore, found no justification for inclusion of the share income of Shri Govindachari in his individual assessment, when it was rightly assessable in the hands of the family as in the preceding years. He found that the firm's assessment was a valid one. He directed that the protective assessment made on the family of Shri Govindachari should be treated as a regular assessment under the circumstances. He found that there was no case for inclusion of the entire income from the archakathvam solely in the hands of the assessee. He agreed only to the inclusion of the minors' income under Section 64(1)(iii). It is against this order that the departmental appeal has been filed.
3. The learned departmental representative took us over the order of the ITO. According to him, the right was a personal one. He exercises his right in consequence of a khararnama executed by the assessee with the devasthanam authorities. His remuneration is for services rendered as archaka in doing pooja. Even if it was to be treated as an office, it could under the circumstances be considered as personal to the assessee. The fact that such income from the archakathvam was assessed in the past in the hands of the family or that partial partition thereof was recognised or the further fact that there was recognition of the firm formed consequent to the partition, would not, in his opinion, stand in the way of a correct assessment in correct hands inasmuch as it is well established that the principle of res judicata and estoppel do not apply to income-tax cases. He pointed out that this was the view of the first appellate authority himself as per his conclusion on the question of the jurisdiction. As for the merits, he claimed that the assessment was justified as the income from archakathvam was earned by the assessee in his individual hands and was rightly taxed in his hands. According to him, it was also not alienable as was wrongly assumed by the first appellate authority.
4. The learned Counsel for the assessee contended that the assessment suffers even for lack of jurisdiction, though on this point the first appellate authority has decided against him. He claimed that he had not come in appeal or in cross-objection, because he was otherwise satisfied with the relief in respect of quantum granted by the first appellate authority. Since objection against jurisdiction was taken up by him specifically and decided against him, he canvassed the claim that it was open to him to question the jurisdiction even while defending the decision of the first appellate authority. He claimed that once a partition was accepted, it is no longer open to the ITO to go behind the same. He cited the decision of the Supreme Court in Joint Family of Udayan Chinubhai v. CIT [1967] 63 1TR 416 and the Orissa High Court decision in Damodar Hansraj v. ITO [1971] 82 ITR 83. He also claimed that there has been a firm constituted in consequence of partition and that such firm had also been assessed in respect of the self-same income. He was of the view that the partner's assessment should follow the firm and it was not possible for the ITO to ignore the decision taken in the firm's assessment. As for the merits, he contended that the facts are very clear. He took us over the lengthy order of the first appellate authority for the inference that right to archakathvam was property. It was also hereditary property. He depended upon the various cases cited by the ITO himself for his view that it was property. It was heritable property. It was found to be alienable to the other family members. Since it was hereditary property, it was a family property. If it were family property, it was capable of division. Such division has also been recognised. It was also found that it was alienable to family members. It has been so specifically decided in some of the decisions cited by him and referred to by the first appellate authority. Here also, there has been no right conferred on a stranger whether consequent on partition or partnership. He, therefore, contended that there is no merit in the departmental appeal, which should be rejected both on the question of jurisdiction as well as merits.
5. We have carefully considered the records as well as arguments. We would prefer to deal with the question of merits first inasmuch as the departmental appeal is only on merits. The assessee is one of the hereditary archakas of Shri Padmavathi Ammavari Temple at Tiruchanur.
These hereditary archakas customarily take turn for the period of archakathvam. The assessee's turn comes once in four years. The assessee was assessed in the past on this income as a HUF. The assessee purported to divide his future right in the archakathvam between the family members and, consequently, formed a partnership as well. The partial partition, whereby the right to archakathvam was recognised by the ITO under Section 171 stands till today. The order of registration for the assessment year 1971-72, dated 30-3-1971 has been continued for incomes for all the years including the year under consideration.
According to the ITO, this right to perform pooja and the customary right to share income from the collections are rights shortly described as the archakathvam, which is personal to the archakas because of the khararnama or the agreement with the devasthanam authorities. However, what is described as 'Mirasi rights' in the archakathvam is not a matter of contract between the archaka and the devasthanam (temple management) under charitable and Hindu Religious Institutions and Endowments Act, 1966 (later replaced by Tirumala Tirupathi Devasthanam Act, 1979) notwithstanding the khararnama or the agreement between the executive officer and the archakas from time to time. The right to be an archaka is a hereditary right. The Devasthanams do not have the right to take any other archakas due to long custom and tradition recognised by the Courts. At the same time, they do not get the remuneration until they perform the duty of the archakathvam. It is for this purpose, the devasthanam authorities insist upon the khararnama.
In other words, the agreement is not the sole source of income but it merely recogises the pre-existing right of the assessee to be an archaka in his turn. The right to the office of archaka is distinct from his consent to carry out the obligations of the office to which he is entitled. Any attempt even to reduce the rights of these hereditary priests was not upheld by the Courts, as in the case of Sri Archakam Peddinti Srinivasamurthy Dikshitulu v. Commissioner, Charitable & Hindu Religious Institutions & Endowments in Andhra Pradesh at Hyderabad AIR 1973 AP 325 notwithstanding a specific provision in the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1966 to fix his share. The High Court observed that the rights, honours, emoluments and perquisites were prescribed by long custom and usage. In coming to this conclusion, the Andhra Pradesh High Court followed the decision of the Supreme Court in Kakinada Annadana Samajam v.Commissioner of Hindu Religious & Charitable Endowment, AIR 891. The purport of this decision of the Andhra Pradesh High Court is that the office of the archakathvam itself is property. The Madras High Court in the case of Shri Mahant Prayag Doss Jee Varu (supra) had held in respect of the very temple (Shri Padmavathi Ammavari Temple) that archaka Mirasi in the Padmavathi Temple was hereditary. Certain disputes had arisen in settlement of hereditary rights of one of the archakas, Shri Krishnamacharyulu, who had executed a will, authorising his wife to adopt a male to bequeath a moiety of his half share to the son to be adopted and bequeathed the other half share to his son Shri Narasimhacharyulu. This settlement was disputed. The Madras High Court observed as under: An alienation of a religious office such as that of an archakaship of a temple is not invalid when it is made in favour of one in the line of heirs of the a liener and when it is neither for consideration nor in any way opposed to or inconsistent with the interests of the institution. The right of delegation has been expressly recognised in the case of archakas by permitting the system of proxies. Consequently, a device by will of the archakaship to the testator's sister's son who is not in any way personally unfit or disqualified from performing the duties of the office is valid.
It is, therefore, clear that the office of the archakaship is not only property but it is capable of being alienated as long as such alienation is in respect of eligible persons in the line of his heirs.
The State enactments for better administration of the temples, it was found, cannot interfere with these hereditary rights inasmuch as such rights being rights in property are protected by the Constitution. No doubt, the right to the hundi collections is not automatic in the sense that it is given to him without any obligation. The archaka has to equip himself with the working knowledge of Sanskrit, Mantras, Agamas and other relevant Sastras, rituals, mode of worship according to sampradaya, sthalapurana and other traditions of the temple. Thus, there is a personal element involved but that is not dominant. A number of decisions had been cited by the Commissioner, but it is not necessary to deal with all of them. We find that there cannot be any reasonable doubt or dispute about the proposition that the right to be an archaka in Shri Padmavathi Ammavaru Temple of Tiruchanur is hereditary sanctioned by custom and that it is an office which can be alienated in favour of one's heirs. The fact that a khararnama is to be executed, would only mean that a particular archaka accepts the obligations of the office to which he is entitled by law in view of established customs. His hereditary right to office is too well established in relation to decisions mentioned hereinbefore even with reference to the archakaship of the very temple with which we are concerned. If it were property, which had come to the assessee hereditarily, it stands to reason that it is family property. The fact that it was so assessed would have converted even an individual property into a family property inasmuch as it is possible to blend an individual's property into a family property. In any view of the matter, it could not be said that it was individual property prior to partition. If it were family property, as concluded by us, there could be a valid partition covering this asset. Such partition has also been recognised by a formal order. If it would be an asset which could be partitioned, it also stands to reason that the erstwhile coparceners could form a partnership. This is precisely what was claimed to have been done. Such a partnership has also been registered and such registration continued even for the assessment year under consideration. It appears that the assessee's share is liable to be included only in family (smaller) assessment, inasmuch as the assessee offered the same in the family assessment and such assessment was also made in that capacity though as a protective measure. The assessee is liable only in respect of the minor's share income, because of the provision relating to automatic aggregation under Section 64(1)(iii), introduced with effect from 1-4-1976. Such aggregation is not now in dispute, though objection was raised at the stage of first appeal. The order of the Commissioner, upholding liability only to this extent, is therefore, right and deserves to be upheld. There is no case for adopting the entire income from the archakaship, which now forms the asset of the firm as being available to the assessee in his individual capacity.
6. Inasmuch as there was no assessment in the assessee's case prior to the issue of notice and the assessee was liable to tax in respect of the aggregate income of the minor children, the proceedings under Section 148 of the Act have to be upheld as not lacking in jurisdiction. The assessee's other objection is that there cannot be any assessment in the assessee's hands in respect of an income from an asset, which is the subject-matter of recognised partition and registration of the firm subsequently formed. We should ordinarily imagine that this objection is quite reasonable. The authorities should have simultaneously invoked their powers to modify or cancel the order under Section 171 and the order of registration, One would have expected that at least the continuation of registration for the assessment year under consideration would have been denied. Not having done so, it prima facie follows that this assessment including the assessee's own family share and shares of other adult partners cannot stand. The argument that the principles of res judicata and estoppel do not apply to income-tax proceedings, cannot help the revenue in a case where the same assessment year is involved. Section 67 of the Act prescribes the mode of assessment of the partners pursuant to the firm's assessment. Once a firm's assessment is made, the method prescribed by Section 67 in computing the partner's share income should be followed. This, we should imagine, is a statutory requirement. We should also imagine that similarly having chosen to accept an amount as having been partitioned between the members of the family, it may not be open to the revenue to take a different view in respect of the erstwhile coparceners' assessments as long as such order of partition stands. We do not consider it necessary to go into the case law on the subject, as this legal position, we are of the view, is self-evident.
Even if we were to hold that the principles relied upon by the authorities would justify their taking a different stand in this assessment, we would still be unable to disturb the order of the first appellate authority because we are of the view that both the orders of partition and registration are correct even as specifically found by the first appellate authority. In any view of the matter, the departmental appeal has to fail and it is, accordingly, dismissed.