Law:

Section:

Section 4, read with sections 28 and 56 of the Income-tax Act, 1961 [Corresponding to section 3, read with sections 10 and 12 of the Indian Income-tax Act, 1922] - Income - Chargeable as - Assessee was a religious Guru and also head of his sect - He received presents from his disciples by virtue of office held by him - ITO treated those offerings as income from gifts - Tribunal also held that those amounts constituted income and were liable to tax under section 10 or 12 of 1992 Act - Whether even a practice of religion can become a vocation and more so when it brings in a steady income - Held, yes - Whether, therefore, if assessee practiced a vocation then case fell under section 10, but ever otherwise income would fall in any case under section 12 of 1922 Act - Held, yes FACTS The assessee was a religious 'Guru'. At his residence he kept an idol of Lord Krishna. Offerings were made to him from time to time by his devotees and these offerings were not made to the idol but to the assessee himself. It had also been found as a fact that the assessee by virtue of the office he held had to perform some obligations as the head of this faith and that he was looked upon by his devotees as 'Guru' and he gave 'mantras' to his disciples. For the said receipts, the ITO treated those offerings as income from gifts. However, it was contended that these were not subject to tax. The Tribunal held that these amounts constituted an income and were liable to tax under section 10 or 12 of the 1922 Act. HELD Every receipt that a man receives is either a revenue receipt or a capital receipt, and in instant case, there could be little doubt that the receipts which had been subjected to tax were revenue and not capital receipts. The source of these receipts was the abiding faith that the disciples had in their Guru and the receipts came in with a fair regularity. It was clear that the presents were made to the assessee by virtue of the office held by him. Now, an office may not depend upon any law, of any contract, or any mandate from the State or any other authority. An office means a position which requires the person holding it to perform certain duties and discharge certain…

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