Guruvayur Devaswom Committee Vs ITO (Kerala High Court)
Divine offerings, Human Taxes- When Devotion meets Deduction- Even God’s Money isn’t Tax-Exempt : Kerala HC backs IT Dept in Guruvayur Case
The honourable Kerala High Court in Guruvayur Devaswom Committee vs. ITO upheld the constitutional validity of Section 2(24)(iia) of the Income-tax Act, 1961, introduced by the Finance Act, 1972, which brought “voluntary contributions” received by trusts or institutions created or established wholly or partly for charitable or religious purposes (other than corpus donations) within the ambit of “income.”
The Guruvayur temple, a famous shrine with income from extensive properties, government grants, fines, penalties, offerings & contributions, had not been filing returns prior to 1972 as such receipts were not considered taxable income. Post-amendment, the Income-tax Department, relying on the new definition in Sec 2(24)(iia) & the amended Sec 12, called upon the Devaswom to file returns. The petitioner challenged the provision as infringing its rights under Article 26(c) & (d) of the Constitution to own, acquire & administer property, contending that taxation of voluntary contributions was an impermissible pecuniary burden on a religious denomination.
Guruvayoor Devaswom argued that the right guaranteed to the Hindu denomination to which the Devaswom belongs-to own & acquire property & to administer it is sought to be infringed by defining income in the Income-tax Act in such a manner as to rope in the receipts of the Devaswom which, but for such definition would not be income & which therefore will not be liable to be taxed. In view of such infringement the impugned provision cannot be sustained in law, for, any law must not only be one which can be justified by reference to the source of the power to enact it but must also not infringe any fundamental right guaranteed in Part III of the Constitution.
