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2. Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal was right in holding that the sum of Rs. 55,162 being the balance of undisbursed amount remaining with the assessee out of the mass stipends of Rs. 1,21,706 received by the assessee during the previous year for the assessment year 1975-76 ((?) 1974-75) was the income of the assessee for this assessment year, namely, 1974-75 ((?) 1975-76) ?"

3. At the relevant time, the assessee was a priest at St. Joseph's Monastery, Mannanam. During the relevant accounting periods, he received substantial foreign remittances. The assessee claimed that these remittances are mass stipends received from a number of parties abroad and that he distributes the same to various other priests for performing the mass. For both the years, a portion of the remittances was found to have been distributed for the same. The surplus that remained after such distribution was treated as the income of the assessee for both the years. It amounted to Rs. 69,519 for the year 1974-75 and Rs. 55,162 for the year 1975-76. In appeal, the Appellate Assistant Commissioner held that receipts by a clergyman in his capacity as clergyman constitute his taxable income. In second appeal, the Income-tax Appellate Tribunal concurred with the said view. It is thereafter, at the motion of the assessee, that the above question of law was referred by the Income-tax Appellate Tribunal under Section 256(1) of the Income-tax Act, for the decision of this court.

4. As stated, the assessee was a priest at St. Joseph's Monastery. He received large remittances from abroad. He admitted that the receipts are mass stipends. Before the Appellate Tribunal, the assessee pleaded that the surplus that remained at the end of the accounting year does not belong to the assessee, that he held the same under a legal obligation to carry out the instructions of the remitter for the purpose of having the mass said, that the surplus cannot be treated as his income, and that the receipts are only in the nature of charity collections. The Appellate Tribunal negatived the above pleas. It was held that the receipts were admittedly mass stipends, that the assessee received the amounts to say the masses, or to have the masses said by others, that the assessee was not required under the arrangement to pay the amount to others, that there was no question of any overriding title at the time when the amounts were received by the assessee, that there was material to show that the assessee put the surplus amount in fixed deposit, which is a significant step to indicate that the said amounts were not required to be distributed and will remain with the assessee and that in the light of the above premises, it follows that the surplus that remained with the assessee after disbursement to other priests, is his income.

5. Before us, the only plea highlighted by the assessee's counsel was that the remittances received by the assessee were voluntary and casual in nature. The foreign remittances could be received by any person for disbursement by way of mass stipends. Merely because the assessee is a priest, there is no presumption that such remittances received by the assessee or that the surplus in the remittances constitutes his income. The Income-tax Appellate Tribunal was in error in treating the surplus that remained with the assessee out of the remittances received for disbursement of mass stipends as income of the assessee for the two assessment years.

7. In Rev. Father Prior, Sacred Heart's Monastery v. ITO [1956] 30 ITR 451 at page 478, paragraph 34, a Division Bench of the Travancore-Cochin High Court explained what is mass stipend. The Court held :

"It is true that mass stipend is a donation. But it is a donation to the individual priest who says the mass. It is given for the maintenance of the priest. The priest who receives the mass stipend is under an obligation to offer mass for the intention of the donor. In no sense can mass stipend be said to be a donation made to the monastery."