Priyank Kharge’s recent remarks have created the impression that the RSS operates in some kind of legal grey area with respect to its finances and taxation. However, the historical record tells a different story.
The question of whether contributions received by the RSS are taxable is not a new issue. It was examined decades ago by the Income Tax Department itself. For assessment years spanning 1967-68 to 1975-76, the Department sought to tax Gurudakshina received by the RSS from its members. The matter travelled through the appellate process and ultimately reached the High Court.
In Commissioner of Income-Tax, Bihar-I, Patna v. Rastriya Swayam Sevak Sangh, decided on 22 February 1994, the Patna High Court considered whether GuruDakshina received by the RSS from its members could be subjected to income tax. The case is reported as [1994] 207 ITR 479 (Patna) and 1994 (42) BLJR 969. The judgment was delivered by Justice K. S. Paripoornan. The dispute arose after the Income Tax Department sought to assess Gurudakshina received by the RSS during the assessment years 1967-68 to 1975-76. The Department treated the RSS as an association of persons and attempted to levy income tax on contributions received from swayamsevaks.
The matter travelled through multiple appellate forums. Both the Bombay and Patna Benches of the Income-tax Appellate Tribunal examined the issue and relied upon a communication issued by the Central Board of Direct Taxes (CBDT) dated 19 December 1978. The CBDT had expressly stated that Gurudakshina received from RSS members was exempt from income tax on the principle of mutuality.
Upholding the Tribunal’s decision, the Patna High Court ruled in favour of the RSS. The Court held that, in light of the CBDT’s own clarification, the Revenue could not contend that Gurudakshina received from RSS members was taxable. It answered the principal question in the affirmative, holding that the principle of mutuality existed in the RSS and that amounts received from members as Gurudakshina were exempt from income tax.
Significantly, the Court observed that the CBDT’s communication “clinches the issue” and that the relief afforded by the Board should be given full effect. The judgment therefore affirmed that voluntary contributions made by swayamsevaks to their own organisation could not be treated as taxable income in the hands of the RSS.
This case is important because it demonstrates that the RSS did not operate outside the purview of tax authorities. Its finances, receipts, and method of fundraising were scrutinised through formal legal proceedings spanning several years. The Income Tax Department challenged the organisation’s position, the matter was adjudicated through the appellate hierarchy, and the courts ultimately upheld the RSS’s claim.
Those who raise fresh allegations regarding RSS finances would do well to acknowledge this legal history. Long before the current political controversy, the organization’s principal source of voluntary contributions had already been examined by tax authorities and judicial forums, which ultimately ruled in its favour.
Source: IndianKanoon
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