JAMNADAS Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) IN this petition under article 226 of the Constitution, the petitioners who are the joint executors appointed by the last will and testament dated April 8, 1959, of one Sohadradevi N. Daga, have challenged the validity of the Wealth -tax assessment order dated March 25, 1963, the notice of demand also dated March 25, 1963, and the revisional order passed by the Commissioner of Wealth -tax dated September 13, 1963.

(2.) THE main contention of the petitioners is that there is no provision in the Wealth -tax Act, 1957 (27 of 1957), entitling the revenue to charge, assess and recover wealth -tax in respect of the wealth left by a deceased person from after the financial year next to the financial year in which such person dies. The relevant facts are as follows : Smt. Sohadradevi N. Daga died on October 5, 1959, prior thereto executing her last will dated April 8, 1959. The petitioners are the joint executors appointed under that will. The deceased left a large estate amounting to about Rs. 9 lakhs and odd. For the financial year expiring on 31st October, 1959, i.e., the assessment year 1960 -61, the petitioners as executors were assessee pay wealth -tax in respect of the estate left by the deceased and there is no dispute between the parties as regards that assessment. For the next financial year expiring on 31st October, 1960, i.e., the assessment year 1961 -62, the Wealth -tax Officer served on the executors a notice dated August 8, 1961, under the provisions of section 14(2) of the Act requiring that a should be filed within 35 days in connection with the wealth -tax payable by the estate of the deceased. The notice is addressed as follows :

(3.) IN connection with this question, the parties have relied on several provisions of the Wealth -tax Act and particularly section 3, 19 and 21. The charging section 3 in substance provides that there shall be charged for every financial year.. a tax in respect of the net wealth (on the corresponding valuation date) of every individual, Hindu undivided family and company at the rate or rates specified in the schedule. Sections 4 and 5 relate to the computation of net wealth and the method and manner in which the net wealth of the assessee has to be ascertained. Section 19 relates to tax payable by the legal representative of deceased individual. Section 21 relates to assessment when assets are held by courts of words, administrators -general, trustees, etc. Before referring to the provisions in diverse sections it is relevant to point out the definitions of the words 'assessee', 'assets' and 'net wealth' as contained in section 2. 'Assessee' has been defined in the clause (c) of section 2 mean a person by whom wealth -tax or any other sum of money is payable under the Act, and includes every person in respect of whom any proceedings under the Act have been taken for the assessment of the value of his assets. clause (e) defines 'assets' to mean property of every description, movable or immovable.. clause (m) defines 'net wealth' to mean 'the amount by which the aggregate value computed in accordance with the provisions of this Act of all the assets.. belonging to the assessee on the valuation date including assets required to be included in his net wealth as on that date under this Act..' Under section 4, in computing the net wealth of an individual, it is directed to include the wealth of such parties as the assessee's wife, minor child, etc. We are not concerned with those provisions. section 5 provides for exemptions from wealth -tax in respect of certain assets belonging to the assessee. The first part of sub -section (1) of that section runs as follows : '5. Exemption in respect of certain assets. - (1) Wealth -tax shall not be payable by an assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee - (i) any property held by him under trust or other legal obligation for any public purpose of a charitable or religious nature nature in India.....'