ABHAY L KHATAU Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THE short question which arises for consideration on the present reference is whether a group of trustees can be assessed to wealth -tax under the WT Act in respect of the wealth held by them as trustees. This question has been referred to us by the Tribunal under S. 27(1) of the WT Act, 1957, in the form of two questions, which are as follows :

(2.) THE charging section, which is S. 3, of the WT Act provides that "subject to the other provisions contained in this Act, there shall be charged for every assessment year commencing on and from 1st April, 1957, a tax (hereinafter referred to as the ' wealth - tax ') in respect of the net wealth on the corresponding valuation date of every individual, HUF and company at the rate or rates specified in the Schedule". It is argued on behalf of the assessee that it is only an individual, HUF or a company that can be taxed to wealth -tax, and neither a group of individuals or an association of persons.

(3.) THE view taken in that case was that having regard to the nature of joint trusteeship, all the co -trustees together formed, as it were, a collective trustee, and the body of trustees, therefore, could be regarded as a unit for the purposes of taxation and fell within the term "individual". In taking this view, the learned judges who decided the case found support in the observations of the Supreme Court in the case of CIT vs. Sodra Devi (1957) 32 ITR 615. In that case, their Lordships of the Supreme Court were concerned with the interpretation of the word "individual"in S. 16 of the Indian IT Act. It was observed that the word "individual" was wide enough to include a group of persons forming a unit.