KRIPASHANKAR D WORAH Vs. COMMISSIONER OF WEALTH TAX

JUDGEMENT

(1.) THESE four references under Section 27(1) of the Wealth Tax Act relate to assessment years 1957-58, 1958-59, 1959-60 and 1960-61. The valuation dates in respect of those assessments were, respectively, the 2nd of November, 1956, 23rd October. 1957, 11th of November, 1958 and 31st October, 1959.

(2.) THE assessments for those years were made on the 27th of February 1961, by the Wealth-tax Officer, Ward A, Colliery Circle, Dhanbad, under Section 21(4) of the Wealth-tax Act, on the trustee on behalf of the two younger sons of the settlor who were taken to have vested interest in the trust property. THE assesses was the trustee of the K.D. Worah Trust, State Jharia, in accordance with a trust deed dated the 19th of July, 1949, executed by the settlor Kripashankar Dayashankar Worah, who appointed himself as trustee of the trust estate. THE assessee objected to the assessment and went in appeal to the Appellate Assistant Commissioner of Wealth-tax. Bhagalpur Range, who annulled the assessments. THEre was an appeal before the Income-tax Appellate Tribunal. Patna Branch, by the Wealth-tax Officer, where the assessments as originally made were restored. THE assessee made an application for reference to the Appellate Tribunal under Section 27(1) of the Act and the question framed for consideration of this Court is:

(3.) THE question may be examined from another stand-point. THE charging section in the Act is 3 which makes the net wealth of every individual. Hindu undivided family and company liable to wealth tax. As the trust property does not belong to the beneficiary, he does not become chargeable to tax. Representative liability of the holder of the assets under Section 21 is co-extensive with that of the owner. When the beneficiary cannot be saddled under Section 3, there cannot be representative assessment on another for him. THE co-extensive measure of liability will not be available. Provisions under Sub-section (2) equally will not apply to the beneficiaries. Similarly, the consideration under Sub-section (4) will not arise as they have no share, known or unknown, in the trust property. THE entire basis of Section 21 is the original liability of the beneficiary; when that cannot be fixed upon him within the meaning of Section 3, aid of the provisions under Section 21 cannot be invoked against another who holds the assets for the time being for his benefit.