COMMISSIONER OF WEALTH TAX Vs. BHANGUR CHARITABLE TRUST

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (hereinafter referred to as "the Tribunal"), has referred the following question for the opinion of this court, which is said to arise out of its order dated October 31, 1978, in WTA Nos. 252, 253 and 254/JP/ 1977-78:

(2.) THE assessee, M/s. Bangur Charitable Trust, Didwana, claimed exemption of Rs. 1,50,000 under Section 5(1)(xxiii) of the Wealth-tax Act, 1957 (No. XXVII of 1957) (for short "the Act"), on the shares of various companies held by it. THE assessment years under consideration are 1973-74, 1974-75 and 1975-76. THE Wealth-tax Officer, Central Circle, Jodhpur, held that the exemption is not allowable because it is admissible only to individuals and Hindu undivided families and not to a trust. Aggrieved, the assessee filed appeals under Section 16(3) of the Act. THE Appellate Assistant Commissioner, Jodhpur, opined that the assessee was right in claiming exemption of Rs. 1,50,000 on shares of Indian companies and, therefore, he directed the Wealth-tax Officer to allow the exemption as claimed by the assessee. Further appeals were filed before the Tribunal in respect of each of the assessment years. THE Tribunal, in its consolidated order passed in respect of the years 1973-74, 1974-75 and 1975-76, held that the assessee-trust shall be deemed to be an individual and as such it is entitled to exemption under Section 5(1)(xxiii) read with Section 2 of the Act. THE Tribunal, therefore, maintained the order of the Appellate Assistant Commissioner.

(3.) IT may be stated that Clause (xxa) was inserted by the Finance Act, 1975, with effect from April I, 1975. The words "held by the assessee" were omitted by the Finance Act, 1975, with effect from April 1, 1975. This was done with a view to secure that the exemption from wealth-tax in respect of shares in an Indian company is available even in cases where the shares, though owned by the assessee, are not registered in his name. Section 21A deals with assessment in cases of diversion of property, or of income from property held under trust for public charitable or religious purposes. The relevant part is as follows :