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TMI Blog1984 (3) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1957 (' the Act ') and further that the object of the Act itself is not to tax corporate bodies set up for public purposes because the statute has been enacted to give effect to a directive principle of the Constitution aimed at redistribution of wealth and would be counter productive if it were to be applied to bodies set up for public purposes requiring the holding of properties for carrying out such public purposes. 2. The learned representative of the assessee points out that section 13 of the Indian Trade Unions Act is entitled ' Incorporation of Registered Trade Unions '. The section states that every registered trade union shall be a body corporate. According to the learned representative, a body corporate is not an assessable entity under the Act. In his submission, the expression ' body corporate ' is wider in context than the expression ' company ' and a body corporate is distinct and apart from members constituting it and such entity by itself has no connection with the members. In his submission, all body corporates are not individuals and the Act is not applicable. The learned representative of the assessee also referred to the discussion on the meaning of the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irect decision under the Act on the question of interpretation of the expression ' individual ' or to show that the concept of the expression ' individual ' under the 1961 Act in the cases considered are also applicable for the purpose of assessment to wealth-tax. The second reason was on a constitutional issue. So far as the first reason is concerned, it is submitted that the principles enunciated by the Supreme Court on the question of determination of the status as individual in the income-tax cases right from the case of CIT v. Sodra Devi [1957] 32 ITR 615 have been repeatedly emphasised and held applicable to assessments both under the 1961 Act and the 1957 Act. Reference in this connection is made to the decisions in Khan Bahadur Chowakkaran Keloth Mammad Keyi v. WTO [1962] 44 ITR 277 (Ker.), particularly the observations at pages 287-288 ; Andhra Pradesh State Road Transport Corpn. v. ITO [1963] 47 ITR 101 (AP), the observations at pages 106 to 109 ; Sarjerao Appasaheb Shitole v. WTO [1964] 52 ITR 372 (Mys.), the observations at pages 378 and 379 ; Rajah Sir M.A. Muthiah Chettiar v. WTO [1964] 53 ITR 504 (Mad.), the observations at pages 523-524, last para ; Banarsi Dass v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term ' individual ' as comprehending not only human being but, also to include any group of persons forming a unit, and the word ' individual ' has been held to include a corporation created by a statute, e.g., a university or a bar council, or the trustees of a baronetcy trust incorporated by a Baronetcy Act, a minor or a person of unsound mind. After stating the wide connotation of the word as stated above, it has been held that when section 16(3) talks of an ' individual ' it is only in a restricted sense that the word has been used because the section only talks of ' individual ' capable of having a wife or a minor child or both. The case of the Kerala High Court in Khan Bahadur Chowakkaran Keloth Mammad Keyi's case is a case under the Act in which it was held that a HUF is a group or body coming within the connotation of the term ' individual ' in entry 86 of the Union List. In this decision, the observations at pages 287 and 288 support the view that the expression ' individual ' is wide enough to include a group or collection of body of individuals including a registered trade union. In the Andhra Pradesh High Court decision in Andhra Pradesh State Road Transport Corpn.'s ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w or restricted interpretation, while construing the provisions of the Act, especially when there is nothing in the context of the charging section to indicate that the term should not receive its ordinary meaning and that the expression ' HUF ' which follows the word ' individual ' is not to be read as importing a restriction upon the term ' individual '. It is further observed that the charging section has attempted a classification of the entity to be taxed, and for good and proper reasons, distinguished a HUF from an individual. In the case of Banarsi Dass, a decision of the Supreme Court under the Act, the Supreme Court has upheld the validity of the levy of charge in respect of the net wealth of HUFS. In the decision the Supreme Court has reiterated the view stated in Sodra Devi's case in regard to the meaning of the term ' individual ' at page 233, namely, that the word ' individual ' includes a corporation created by a statute, e.g., a university or a bar council, or the trustees of baronetcy trust incorporated by a Baronetcy Act, and also that ' individual ' would include a group of persons forming a unit. It is to be noted that in the decision in Sri Sri Sridhar Jiew v. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons forming a unit. It is observed in this case after having regard to the scheme of the Act that there is no warrant for suggesting that the two terms ' individual ' and ' HUF ' have been used in antithesis with each other, for section 3 being the charging section is merely concerned with specifying different assessable units for purposes of assessment of wealth and imposition of the levy ; it cannot be disputed that the Legislature can select persons, properties, transactions and objects for the imposition of a levy and for that purpose classify as many different assessing units as it could reasonably think necessary and this is how three assessable units, namely, ' individual ', ' HUF ' and ' company ' have come to be specified in section 3. It was further observed that the specific mention of a HUF in the section does not result in the exclusion of group of individuals who only form a unit by reason of their birth like a Mapilla tarwad from the operation of the section. Reference is also made to its earlier decision in Sodra Devi's case and the proposition stated therein has been reiterated. 8. Thus, it is seen that there is an overwhelming catena of authorities of both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conduct of the club really belonged to the general body of members and having regard to the fact that the club is not a juristic entity, having any corporate status was found to be incapable of owning the property. The real nature of the club was held to be an ' AOPs ' and it was held that the ' AOPs ' is not an assessable entity under the Act, in the status of an individual. In the assessee's case before us, it is undisputed that by virtue of section 13 of the Indian Trade Unions Act the assessee, which is a registered trade union, is a body corporate by the name under which it is registered having a perpetual succession and a common seal with power to acquire and hold both movable and immovable properties and to contract and by its name entitled to sue and be sued. Section 14 of the Act states that the Societies Registration Act, 1860, the Co-operative Societies Act, 1912, and the Companies Act, 1956, shall not apply to any registered trade union and registration of any such trade union under any such Act shall be void. Thus, the provisions show that a registered trade union is a body corporate having an independent legal existence, i.e., juristic person, and it cannot be an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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