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TMI Blog1971 (7) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... section 21 of the Wealth-tax Act ? " The Tribunal upheld the contention of the revenue that the trustee is liable to be proceeded against under section 21 of the Act, but the High Court disagreeing with the view taken by the Tribunal answered the question referred to it in the negative. Hence, this appeal. The facts of the case as set out in the statement of the case submitted to the High Court may now be briefly stated : The respondent, Kirpashanker D. Worah, by means of a deed of trust dated July 19, 1949, transferred certain shares described in schedule 7 of the trust deed and certain immovable properties and shares in business described in schedule 8 of that deed unto himself as the trustee for making provision for the maintenance of himself, his wife, for the maintenance, education and the marriage expenses of his unmarried daughters and for the maintenance and education expenses of his minor sons. The main purpose of the trust is set out in paragraph 3 of the objects of the trust. That paragraph reads : " To apply the income of the trust estate for the maintenance and the joint use and benefit of the settlor and his wife the said Srimati Kanchan Kunver and also for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of the trust properties as a trustee. The question for consideration is whether he is liable to be assessed to wealth-tax in respect of the trust properties. The respondent contends that as he is not holding the trust properties on behalf of the beneficiaries, he does not come within the scope of section 21 of the Act and further as the share of the beneficiaries under the trust is not indeterminate, he cannot be taxed at the maximum rate. We shall first take up the question whether the case of the assessee comes within the scope of section 21 (1) of the Act. At the material time section 21 read thus : " 21. (1) In the case of assets chargeable to tax under this Act which are held by a court of wards or an administrator-general or an official trustee or any receiver or manager or any other person, by whatever name called, appointed under any order of a court to manage property on behalf of another, or any trustee appointed under a trust declared by a duly executed instrument in writing, whether testamentary or otherwise including a trustee under a valid deed of wakf, the wealth-tax shall be levied upon and recoverable from the court of wards, administrator-general, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n manager, receiver, administrator or the like, and he shall be deemed to be the assessee in respect of the agricultural income-tax so payable by each such person and shall be liable to pay the same. " It may be noted that in that provision, there is no reference to trustees. That section speaks of " receiver, administrator or the like on behalf of persons jointly interested in such land or in the agricultural income derived therefrom ". While interpreting that clause this court held that a trustee is not a person who can be equated to a receiver or an administrator inasmuch as those persons hold the property on behalf of other persons whereas trustee is the legal owner of the trust property. In that decision this court also observed that there is a fundamental difference between a property being held on behalf of others and property being held for the benefit of others. In our opinion the ratio of the decision does not bear on the point under consideration though certain observations found therein may give some assistance to the respondent. Section 11 of the U.P. Agricultural Income-tax Act does not refer to trustees at all whereas section 21(1) of the Act specifically refers t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendered under section 41(1) of the Indian Income-tax Act, 1922, have a bearing on the question arising for decision in this case. In Commissioner of Income-tax v. Puthiya Ponmanichintakam Wakf, this court proceeded on the basis that the income received by a trustee came within the scope of section 41(1) of the Income-tax Act, 1922. In Commissioner of Income-tax v. Kokila Devi, a similar view was taken by this court. In Commissioner of Income-tax v. Manilal Dhanji, this court again proceeded on the basis that section 41 applied to the trustees. In Commissioner of Income-tax v. Managing Trustees, Nagore Durgha, this court was called upon to interpret the scope of section 41(1). Therein the question was whether nattamaigars of the Nagore Durgha, who are considered as trustees in whom the properties of the Durgha vested, would come within the scope of section 41(1) of the Indian Income-tax Act, 1922. This court answered that question in the affirmative. Therein also it was contended that as the property is vested in the managing trustee and he received the income in his own right and not on behalf of the beneficiaries, though for their benefit, the income in the hands of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extreme cases. Though as a normal rule the courts should give to the words used in the statute its normal meaning, occasions do arise when it becomes necessary to give a special meaning to a word. For the reasons mentioned above, I interpret the words 'on behalf of' found in section 41(1) and the first proviso thereto as equivalent to 'for the benefit of'. " In Suhashini Karuri v. Wealth-tax Officer, Calcutta, the High Court of Calcutta held that the words " on behalf of " used in section 21(1) of the Act are synonymous with the expression " for the benefit of ". It further held that notwithstanding that the trustees hold property for the benefit of beneficiaries and not on their behalf, section 21(1) applies to them and they are liable to wealth-tax only " in the like manner and to the extent as it would be leviable upon and recoverable from any such beneficiary ". The Calcutta High Court distinguished the decision of this court in Holdsworth's case. The Bombay High Court in Trustees of Gordhandas Govindram Family Charity Trust v. Commissioner of Income-tax, disagreeing with the decision under appeal and following the decision of the Calcutta High Court in Suhashini Karuri' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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