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TMI Blog1994 (12) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to tax under the Wealth-tax Act in respect of the net wealth of the trusts in question, it claimed exemption under section 5(1)(i) of the Wealth-tax Act, 1957 (" the Act "). This contention was not accepted by the Wealth-tax Officer. He, therefore, assessed it in respect of the entire wealth of the two trusts. The bank appealed to the Appellate Assistant Commissioner of Wealth-tax, who held that the trusts fulfilled the requirements of section 5(1)(i) of the Act and so the wealth of the said trusts was exempt from wealth-tax. This decision of the Appellate Assistant Commissioner was affirmed by the Income-tax Appellate Tribunal (" the Tribunal "). Hence, this reference at the instance of the Revenue. Counsel for the Revenue, Mr. G. S. Jetley, stated before us that the Tribunal has held the wealth of the trust to be exempt under section 5(1) of the Act relying upon its own decision in the assessee's case under the Income-tax Act, 1961, holding the income to be exempt under section 11 thereof. It was pointed out to us that the above finding of the Tribunal has since been reversed by this court in reference (arising from the order of the Tribunal) which is CIT v. State Bank of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eable 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, official trustee, receiver, manager or trustee, as the case may be, in the like manner and to the same extent as it would be leviable upon and recoverable from the person on whose behalf or for whose benefit the assets are held, and the provisions of this Act shall apply accordingly. (2) Nothing contained in sub-section (1) shall prevent either the direct assessment of the person on whose behalf or for whose benefit the assets above referred to are held, or the recovery from such person of the tax payable in respect of such assets. (3) Where the guardian or trustee of any person being a minor, lunatic or idiot [all of which persons are hereinafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me up for consideration before this court in Abhay L. Khatau v. CWT [1965] 57 ITR 202 and Trustees of Gordhandas Govindram Family Charity Trust v. CIT [1968] 70 ITR 600, and the Calcutta High Court in Suhashini Karuri v. WTO [1962] 46 ITR 953, where it was held that "joint trustees" could be regarded as a unit for the purposes of taxation under the Wealth-tax Act and assessed to wealth-tax in the status of an individual in respect of the value of the properties held by them as trustees. The word "individual" was held to be wide enough to include a group of persons forming a unit. This view was followed by the Andhra Pradesh High Court in CWT v. Trustees of H. E. H. Nizam's Family (Remainder Wealth) Trust [1977] 108 ITR 558 (at page 568). On appeal, the above decision of the Andhra Pradesh High Court was also approved by the Supreme Court. ( The decision of the Supreme Court is reported in the same volume of ITR 108 at pages 580 to 601 ). Section 21 is a special provision for assessment of trustees of a trust. Section 3, which is apparently the charging section, has been specifically made "subject to the other provisions" of the Act, which obviously includes section 21. Section 3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have to be as many assessments on the trustee as there are beneficiaries with determinate and known shares, though, for the sake of convenience, there may be only one assessment order specifying separately the tax due in respect of the wealth of each beneficiary. Secondly, the assessment of the trustee would have to be made in the same status as that of the beneficiary whose interest is sought to be taxed in the hands of the trustee. And, lastly, the amount of tax payable by the trustee would be the same as that payable by each beneficiary in respect of his beneficial interest, if he were assessed directly. It was also observed that even if the beneficiaries themselves were indeterminate or unknown, sub-section (4) of section 21 would apply and the assessee would be liable to be assessed in respect of the totality of the beneficial interest in the remainder as if it belonged to one single beneficiary. However, the question in regard to the applicability of sub-section (1) or sub-section (4) of section 21 will have to be determined with reference to the relevant valuation date. If, on the relevant valuation date, it is not possible to say with certainty and definiteness as to who wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not entitled to exemption in respect of its income under section 11 of the Income-tax Act is of no relevance in deciding the claim for exemption from wealth-tax under section 5(1)(i) of the Act because the expression appearing in section 5(1)(i) cannot be interpreted with reference to the scope and ambit of a somewhat similar expression used for the purposes of income-tax under the Income-tax Act. It is not a sound principle of construction to do so. To put it in the words of Lord Loreburn, " it would be a new terror in the construction of Acts of Parliament if we were required to limit a word to an unnatural sense because in some Act which is not incorporated or referred to such an interpretation is given to it for the purposes of that Act alone ". Observations in Macbeth and Co. v. Chislett [1910] AC 220 (HL) quoted with approval by the Supreme Court in CST v. Jaswant Singh Charan Singh [1967] 19 STC 469. Now, turning to the facts of the case before us, we find that, on a consideration of the totality of the facts and circumstances of the case, the Tribunal has recorded a categorical finding that the requirements of section 5(1)(i) of the Wealth-tax Act had been met by the tru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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