9911796707
TMI Blog1986 (1) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... 5, applied by reason of the notification dated September 8, 1977, made by the Kerala State Government ? (2) Whether, on the facts and in the circumstances of the case, the assessee-trust would be entitled to exemption from wealth-tax in respect of the properties held by it under section 5(1)(xviib) of the Wealth-tax Act, 1957 ? (3) If questions Nos. 2 and 3 are answered in the negative, whether, on the facts and in the circumstances, assessments are to be made under section 21(1) of the Wealth-tax Act and not under section 21(4) thereof? (4) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the amounts standing to the credit of each of the subscribers in the provident fund held b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 59 to 264 of 1980 on a reference made by the same Tribunal in the matter of assessment of the trust to income-tax. The trust had taken over the General Provident Fund of the employees of the KSRTC with effect from January 5, 1967. The employees contribute part of their salary to the provident fund administered by the trust. There is no contribution by the employer. The contributions to the provident fund by the employees are to be returned to them with interest at the time of their retirement. We have, in our judgment, in the aforesaid reference cases, held that the individuals who contribute to the provident fund account are persons determinate and known and, for that reason, we have held that the income accrued by way of interest on depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e recognised under section 2(38) of the Income-tax Act. There is also no dispute that the Provident Funds Act, 1925, did not apply during the relevant period, but for the notification by the Government of Kerala under section 8(3) of the Provident Funds Act published in the Gazette dated October 4, 1977. Sub-sections (1), (2) and (3) of section 8 of the Provident Funds Act, 1925, are extracted below : " (1) The appropriate Government may, by notification in the Official Gazette, direct that the provisions of this Act shall apply to any Provident Fund established for the benefit of its employees by any local authority within the meaning of the Local Authorities Act, 1914, and, on the making of such declaration, this Act shall apply accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conferred by sub-section (2) of section 8 of the Provident Funds Act, 1925 (Central Act 19 of 1925), the Government of Kerala hereby direct that the provisions of the said Act shall apply to the Provident Fund established for the benefit of the employees of the Kerala State Road Transport Corporation which has been added to the Schedule to the said Act. " The notification came into force on its publication in the Gazette on October 4, 1977. The assessment in these cases relates to periods prior to the notification. The argument on behalf of the assessee is based on subsection (3) of section 8 of the Provident Funds Act that the addition of the KSRTC in the Schedule to the Act takes effect from the very commencement of the Provident Fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act with reference to the area to which it was extended was held to be with effect only from the date on which the notification came into force. The Supreme Court stated at page 761 : " Obviously, an Act can only commence in a particular area on the date on which that Act comes into force in that area. The mere fact that it was in operation in other areas will not result in the Act having commenced in the area where it had not yet been applied. " We have, therefore, no doubt, in our minds that the notification adding the KSRTC in the Schedule to the Provident Funds Act can have effect only from the date of the notification and it can have no retrospective effect merely for the reason of the expression in section 8(3) " as if it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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