Commissioner of Wealth-tax vs Halai Menon Association

N.V. Balasubramanian, J.—The assessee is a registered association registered under the Societies Registration Act for the promotion of

friendship, understanding and unity among"" the Halai Menon Community. The only dispute that arose before the wealth-tax authorities as well as

before the Tribunal was whether the said association can be regarded as an association of persons or body of individuals and whether it could be

subjected to wealth-tax. The Tribunal held that the assessee cannot be classified as an individual within the meaning of Section 3 of the Wealth-tax

Act. The Revenue has challenged the said order of the Tribunal, seeking a reference and the case has been stated on the following question of law

at the instance of the Revenue :

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal''s finding that the assessee is not liable to wealth-tax as an

individual is sustainable in law ?

We hold that the view of the Appellate Tribunal that the assessee is not liable to wealth-tax as an individual is correct and the decision of the

apex court in Commissioner of Wealth Tax, Gujarat-III, Ahmedabad Vs. Ellis Bridge Gymkhana, , is a clear authority for the proposition of law

that an association of persons cannot be taxed u/s 3 of the Wealth-tax Act, as there is a deliberate omission by the Legislature to exclude a firm or

an association of persons from the purview of wealth-tax. Therefore, in our opinion, the expression ""individual"" cannot be stretched to include

entities which were deliberately omitted and left out of the charging section of the Wealth-tax Act.

Following the said decision of the Supreme Court, we hold that the assessee cannot be subjected to wealth-tax and our answer to the question

referred to us is in the affirmative and against the Revenue. However, there will be no order as to costs.