INDIRA BAI Vs. GIFT TAX OFFICER

JUDGEMENT

(1.) IN W. P. No. 957 of 1958, the petitioner seeks the issue of a writ of prohobition prohibiting the Gift Tax Officer form enforcing a notice calling upon the petitioner to submit the prescribed return under the Act. IN W. P. No. 217 of 1960, the petitioner prays for the issue of a writ of certiorari or other appropriate writ for quashing an order of assessment made by the Gift Tax Officer. Since the same question of the proper construction of the provisions of the Act is raised in the two petitions, they are dealt with together. The facts relating to each case are however different and they will be set out briefly.

(2.) THE petitioner in the first of these writs had made five gifts, four of which were of either Rs. 10,000, or below and one of Rs. 20,000. By a notice dated 30th October 1958, the Gift Tax Officer called upon the petitioner to submit a return for the assessment year 1958-59. In the form of return which was enclosed to the notice, the petitioner was required to aggregate the value of the taxable gifts made during the account year relating to the assessment year 1958-59. THE petitioner's contention is that undet the charging provisions of the Act, the tax is payable on each gift subject to the exceptions and exemptions provided in the Act and that there is no provision in the Act for aggregating the value of all gifts made by a person during the previous year. It is claimed that Rule 3 of the Gift Tax Rules of 1958 framed by the Central Board of Revenue in exercise of the powers conferred by S. 46 of the Act travels beyond the provisions of the Act, in seeking to aggregate all the gifts made during the previous year and in levying tax on the basis of such aggregation. According to the petitioner, only the gift of Rs. 20,000, is taxable to the extent it exceeds the maximum laid down in S. 5(2) of the Act. THE proceedings of the Gift Tax Officer calling for the return in the manner stated above are attacked as beyond jurisdiction.

(3.) WE pointed out that in Sec. 3 the tax is levied in respect of the gifts, if any, made by any person during the previous year. The exemptions under S. 5(1) also are "in respect of gifts made by any person during the previous year". Section 5(2) again adopts precisely the same form of expression. WE are unable to see how these exemptions can be held to operate in respect of each gift. It is not as if the statute stated that gift tax shall not be charged in respect of any gift which is below a certain value. But the clear content of the expression "in respect of gifts made during the previous year" is that the totality of the gifts has to be taken and exemption granted up to the limits specified in the section.