- (1.) THE Tribunal, New Delhi, has referred the following questions of law under s. 27(3) of the WT Act, 1957 (hereinafter referred to as 'the Act') for opinion to this Court : "1. Whether, on the facts and circumstances of the case, the Tribunal was legally justified in upholding the order of the AAC annulling the assessment ?
(2.) WHETHER , on the facts and circumstances of the case, the Tribunal was legally justified in not pronouncing the decision on merits of the case - 2. The reference relates to the asst. yrs. 1979 -80 to 1982 -83.
(3.) BRIEFLY stated the facts giving rise to the present reference are as follows : The respondent -assessee is a society registered under the Societies Registration Act and is running a race club at Meerut. Its claim was that it was an AOP and under the Act an AOP is not an assessable entity. The contention was not accepted by the WTO. Feeling aggrieved the respondent preferred separate appeal before the AAC who had accepted the claim of the respondent that the AOP is 'not' an assessable entity by following the order of the Tribunal passed in the preceding asst. yr. 1977 -78. The order of the AAC has been upheld by the Tribunal. We have heard Sri A.N. Mahajan, the learned counsel for the Revenue and Sri A. Agarwal holding brief of Sri P.K. Jain, learned counsel appearing for the respondent. which the assets held by the AOP have been made taxable under the Act. The question regarding applicability of s. 21AA of the Act came up for consideration before the apex Court in the case of CWT vs. Ellis Bridge Gymkhana (1997) 143 CTR (SC) 138 : AIR 1998 SC 120 in which the apex Court has held that the position has been placed beyond doubt by provides for assessment of AOP in certain special cases and not otherwise. An AOP cannot be taxed at all under s. 3 of the Act. That is why an amendment was necessary to be made by the Finance Act, 1981 whereby s. 21AA was inserted to bring to tax net wealth of an AOP where individual shares of the members of the association were unknown or indeterminate. It is thus clear that the legislature deliberately excluded a firm or an AOP from the charge of wealth -tax and the word 'individual' in the charging section cannot be stretched to include entities which had been deliberately left out of the charge. An unincorporated club being an AOP could not be brought to tax as an individual under the WT Act. 6. In view of the principle laid down by the apex Court, we are of the considered opinion that the respondent -assessee onwards, it became an assessable entity in view of the provisions of s. 21AA of the Act. 7. Accordingly, we answer the first question referred to us partly in favour of the assessee and partly in favour of the Revenue by holding that the Tribunal was justified in annulling the assessment for the asst. yrs. 1979 -80 and 1980 -81 and it was not justified in annulling the assessment for the asst. yrs. 1981 -82 and 1982 -83. In view of our answer to the first question, the second question has to be answered in negative, i.e., in favour of the Revenue and against the assessee insofar as it relates to the asst. yrs. 1981 -82 and 1982 -83. In view of the divided success, the parties are left to bear their own costs.;