- (1.) HEARD learned counsel for the applicant. This is an application under Section 27(3) of the Wealth-tax Act, 1957, for requiring the Income-tax Appellate Tribunal, Jodhpur Bench, Jodhpur, to submit the statement of case and refer the questions of law said to be arising out of the Tribunal's order dated March 25, 1998.
(2.) THE application under Section 27(1) moved before the Tribunal has been rejected on the ground that no referable questions of law arise out of its appellate order. THE proceedings have been initiated against the respondent, H.H. Rajdadi Smt. Badan Kanwar Medical Trust, in pursuance of the order under Section 25(2) of the Wealth-tax Act passed by the Commissioner of Wealth-tax and assessment was made on the trust under Section 16(3) by the assessing authority by issuing notice to it through its trustees. On appeal the Commissioner of Wealth-tax quashed the assessment orders on the ground that the trust was not assessable entity under the Wealth-tax Act, against which no proceeding could have been initiated. If at all, the assessment could have been made under Section 21 of the Wealth-tax Act as a representative of those, on whose behalf or for whose benefit the assets are held by it, if wealth-tax was otherwise leviable on such beneficiaries for whose benefit such property is held by them in trust to the extent the value of the assets represent the concerned beneficiary's interest. This order was appealed against by the Department and cross-objections were also taken by the assessee. The same were dismissed by the Tribunal by finding that the trust itself is not assessable entity at all under Section 3 of the Wealth-tax Act and therefore notices issued to the trust for the purposes of assessing the trust as an assessable entity were invalid and no proceedings could have been initiated against it. Thus finding the initiation of proceedings to be invalid, the order of the Commissioner of Wealth-tax (Appeals) was maintained. The Revenue had relied on Section 21A for the purpose of sustaining the assessment. The Tribunal repelled that contention. It held that in that event notices were required to be issued to the representative trustee who fell in the category against whom the assessment could be proceeded under Section 21A of the Act on fulfilment of the conditions. The said provision does not authorise levy of the tax on the trust as such. It is in the aforesaid facts and circumstances, the Department has made an application under Section 27(1) before the Tribunal for submitting the questions of law which according to it arose out of the Tribunal's order. The same has been rejected by holding that the answer to the question that no person other than a firm or individual, Hindu undivided family or company can be assessed under the Wealth-tax Act is obvious and stands concluded by the decision of the Supreme Court, no question of law which is required to be referred to the High Court for its opinion arose out of its order.
(3.) HAVING heard learned counsel for the applicant, we are of the opinion that though the questions sought to be raised are questions of law the answer being self-evident and consideration of the questions on the merits being academic this court would not direct the Tribunal to submit the statement of case for answering those questions. Section 3 of the Wealth-tax Act is clear in its terms which is a charging section, that the only entities recognised for the purpose of assessment under the wealth-tax as an assessee are the "individual, "the Hindu undivided family" and "the company". No other entity has been recognised for the purpose of assessment of wealth under the Act. In this connection, we may also refer to the decision of the Supreme Court referred in CWT v. Ellis Bridge Gymkhana [1998] 229 ITR 1, wherein the court unequivocably said that (page 4) : "The rule of construction of a charging section is that before taxing any person, it must be shown that he falls within the ambit of the charging section by clear words used in the section. No one can be taxed by implication. A charging section has to be construed strictly. If a person has not been brought within the ambit of the charging section by clear words, he cannot be taxed at all. . ." ;