TMI Blog1960 (1) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... ence necessary in support of his return. The petitioner appeared through his representative, a chartered accountant, and produced the evidence and made representations. After scrutinising the evidence and considering the representations, the additional wealth-tax Officer passed the assessment order dated March 20, 1958, fixing the total wealth of the petitioner at ₹ 12,25,614 and the tax due thereon at ₹ 4128,07 nP. The tax was directed to be paid on or before the 30th March, 1958. In the counter affidavit filed by the respondent, it is stated that the tax was paid by the petitioner by April 1, 1958. In this petition the petitioner contends that the respondent cannot take action under the provisions of the Wealth-tax Act, 1957, with respect to Hindu undivided family on the ground that the Wealth-tax Act, 1957, in so far as it enables the levy and collection of wealth-tax on the capital value of the asset of a Hindu undivided family, is beyond the legislative competence of the Union Parliament and consequently any action taken or purported to be taken under provisions of that Act in so far as they relate to Hindu undivided family is lacking in legal sanction and authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be charged for every financial year commencing on and from the first day of April, 1957, a tax (hereinafter referred to as wealth-tax) in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company at the rate or rates specified in the Schedule. The contention of the learned counsel for the petitioner is that the above provision is ultra vires the powers of the Union Parliament in so far as it authorises the levy of wealth-tax on the net wealth of a Hindu undivided family. It is argued that the wealth-tax is referable to and founded on entry 86 of List 1 to the Seventh Schedule to the Constitution of India, and that that entry does not authorise the imposition of the tax on the net wealth of a Hindu undivided family. Entry 86 is in these terms: Taxes on the capital value of the assets, exclusive of agricultural land, of individuals and companies; taxes on the capital of companies. On the language of the entry, it is contended that tax on the capital value of the assets can be levied on individuals and companies and since a Hindu Undivided family is a separate legal entity not falling within the scope of the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s cannot be cut down by a narrow and technical construction (vide: British Coal Corporation v. The King [1935] A.C. 500 at 518 ). In James v. Commonwealth of Australia [1936] A.C. 578 at 614 the Privy Council observed: It is true that a Constitution must not be construed in any narrow and pedantic sense. The words used are necessarily general, and their full import and true meaning can often only be appreciated when considered, as the years go on, in relation to the vicissitudes of fact which from time to time emerge. In United Provinces v. Mt. Atiqa Begum A.I.R. 1941 F.C. 16 at 25 Gwyer, C.J., observed as follows: I think, however, that none of the items in the lists is to be read in a narrow or restricted sense, and that each general word should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be said to be comprehended in it. Bearing these principles in mind, it has to be seen whether the word individuals in entry 86 can comprehend a Hindu undivided family. Two reasons are suggested as to why it could not: (i) that a Hindu undivided family is something in the nature of a corporation or a quasi-corporatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct from an artificial association. It is true that in some decided cases a Hindu undivided family has been called a corporation or something in the nature of a corporation. But as pointed out by a Bench of the Madras High Court consisting of Subrahmania Ayyar and Boddam, JJ., in Sokkanadha Vannimundar v. Sokkanadha Vannimundar [1904] I.L.R. 28 Mad. 344 a joint family though at times spoken of by judges as corporation cannot be taken as a legal person in the strict sense of term. A Hindu coparcenary governed by the Mitakshara system is a creature of law and it can be disrupted at will by any member demanding a partition. A corporation is the creature of a statute and its dissolution will have to be made and done in a prescribed manner. Every Hindu coparcenary represents a natural relationship constituted by birth between persons within the family ands a stranger cannot become a member thereof except by adoption or affiliation, as the case may be. A Corporation is not so restricted and is liable to several variations for reasons other than those that operate in the case of a Hindu coparcenary. It would be training the language to say that a Hindu coparcenary which consists of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was an association of individuals within the meaning of section 3 of the Income-tax Act and, therefore, could be assessed to income-tax as such. It was also observed that individual is not there used as denoting only a person, but takes in also a corporate body created by a statute, which is an individual within the meaning of the section. In Commissioner of Income-tax v. Madras Bar Council [1943] 11 I.T.R. 1 Leach, C.J., has held that a Bar Council is an individual or association of persons within the meaning of section 3 and therefore, its income is taxable. In Commissioner of Income-tax v. Trustees of Sir Currimbhoy Ebrahim Baronetcy Trust A.I.R. 1932 Bom. 106 it was held that the corporation was an individual within the meaning so section 3 of the income-tax Act, and not an association of individuals and was a such chargeable to income-tax. This decision was later affirmed by the Privy Council in Currimbhoy Trust v. Commissioner of Income-tax [1934] 2 I.T.R. 148. In In re Ramratan Das and Madan Gopal [1935] 3 I.T.R. 183 a Bench of the Allahabad High Court held that the expression individual in the proviso to section 55 is used in a slightly wider sense ..... X X X X Extracts X X X X X X X X Extracts X X X X
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