1991 (4) TMI 69 - HC - Wealth-tax

Court rules shares of deities equal under law, assessment under wrong section, no costs awarded.

Ganapati Panchayatan Sansthan Trust Versus Commissioner Of Wealth-Tax

The court ruled in favor of the assessee, determining that the shares of the deities were known and should be considered equal under general law. The ... Trusts, Wealth Tax Issues Involved:1. Whether the applicant was assessable to wealth-tax under section 21(4) or section 21(1) of the Wealth-tax Act, 1957, for the assessment years 1965-66 to 1969-70.Detailed Analysis:Issue 1: Applicability of Section 21(4) vs. Section 21(1) of the Wealth-tax ActThe primary issue in this case was whether the trust in question should be assessed under section 21(4) or section 21(1) of the Wealth-tax Act, 1957, for the assessment years 1965-66 to 1969-70. The trust, known as 'Shri Ganapati Panchayatan Sansthan,' was originally created by the first Ruler of Sangli State for the maintenance and worship of the family deity, Ganapati. The trust was later recognized as a private religious trust, with its objects including the worship of the deity and other associated religious activities.Arguments by the Assessee:- The assessee argued that the shares of the beneficiaries (the five deities) should be considered equal under the general law, as supported by various judicial precedents.- The assessee cited cases such as Sri Sri Jyotishwari Kalimata v. CIT [1946] 14 ITR 703 (Patna High Court), CIT v. Pulin Behari Dey [1951] 20 ITR 314 (Calcutta High Court), and CIT v. Smt. Ashalata Devi [1951] 20 ITR 326 (Calcutta High Court), which held that when shares are not specified, they should be taken as equal.- The assessee also argued that the discretion given to the trustee to spend on other religious charities did not make the shares of the deities indeterminate or unknown.Arguments by the Department:- The Department contended that the shares of the beneficiaries were indeterminate and unknown, justifying the assessment under section 21(4).- The Department relied on cases like Panchanan Das v. CIT [1951] 20 ITR 57 (Calcutta High Court) and Chintamani Ghosh Trust v. CWT [1971] 80 ITR 331 (Allahabad High Court), which supported the view that discretionary powers of the trustee could lead to indeterminate shares of beneficiaries.Court's Analysis:- The court examined various judicial precedents cited by both parties. It noted that in cases like Sri Sri Jyotishwari Kalimata v. CIT [1946] 14 ITR 703 and CIT v. Pulin Behari Dey [1951] 20 ITR 314, the courts had held that shares should be considered equal when not specified.- The court distinguished the present case from Panchanan Das v. CIT [1951] 20 ITR 57, where the trustee had the discretion to vary the amounts spent on different festivals, making the shares indeterminate.- The court also considered the Allahabad High Court decision in Chintamani Ghosh Trust v. CWT [1971] 80 ITR 331, but found it not applicable as the present case involved only natural or juridical persons as beneficiaries.Conclusion:- The court concluded that the trust was for the benefit of the five deities and that their shares should be considered equal under the general law.- The court held that the shares of the deities were determinate and known, and therefore, the assessment should not have been made under section 21(4) of the Wealth-tax Act.- The court answered the question in the affirmative and in favor of the assessee, stating that the Tribunal erred in holding that the applicant was assessable to wealth-tax under section 21(4) instead of section 21(1).Final Judgment:- The court ruled in favor of the assessee, concluding that the shares of the deities were determinate and known, and the assessment should be made under section 21(1) of the Wealth-tax Act.- No order as to costs was made.