Wakf property and wealth-tax liability: statutory fiction under section 21(1) makes the mutawalli assessable as an individual.

Wakf assets were held not to escape wealth-tax merely because they are notionally vested in the Almighty. The Court treated that conception as insufficient to take the property outside the charging provision, and read the exemption in section 5(1)(i) as unavailable. It also held that, although "individual" in section 3 refers to a human being, section 21(1) creates a statutory fiction enabling the mutawalli, as manager of property held for another, to be assessed in the same manner and to the same extent as the beneficiary. The later 1964 amendment was viewed as clarificatory.

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Issues: Whether the assets dedicated under a wakf could escape wealth-tax on the footing that they vest in the Almighty and therefore fall outside the charging provision, and whether the mutawalli is liable to be assessed as an individual under the Wealth-tax Act, 1957.

Analysis: The exemption in section 5(1)(i) was not available. The Court held that although wakf property vests in the Almighty in an ideal sense, that conception does not take the property outside the statutory charge. The expression "individual" in section 3 is confined to a human being, but section 21(1) creates a legal fiction by which the manager or trustee of property held on behalf of another is assessable in the like manner and to the same extent as the person for whose benefit the assets are held. The provision was understood to apply to wakf property, and the later amendment in 1964 merely clarified that it also covers assets held for the benefit of a beneficiary.

Conclusion: The mutawalli is an individual for the purpose of section 3, and the wakf assets are chargeable to wealth-tax. The reference was answered against the assessee and in favour of the department.

Ratio Decidendi: Wakf property, though notionally vested in the Almighty, remains chargeable to wealth-tax, and the mutawalli is assessable under the statutory fiction in section 21(1) as an individual liable to tax under section 3.

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