1984 (3) TMI 203 - AT - Wealth-tax

State Bank of Travancore Union Liable for Wealth Tax as 'Individual'

STATE BANK OF TRAVANCORE EMPLOYEES UNION. Versus WEALTH TAX OFFICER.

The Tribunal held that the State Bank of Travancore Employees Union, registered as a trade union and a body corporate, is liable to wealth tax as an ... - Issues Involved:1. Whether the State Bank of Travancore Employees Union, a trade union registered under the Indian Union Act, 1926, is liable to wealth-tax in the status of an individual.Detailed Analysis:Issue 1: Liability to Wealth-Tax as an IndividualThe primary issue before the Special Bench was whether the State Bank of Travancore Employees Union, a registered trade union, should be assessed for wealth-tax as an individual. This case was referred to a Special Bench due to differing interpretations of similar cases under the Income Tax Act, 1961, and the Wealth Tax Act, 1957.Assessee's Argument:The assessee's representative argued that under Section 13 of the Indian Trade Union Act, a registered trade union is a body corporate, which is distinct from its members and not an assessable entity under the Wealth Tax Act. The representative contended that the term 'individual' in the Act should be interpreted to include only natural human beings, not artificial persons or bodies corporate. Reliance was placed on the decisions of the Gujarat High Court in Orient Club vs. WTO and the Bombay High Court in Orient Club vs. CWT, which suggested that certain entities classified as companies by the Central Board of Direct Taxes (CBDT) could be treated as taxable units. The trade union had not been declared as a company by the CBDT, thus it should not be liable to wealth-tax.Department's Argument:The Departmental Representative countered that the principles established by the Supreme Court in various income-tax cases, such as CIT vs. Sodra Devi, should apply to wealth-tax assessments as well. The representative cited multiple cases to argue that the term 'individual' includes entities like corporations and groups of persons forming a unit. The Department also argued that the Tribunal cannot question the constitutionality of the wealth-tax levy, as it is a statutory body.Tribunal's Analysis:Upon careful consideration, the Tribunal found no merit in the assessee's objections. It referred to the Supreme Court's decision in Sodra Devi's case, which held that the term 'individual' includes both human beings and entities like corporations. The Tribunal also cited several High Court decisions, including Khan Bahadur Chowakkaran Keloth Mammad Keyi vs. WTO and Andhra Pradesh State Road Transport Corpn. vs. ITO, which supported the view that 'individual' encompasses a wide range of entities, including registered trade unions.The Tribunal noted that Section 13 of the Indian Trade Unions Act explicitly states that a registered trade union is a body corporate with perpetual succession and a common seal, capable of holding property and entering into contracts. This legal status aligns with the broader interpretation of 'individual' as established in various judicial decisions.Conclusion:The Tribunal concluded that the State Bank of Travancore Employees Union, being a registered trade union and a body corporate, is chargeable to wealth-tax in the status of an 'individual'. The appeal was dismissed, and the orders of the Departmental Authorities were upheld. The Tribunal also acknowledged the valuable assistance provided by the representatives of both parties.Final Judgment:The appeals were dismissed, and the assessee, State Bank of Travancore Employees Union, was held liable to wealth-tax in the status of an individual.