1. This is a reference by the Income lax Appellate Tobunal, Madras Bench, under Section 27(1) of the Wealth Tax Act, 1957. The assessment years concerned are 1957-58 to 1961-62, both years inclusive; and the question referred is;
'Whether on the facts and circumstances of the case, the Appellate Tribunal was justified in law in holding that the Puthiya Ponmanl-chintakam Wakf represented by Manager Begum P. P. Ayesha Beebi, Calicut, is not liable for tax under the Wealth Tax Act?'
2. Section 5(1)(i) of the Wealth Tax Act, 1957, provides that Wealth Tax shall not be payable bv an assessee in respect of any property held under trust or other legal obligation for any public purpose of a charitable or religious nature in India; and that such assets shall not be included in the net wealth of the assessee. It is common ground that this exemption is unavailable to the case before us.
3. The only contention urged on behalf of the assessee is that the owner of the assets in the case of wakf is the Almighty and that the Almighty does not come within the purview of Section 3, the charging section of the Wealth Tax Act, 1957. That section reads as follows:
'Subject to the other provisions contained in this Act, there shall be charged for every assessment year commencing on and from the first day of April, 1957, a tax (hereinafter referred to as wealth-tax) in respect of the not wealth on the corresponding valuation date of every individual. Hindu undivided family and company at the rate or rates specified in the Schedule.'
4. The Department does nol contend that the Almighty is a Hindu undivided family or a company. Its contention is that tin-Almighty is an individual and thus liable to taxation tinder Section 3 of the Act.
5. There is no doubt that the Almighty is a juristic person. In Ahmad Hussain v. Kallu Mian Sajlii Firm. AIR 1929 All 277, Sulaiman and Kendall JJ, said: 'God is a juristic person': and in Mohd. Ishaq v. Commr. of Income-tax, AIR 1951 All 512 Malik C. J. and Bhargava J said:
It must be held that God Almighty in the capacity of a transferee receiving properly under a deed of wakf is a juristic, entity and is. therefore, a person as used in the last sentence of Section 16(3)(b). Income-tax Act.'
6. The ambit of the expression 'person', however, is wider than that of the expression 'individual' The expression 'individual' can only mean one of the human kind, a man or a woman. There can also be no doubt that the properties of a wakf vest not in the mutawalli bill in the Almighty. As stated in Vidya Varuthi v. Baluswami, AIR 1922 PC 123, when a wakif dedicates his property his rights therein are extinguished and the ownership is trails ferretd to the Almighty. In Commr of Income-tax v. Puthiya Ponmanichintakam Wakf. AIR 1962 SC 163--a case dealing with the very wakf with which we are concerned--the Supreme Court dealt with the matter as follows:
'Under the Mahomedan Law, the moment a Wakf is created all rights of property pass out of the wakif and vest in the Almighty. The property doas not vest in the Mutawalli, for he is merely a manager and not a trustee in the technical sense. Though Wakf property belongs to the Almighty, the practical significance of that concept is explained in Jewan Doss Saboo v. Shah Kubeer-ood-deen, 2 Moo Ind App 390 (PC), thus: 'Wakf signifies the appropriation of a particular article in such a manner as subjects it to the rules of divine property, whence the appropriator's right in it is extinguished, and it becomes a properly of God, by the advantage of it resulting to His creatures'. That is, though in an ideal sense the properly vests in the Almighty, the property is held for the benefit of His creatures, that is, the beneficiaries'.
7. The word 'wakt' literally means detention. In the Islamic law of India it has come to signify a peemanent dedication by a Muslim of any property for charity, or for religious objecis or purposes, or for an object of public utility: the properties on dedication vesting in the Almighty and the mutawalli functioning as a mere procurator, manager or superintendent. In other words a mutawalli, as contended on behalf oi' the assessee, is never a trustee in the technical sense of thei term. The properties do not vest in him; and all that can be said is that he is a trustee in the general sense of that expression in that every man is a trustee to whom is entrusted the duty of managing or controlling property that belongs to another.
8. Section 21(1) of the Wealth Tax Act, 1957 however, creates a legal fiction by which a mutawalli though not a trustee in the technical sense of the term has to be treated as one and assessed to wealth-tax 'in the like manner and to the same extent as it would be leviable upon and recoverable from the person on whose behalf the assels are held'. The sub section before its amendment by the Wealth Tax (Amendment) Act. 1964, read as follows:
'In this case of assets chargeable to tax under this Act which are held bv a court of wards or an administrator-general or an official trustee or any receiver or manager or any other person, by whatever name called, appointed under any order of a court to manage property on behalf of another, or any trustee appointed under a trust declared by a duly executed instrument in writing, whether testamentary or otherwise (including a trustee under a valid deed of wakf) the wealth tax shall be levied upon and recoverable from the court of wards, administrator-general, official trustee, receiver, manager or trustee, as the case may be, in the like manner and to the same extent as it would be leviable upon and recoverable from the person on whose behalf the assels are held, and Ihe provisions of this Act shall apply accordingly'
9. The words 'on behalf of' used in the sub-section came up for consideration in Suhashini Karuri v. Wealth Tax Ofl'icer. AIR 1962 Cal 295. Sinlia J. after a detailed discussion of all the points involved, came to the conclusion that the words 'on behalf of' used in the sub-section were synonymous with the expression 'for the benefit of', and that notwithstanding that trustees hold property for the benefit of beneficiaries and not on their in-half, Section 21(1) applied to them and that they were liable to pay wealth-tax in the like manner and to the same extent as it would be leviable upon and recoverable from the bene fieiaries. We are in agreement with this con elusion
10. Sinha J. also suggested that the post tion he clarifled by a suitable amendment. The amendment has since been effected by Section 20 of the Wealth Tax (Amendment) Act, 1964, and Section 21(1) as amended reads as follows:
'In the case of assets chargeable to fax under this Act which are held by a court of wards or an administrator-general or an official trustee or any receiver or manager or any other person, by whatever name called, appointed under any order of a court to manage properly on behalf of another, or any trustee appointed under a trust declared by a duly executed instrument in writing, whether testamentary or otherwise (including a trustee under a valid deed of wakf), the wealth as shall be levied upon and recoverable from the court of wards, administrator-general, official trustee, receiver, manager or trustee, as the case may he, in the like manner and to the same extent as if would be leviable upon and recoverable from the person on whose behalf or for whose benefit the assets are held, and the provisions of this Act shall apply accordingly.'
The relevant portion of the note on clause 20 of the Wealth Tax (Amendment) Bill, 1964 which became Section 20 of the Wealth Tux (Amendment) Act, 1964, reads as follows:
'Sub-clauses (a) and (b) make certain drafting changes to clarify that the provisions of Section 21 apply where any assets are held either on behalf of the heneficiary or for the henefit of a beneficiarv '
11. There is no dispute as regards the quantum of the assessment. The mutawalli is certainly an individual within the meaning of that expression as used in Section 3 of the Wealth has Act, 1957 and in the light of what is staled above we must hold that the conclusion of the Appellate Tribunal is not correct and answer the question referred against the assessce and in favour of the Department. We do so, but in the circumstances of the case without any order as to costs
12. A copy of this judgment under seal of the High court and the signature of the Registrar will be sent to life Appellate Tribunal as required by sub section (6) of Section 27 of the Wealth Tax Act, 1957