Law:

Section:

Section 3, read with section 19A of the Wealth-tax Act, 1957 - Individual - Assessable as - Assessment years 1957-58 to 1961-62 - Whether section 3 imposes charge only on those who own wealth and not on those who merely possess wealth for specified purposes without any personal or beneficial interest either in properties or in their income - Held, yes - Whether, therefore, before introduction of section 19A with effect from 1-04-1965, executors can not be brought to charge under section 3 in respect of properties held by them as per directions in will except as provided under section 19 - Held, yes FACTS One P owned considerable movable and immovable properties. He died leaving behind him his only son. The deceased had executed a will under which six persons had been appointed as executors. The will directed the executors to divide and distribute equally the residue among the aurasa of Pichai living at the time of his death. Return for the assessment years in question was filed by the executors declaring that there was no net wealth chargeable to tax under the Act as the executors constituted an association of persons, that an association of persons was not a "person" within the meaning of the Act and as such outside the scope of section 3 of the Act and that section 19 of the Act dealing with "liability of legal representatives" had no application to the facts of the case. The WTO, however, took the view that even if the executors constituted an "association of persons" that would not confer any exemption on the estate from wealth-tax, and that the status of the executors had to be determined with reference to the status of the deceased at the time of his death. He, therefore, completed the assessments to wealth-tax for the said years on the executors in the status of an "individual" under section 16(3). The AAC was of the view that after carrying out the first set of directions in the will in respect of the disposition of monies and creation of a charitable trust, the executors must have become trustees and such trustees as a group of individuals would come within the scope of section 3. The Tribunal accepted the stand taken by the revenue that the executors…

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