Law:

Section:

Sections read with section 3 of the Wealth-tax Act, 1957 - Exemptions - Position prior to 1-4-1993 - Assessment years 1973-74 to 1980-81 - Petitioner was an association for promoting game of cricket registered under Public Trust Act and also recognised under sections 10(23) and 80G of Income-tax Act, 1961 - Whether petitioner-association did not fall in any of categories set out under section 3 and therefore, it was exempt under section 5(1)(i) - Held, yes Section 17 of the Wealth-tax Act, 1957 - Reassessment - Whether proceedings on basis of only an audit report would not be justified - Held, yes FACTS The petitioner was an association for promoting the game of cricket. The association was registered with the Charity Commissioner under the Bombay Public Trust Act, 1950. The petitioner was also registered under the Societies Registration Act. The membership of the petitioner association was open to clubs who take interest in the game of cricket. The Commissioner issued a certificate under section 80G of the 1961 Act certifying that the petitioner was established for a charitable purpose and that any sums given as donations to the petitioner would be exempted under section 80G(1) of the 1961 Act. The Central Government had also issued a certificate under section 10(23) of the 1961 Act whereby the income of the petitioner was exempted. The WTO issued notices under section 17 on the basis of an audit report to the petitioner informing the petitioner that he proposed to assess its net wealth which had escaped assessment. On writ petiton: HELD Facts clearly established that the properties held by the petitioner under trust were for a public purpose of a charitable nature. It was, therefore, obvious that the petitioner was not liable to pay wealth-tax on the assets of the petitioner and, therefore, the notices issued by were clearly illegal. The petitioner, which was an association, did not fall in any of the categories set out under section 3 in view of the two decisions of the Division Bench in Orient Club v. CWT [1982] 136 ITR 697 and Willingdon Sport Club v. C.B. Patil, 3rd Addl. WTO [1982] 137 ITR 83. In view of the decision of the Supreme Court in Indian and…

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