Law:

Section:

Section 21, read with section 3 of the Wealth-tax Act, 1957 - Trust/Trustees - Assessment when assets are held by - Assessment years 1957-58 to 1961-62 - Whether mutawalli is an individual within meaning of expression as used in section 3 - Held, yes - Whether, therefore, assessee-wakf represented by manager (mutawalli) was liable to tax under Act - Held, yes FACTS For the assessment years in question, the assessee, a wakf, claimed that the owner of the assets in the case of a wakf was the Almighty and that the Almighty did not come within the purview of section 3 and, thus, not liable for tax under the Act. However, the department held that the Almighty was an individual and, thus, liable to taxation under section 3. On appeal, the Tribunal held that wakf represented by manager was not liable for tax under the Act. On reference: HELD The word 'wakf' literally means detention. In the Islamic law of India it has come to signify a permanent dedication by a Muslim of any property for charity, or for religious objects 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, is never a trustee in the technical sense of the 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. Section 21(1) 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 assets are held'. There was no dispute as regards the quantum of the assessment. The mutawalli was certainly an individual within the meaning of that expression as used in section 3, and, in the light of what was stated above, the conclusion of the Tribunal was not correct Therefore, the assessee- wakf represented by the manager was liable to tax. Note: The case…

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