Law: Wealth Tax Act, (XV of 1963)

Section: 3,2(e)(ii),2(m),Expl.(iii)

(a) Wealth Tax Act (XV of 1963)-- ---Ss. 3 & 2 (e) (ii) & 2 (m), Expl. (iii)--Categories of assessees brought to tax net for the purpose of Wealth Tax enlisted. The following categories of an assessee have been brought to tax net for the purposes of wealth tax. (a) Individual and Hindu undivided family; (b) Firm and Company; (c) Association of persons or body of individuals; (d) Notional association of persons. All the above categories of assessees have not been subjected to tax since the very inception of Wealth Tax Act, 1963 but the scheme has developed gradually and progressively, therefore, a brief history of legislation in this behalf shall be helpful in clinching the issue. At the time of promulgation of the said Act, in the year 1963 only one category of assessees comprising of two classes, i.e. individual and Hindu undivided family was charged to tax under section 3 which is a charging section. The firm, association of persons, body of individuals and company were brought to tax net by amendment in section 3 of the said Act under the Wealth Tax (Amendment) Ordinance, 1980 with effect from 28-6-1979. Alongwith the amendment in section 3 of the said Act, section 2 (e) was also amended whereby the immovable property held for the purpose of business of construction and. sale or letting out of property owned by a firm, association of persons, or body of individuals and a company was included in the assets. Thereafter Explanation (iii) to section 2 (m) was added by Finance Ordinance, 1980 whereby a new category of notional or fictional A.O.P. was created and in all cases where a property unit stood registered in the name of more than one individual the unit was treated as property owned by an AOP and was made liable to be assessed in the hands of AOP. On recapitulation of legislative history the following position emerges: (a) Individual and Hindu undivided family were subjected to wealth tax since the very promulgation of the said Act in the year 1963. (b) The firms, companies and association of persons or body of individuals have beep subjected to wealth tax with effect from 28-6-1979 by virtue of amendments introduced in section 3 and section 2 (e)…

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