{"id":271398,"date":"1986-03-28T00:00:00","date_gmt":"1986-03-27T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/bombay-cricket-association-vs-b-r-sonkar-1st-wealth-tax-on-28-march-1986"},"modified":"2015-06-05T15:11:49","modified_gmt":"2015-06-05T09:41:49","slug":"bombay-cricket-association-vs-b-r-sonkar-1st-wealth-tax-on-28-march-1986","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/bombay-cricket-association-vs-b-r-sonkar-1st-wealth-tax-on-28-march-1986","title":{"rendered":"Bombay Cricket Association vs B.R. Sonkar, 1St, Wealth-Tax … on 28 March, 1986"},"content":{"rendered":"
Bombay High Court<\/div>\n
Bombay Cricket Association vs B.R. Sonkar, 1St, Wealth-Tax … on 28 March, 1986<\/div>\n
Equivalent citations: 1987 166 ITR 356 Bom<\/div>\n
Author: Pendse<\/div>\n
Bench: M Pendse<\/div>\n

JUDGMENT<\/p>\n

Pendse, J.\n<\/p>\n

1. The petitioner is an association for promoting the game of cricket. The association was establish din the year 1930 and is registered with the Charity Commissioner under the Bombay Public Trusts Act, 1950. The petitioner is also registered under the Societies Registration Act<\/a>. The membership of the petitioner association is open to clubs who take interest in the game of cricket. The Commissioner of Income-tax has issued a certificate under section 80G<\/a> of the Income-tax Act. The government of India, Ministry of Finance, had also issued a certificate under section 10(23)<\/a> of the Income-tax Act whereby the income of the petitioner is exempted.\n<\/p>\n

2. Respondent No. 1, 1st Wealth-tax Officer, Trust Circle, issued notices under section 17<\/a> of the Wealth-tax Act, 1957, to the petitioner for the assessment years 1973-74 to 1980-81 informing the petitioner that he proposed to assess its net wealth which had escaped assessment. The petitioner was called upon the file returns in respect of these assessment years. The notices were issued on March 31, 1982. The petitioner replied on May 3, 1982, pointing out that the petitioner was not an assessee as contemplated under section 3<\/a> of the Wealth-tax Act. The petitioner also pointed our that in accordance with the provisions of section 5(1)(i)<\/a> of the Wealth-tax Act, wealth-tax was not payable by the petitioner in respect of the properties held by the petitioner. The petitioner did not receive any positive response from the Wealth-tax Officer and that has given rise to the filing of the present petition on September 3, 1982, under article 226<\/a> of the constitution of India.\n<\/p>\n

3. Shri Dastur, learned counsel appearing on behalf of the petitioner, praised three contentions to challenge the legality of the notice. The first submission of learned counsel is that in view of the provisions of section 5(1)(i)<\/a> of the Wealth-tax Act, wealth-tax is not payable on any property held under a trust for any public purpose of a charitable nature. Section 5(1)(i)<\/a> prescribes that wealth-tax shall not be payable by an assessee in respect of any property held by him under trust or under legal obligation for a public purpose of a charitable or religious nature in India, and such assets shall not be included in the net wealth of the assessee. Shri Dastur submits that the Commissioner of Income-tax has issued a certificate under section 80G<\/a> of the Income-tax Act declaring that the petitioner is an institution established for a charitable purpose. The aims and object of the petitioner are public purposes of a charitable nature and the petitioner is also registered under the Bombay Public Trusts Act and the Societies Registration Act<\/a>. Theses facts clearly establish that the properties held by the petitioner under trust are for a public purpose of a charitable nature. It is, therefore, obvious that the petitioner is notable to pay wealth-tax on the assets of the petitioner and, therefore, the notices issued by respondent No. 1 are clearly illegal.\n<\/p>\n

4. The second submission of earned counsel is that the petitioner, which is an association, cannot be treated as an assessee under section 3<\/a> of the Wealth-tax Act. Section 3<\/a> prescribes that wealth-tax will be charges in respect of the net wealth of every individual, Hindu undivided family and company. Shri Dastur submits that the petitioner, which is an association, does not fall in any of the categories set out under section 3<\/a> and the submission deserves acceptance in view of the two decisions of the Division Bench of this court in Orient Club v. CWT [1982] 136 ITR 697 and Willingdon Sports Club v. C. B. Patil<\/a>, 3rd Addl. WTO [1982] 137 ITR 83. Shri Parekh, learned counsel appearing for the revenue, submitted that the Madras High Court did not agree with the view of the Division Bench of this court. In my judgment, that makes little difference as I am bound by the decisions of this court. Shri Dastur also submitted with reference to the averments made in paragraph 7 of the petition, that the notices were issued by the Wealth-tax Officer on the basis of an audit report, and urged that the demand of the Revenue based on the audit report would not confer jurisdiction on the Wealth-tax Officer to claim that wealth has escaped assessment. Learned counsel relied upon the decision of the Supreme Court in Indian and Eastern Newspaper Society v. CIT<\/a> [1979] 119 ITR 996, in support of the submission. The Revenue has not filed any affidavit in answer to the petition and the claim made by the petitioner that the notices under section 17<\/a> of the Wealth-tax Act were issued in pursuance of the revenue audit is not denied. In view of the decision of the Supreme Court, commencement of proceedings on the basis of only an audit report are clearly illegal. The petitioner is entitled to succeed on this count also.\n<\/p>\n

5. Accordingly, the rule is made absolute, in terms of prayer (a). In the circumstances of the case, there will be no order as to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"

Bombay High Court Bombay Cricket Association vs B.R. Sonkar, 1St, Wealth-Tax … on 28 March, 1986 Equivalent citations: 1987 166 ITR 356 Bom Author: Pendse Bench: M Pendse JUDGMENT Pendse, J. 1. The petitioner is an association for promoting the game of cricket. The association was establish din the year 1930 and is registered with […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[11,8],"tags":[],"class_list":["post-271398","post","type-post","status-publish","format-standard","hentry","category-bombay-high-court","category-high-court"],"yoast_head":"\nBombay Cricket Association vs B.R. 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