THE TRUSTEES OF GORDHANDAS GOVINDRAM FAMILY TRUST, BOMBAY versus THE C.L.T. BOMBAY

Citation: [1973] 2 S.C.R. 1050 · Decided: 28-11-1972 · Supreme Court of India · Bench: K.S. HEGDE · Disposal: Dismissed
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Judgment (excerpt)

1050 
THE TRUSTEES OF GORDHANDAS GOVJNDRAM FAMILY 
A 
TRUST, BOMBAY 
v. 
THE C.l.T. BOMBAY 
November 28, 1972 
[K. S. HBGDE, P. JAGANMOHAN REDDY AND H. R. KHANNA, JJ.] 
Wealth Tax Act, 1957, Ss. 3 and 5(1)(i)-Charging section not ex-
pressly mentioning association of persans as a chargeable entity-Trustees 
of a "''" whether can be charged as individuals-Construction of deed-
Trust whether a charitable trust within meaning of S. 5(1) (i) of Act. 
Four persons constituted on June 11, 1941 a Trust known as 'Gordhan-
das Govindram Family Trust'. In respect of the assessment years 1957-58 
and 1958-59 the following two questions were referred to the High C-Ourt 
under S. 27(1) of the Wealth Taix Act 1957; (a) Whether on a true 
construction of the indenture of trust dated 11-6-1941 the trustees of the 
Trust constitute an assessable unit under the provisions of the Wealth-
Tax Act; (b) Whether the property held by the trustees under the inden-
ture of trust dated 11-6-1941 is held for any public purpose of a chari · 
table or religious nature in India within the meaning of Sec. 5(1) (iJ di 
the Wealth-Tax Act? The High C-Ourt a.nswered both the questions 
against the assessees. In appeal by certificate it was contended before this 
court in respect of the first question that the charging section of the Act 
did not expressly mentions 'association of persons' as a chargeable entity 
and therefore the trustees could not be taxed. 
HELD: (i) Section 21(1) as well as S. 5(l)(i) of the Act proceed 
on the basis that a trust property comes within the scope of the Act. Sec. 3 
of. the Act does bring within its scope an individual which expression in 
view of the Central General Clauses Act includes individuals as well, 
unless the context otherwise indicates. In this case, the context, far from 
not indicating that the individual does not include individuals, clearly 
shows at any rate so far as the trustees are concerned that it includes indi-
viduals. 
As the Indian Income-tax Act provides for the assessment of 
'an association of persons' the context therein may indicate that individual 
does not include individuals. But such an interpretation is not permissible 
when we deal with Sec. 3 of"the Act. 
Therefore joint trustees can .be 
taxed as individual under the Act. 
Accordingly, the trustees of the trust 
in the present case constitute an assessable unit under the provisions of 
the Act. [! 05 H EJ 
B 
c 
D 
[ 
Commissioner of Income.tax, Madhya Pradesh and Bhopal v. Sodra 
Devi, 32, I.T.R. -615 at 620 and V. Venugopa/a Ra\'i Val'ma Rajalr 
v. 
Union of India and Another, 74. l.T.R. 49, applied. 
G 
Subashini Karuri and 
Another v. Wealth-tax Officer, 
Calcutta and 
Another, 45 I.T.R. 953 and Abhay L. Khatau and Others v. Commissioner 
of Wealth-tax, Bombay City //, 57 LT.R. 202, approved. 
Commissioner of Wea/th·tax, Bihar and Orissa v. Kripashankar Dava-
shanker, Worah, 81 I.T.R. 763 referred to. 
-
(ii) The trust in question wa.s created primarilv for the bonefit of 
II 
the members of the family of Gordhaadas Govindram Seksaria. 
This 
is_ clear from the title given to the Trust as well as from the various pro· 
V1S1ons of the trust 
deed. 
Therefore it was not possible to 
hold 
that 
.-
A 
TRUSTBBS OF GORDHANDAS V. C.I.T, (Hegde, J.) 
1051 
the Trust in question is a Trust for any public purpose. It is clearly a 
private Trust. [lOSS Fl 
Trustees of Gordlranda.i Govindram Family Charity Trust v. C'!"'-
missioner of Income-tax (Central), Bombay, 21 I.T.R. 231 at 237 applied. 
Trustees of t~ Charity F11nd v. Commissioner of Jncome--tax, Bom-
bay, 36 I.T.R. 513 referred to. 
B 
CIVIL APPELLATE JURISDICTION : Civil Appeals Nos. 2382-
c 
D 
E 
F 
G 
2383 of 1969. 
Appeals by certificate from the iudgment and ordu dated 
14th and 15th February 1968 of the Bombay High Court in 
Wealth Tax Reference No. 1. 
S. T. Desai, A. G. Menezes, I. B. Dadachlmji, 0. C, Mathur 
and Ravinder Narain for the appellant. 
T. A. Ramachandran, S. P. Nayar and R. N. Sachthey. for 
the respondent. 
Tht Judgment of the Court was delivered by 
HEGDE, J.-These are appeals by certificate .. They arise from 
a reference under s. 27(1) of the Wealth Tax Act, 1957 (To be 
hereinafter referred to as the Act). Thest appeals relate to the 
Wealth Tax assessment of the appellant -assessee for the assessment 
years 1957-58 and 1958-59, the relevant valuation dates being 
December 31, 1956 and December 31, 1957. 
The two questions of law referred to the Hig
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