21. Assessment when assets are held by Courts of wards, administrators-general, etc .-(1) [Subject to the provisions of sub-section (1-A), in the case of assets chargeable to tax under this Act], which are held by a Court of wards or an administrator-general or an official trustee or any receiver or manager or any other person, by whatever name called, appointed under any order of a Court to manage property on behalf of another, or any trust appointed under a trust declared by a duly executed instrument in writing, whether testamentary or otherwise (including a trustee under a valid deed of wakf), the wealth-tax shall be levied upon and recoverable from the Court of wards, administrator-general, official trustee, receiver, manager or trustee, as the case may be, in the like manner and to the same extent as it would be leviable upon and recoverable from the person [on whose behalf or for whose benefit] [ Substituted by Act 46 of 1964, Section 20, for " on whose behalf" (w.e.f. 1.4.1965).] the assets are held, and the provisions of this Act shall apply accordingly.
[ Explanation.-A trust which is not declared by a duly executed instrument in writing (including a valid deed of wakf) shall be deemed, for the purposes of this sub-section, to be a trust declared by a duly executed instrument in writing if a statement in writing, signed by the trustee or trustees, setting out the purpose or purposes of the trust, particulars as to the trustee or trustees, the beneficiary or beneficiaries and the trust property, is forwarded to the ] [Inserted by Act 16 of 1981, Section 26 (w.e.f. 1.4.1981). ][Assessing Officer] [ Substituted by Act 4 of 1988, Section 127, for " Wealth-tax Officer" (w.e.f. 1.4.1988).][,-(i)where the trust has been declared before the 1st day of June, 1981, within a period of three months from that day; and(ii)in any other case, within three months from the date of declaration of the trust.] [Inserted by Act 16 of 1981, Section 26 (w.e.f. 1.4.1981). ][(1-A) Where the value or aggregate value of the interest or interests of the person or persons on whose behalf or for whose benefit such assets are held falls short of the value of any such assets, then, in addition to the wealth-tax leviable and recoverable under sub-section (1), the wealth-tax shall be levied upon and recovered from the Court of wards, administrator-general, official trustee, receiver, manager or other person or trustee aforesaid in respect of the value of such assets, to the extent it exceeds the value or aggregate value of such interest or interests, as if such excess value were the net wealth of an individual who is a citizen of India and resident in India for the purposes of this Act, and¬(i)at the rates specified in Part I of Schedule I; or(ii)at the rate of three per cent., whichever course would be more beneficial to the revenue.] [ Inserted by Act 44 of 1980, Section 40 (w.e.f. 1.4.1980).](2)Nothing contained in sub-section (1) shall prevent either the direct assessment of the person [on whose behalf or for whose benefit] [ Substituted by Act 46 of 1964, Section20, for " on whose behalf" (w.e.f. 1.4.1965).] the assets above referred to are held, or the recovery from such person of the tax payable in respect of such assets.(3)Where the guardian or trustee of any person being a minor, lunatic or idiot [* * *] [ Omitted by Act 46 of 1964, Section 20 (w.e.f. 1.4.1965).] holds any assets [on behalf or for the benefit of such beneficiary,] [ Substituted by Act 46 of 1964, Section 20, for " on behalf of such beneficiary" (w.e.f. 1.4.1965).] the tax under this Act shall be levied upon and recoverable from such guardian or trustee, as the case may be, in the like manner and to the same extent as it would be leviable upon and recoverable from any such beneficiary if of full age, of sound mind and in direct ownership of such assets.(4)[ ] [Substituted by Act 19 of 1970, Section 26, for sub-Section (4)(w.e.f. 1.4.1971). ][Notwithstanding anything contained in the foregoing provisions of this section] [ Substituted by Act 16 of 1981, Section 26, for " Notwithstanding anything contained in this section" (w.e.f. 1.4.1981).][, where the shares of the persons on whose behalf or for whose benefit any such assets are held are indeterminate or unknown, the wealth-tax shall be levied upon and recovered from the Court of wards, administrator-general, official trustee, receiver, manager, or other person aforesaid] [Substituted by Act 19 of 1970, Section 26, for sub-Section (4)(w.e.f. 1.4.1971). ][, as the case may be, in the like manner and to the same extent as it would be leviable upon and recoverable from an individual who is a citizen of India and resident in India] [ Substituted by Act 44 of 1980, Section 40, for certain words (w.e.f. 1.4.1980).][for the purposes of this Act, and-(a)at the rates specified in Part I of ] [Schedule I ] [ Substituted by Act 66 of 1976, Section 27, for " the Schedule" (w.e.f. 1.4.1977).][* * *] [ Omitted by Act 32 of 1971, Section 34 (w.e.f. 1.4.1972).][or [Substituted by Act 19 of 1970, Section 26, for sub-Section (4)(w.e.f. 1.4.1971). ](b)at the rate of ][three per cent.] [ Substituted by Act 44 of 1980, Section 40, for " one and one-half per cent." (w.e.f. 1.4.1980).][, whichever course would be more beneficial to the revenue: [Substituted by Act 19 of 1970, Section 26, for sub-Section (4)(w.e.f. 1.4.1971). ]Provided that in a case where-(i)such assets are held ][under a trust declared by any person by will and such trust is the only trust so declared by him] [ Substituted by Act 44 of 1980, Section 40 for " under a trust declared by will" (w.e.f. 1.4.1980).][; or] [Substituted by Act 19 of 1970, Section 26, for sub-Section (4)(w.e.f. 1.4.1971). ](ia)[ none of the beneficiaries has net wealth exceeding the amount not chargeable to wealth-tax in the case of an individual who is a citizen of India and resident in India for the purposes of this Act or is a beneficiary under any other trust; or] [ Inserted by Act 44 of 1980, Section 40 (w.e.f. 1.4.1980).](ii)[ such assets are held under a trust created before the 1st day of March, 1970, by a non-testamentary instrument and the ] [Substituted by Act 19 of 1970, Section 26, for sub-Section (4)(w.e.f. 1.4.1971). ][Assessing Officer] [ Substituted by Act 4 of 1988, Section 127, for " Wealth-tax Officer" (w.e.f. 1.4.1988).][is satisfied, having regard to all the circumstances existing at the relevant time, that the trust was created bona fide exclusively for the benefit of the relatives of the settlor or where the settlor is a Hindu undivided family, exclusively for the benefit of the members of such family, in circumstances where such relatives or members were mainly dependent on the settlor for their support and maintenance; or [Substituted by Act 19 of 1970, Section 26, for sub-Section (4)(w.e.f. 1.4.1971). ](iii)such assets are held by the trustees on behalf of a provident fund, superannuation fund, gratuity fund, pension fund or any other fund created bona fide by a person carrying on a business or profession exclusively for the benefit of persons employed in such business or profession, wealth-tax shall be charged at the rates specified in Part I of ] [Substituted by Act 19 of 1970, Section 26, for sub-Section (4)(w.e.f. 1.4.1971). ][Schedule I ] [Substituted by Act 66 of 1976, Section 27, for " the Schedule" (w.e.f. 1.4.1977). ][* * *] [ Omitted by Act 32 of 1971, Section 34 (w.e.f. 1.4.1972).][ Explanation 1.-For the purposes of this sub-section, the shares of the persons on whose behalf or for whose benefit any such assets are held shall be deemed to be indeterminate or unknown unless the shares of the persons on whose behalf or for whose benefit such assets are held on the relevant valuation date are expressly stated in the order of the Court or instrument of trust or deed of wakf, as the case may be, and are ascertainable as such on the date of such order, instrument or deed.] [ Inserted by Act 44 of 1980, Section 40 (w.e.f. 1.4.1980).][[ Explanation 2] [Inserted by Act 32 of 1971, Section 34 (w.e.f. 1.4.1972). ][.-Notwithstanding anything contained in section 5, in computing the net wealth ] [Inserted by Act 32 of 1971, Section 34 (w.e.f. 1.4.1972). ][for the purposes of this sub-section or sub-section (4-A) in any case, not being a case referred to in the proviso to this sub-section] [ Substituted by Act 16 of 1981, Section 26, for certain words (w.e.f. 1.4.1981).][, any assets referred to in clauses (xv), (xvi), (xxii), (xxiii), (xxiv), (xxv), (xxvi), (xxvii), (xxviii) and (xxix), of sub-section (1) of that section shall not be excluded.] [Inserted by Act 32 of 1971, Section 34 (w.e.f. 1.4.1972). ][(4-A) Notwithstanding anything contained in this section, where the assets chargeable to tax under this Act are held by a trustee under an oral trust, the wealth-tax shall be levied upon and recovered from such trustee in the like manner and to the same extent as it would be leviable upon and recoverable from an individual who is a citizen of India and resident in India for the purposes of this Act, and¬-(a)at the rates specified in Part I of Schedule I; or(b)at the rate of three per cent., whichever course would be more beneficial to the revenue.Explanation.-For the purposes of this sub-section, "oral trust" means a trust which is not declared by a duly executed instrument in writing (including a valid deed of wakf) and which is not deemed under the Explanation to sub-section (1) to be a trust declared by a duly executed instrument in writing.] [ Inserted by Act 16 of 1981, Section 26 (w.e.f. 1.4.1981).](5)[ Any person who pays any sum by virtue of the provisions of this section in respect of the net wealth of any beneficiary shall be entitled to recover the sum so paid from such beneficiary, and may retain out of any assets that he may hold on behalf or for the benefit of such beneficiary, an amount equal to the sum so paid.Explanation.-In this section, the term "beneficiary" means any person including a minor, lunatic or idiot on whose behalf or for whose benefit assets are held by any other person.] [ Inserted by Act 46 of 1964, Section 20 (w.e.f. 1.4.1965).](6)[ Nothing contained in this section shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1993, or any subsequent assessment year.] [ Inserted by Act 18 of 1992, Section 94 (w.e.f. 1.4.1993).][21-A. Assessment in cases of diversion of property, or of income from property, held under trust for public charitable or religious purposes.- ][Notwithstanding anything contained in clause (1) of section 5, where any property is held] [ Substituted by Act 33 of 1996, Section 58, for " Where any property is held" (w.e.f. 1.4.1993).] under trust for any public purpose of a charitable or religious nature in India, and(i)[ any part of such property or any income of such trust whether derived from such property or from voluntary contributions referred to in sub-clause (ii-a) of clause (24) of section 2 of the Income-tax Act] [ Substituted by Act 21 of 1984, Section 34, for certain words (w.e.f. 1.4.1985).], being a trust created on or after the 1st day of April, 1962 enures, directly or indirectly, for the benefit of [any interested person] [ Substituted by Act 4 of 1988, Section 144, for certain words (w.e.f. 1.4.1989).], or(ii)any part of the income of the trust whether derived from such property or from voluntary contributions referred to in sub-clause (iia) of clause (24) of section 2 of the Income-tax Act, being a trust created on or after the 1st day of April, 1962 enures, directly or indirectly, for the benefit of [any interested person] [ Substituted by Act 4 of 1988, Section 144, for certain words (w.e.f. 1.4.1989).], or[* * *] [ Clause (ii) omitted by Act 4 of 1988, Section 144 (w.e.f. 1.4.1989).]wealth-tax shall be leviable upon, and recoverable from the trustee or manager (by whatever name called) in the like manner and to the same extent as if the property were held by an individual who is a citizen of India and resident in India for the purposes of this Act, [* * *] [ Certain words omitted by Act 18 of 1992, Section 95 (w.e.f. 1.4.1993).]:Provided that in the case of a trust created before the 1st day of April, 1962, the provisions of clause (i) shall not apply to any use or application, whether directly or indirectly, of any part of such property or any income of such trust for the benefit of [any interested person] [ Substituted by Act 4 of 1988, Section 144, for certain words (w.e.f. 1.4.1989).] such use or application is by way of compliance with a mandatory term of the trust:[* * *] [ Second Proviso omitted by Act 18 of 1992, Section 95 (w.e.f. 1.4.1993).][[Provided further that] [Inserted by Act 21 of 1984, Section 34 (w.e.f. 1.4.1985). ],-(a)[ in the case of any trust or institution of national importance notified under clause (d) of sub-section (1) of section 80-F of the Income-tax Act,] [ Substituted by Act 4 of 1988, Section 144, for certain words (w.e.f. 1.4.1989).]-(i)[ the provisions of clause (i) and clause (ii) shall not apply, and [Inserted by Act 21 of 1984, Section 34 (w.e.f. 1.4.1985). ](ii)the other provisions of this section shall apply with the modification that for the words "at the maximum marginal rate", the words and figures "at the rates specified in ] [sub-section (2) of section 3] [ Substituted by Act 18 of 1992, Section 95, for " Part I of Schedule I in the case of an individual" (w.e.f. 1.4.1993).][shall be substituted; [Inserted by Act 21 of 1984, Section 34 (w.e.f. 1.4.1985). ](b)in the case of any institution, fund or trust referred to in clause (22) or clause (22-A) or clause (23-B) or clause (23-C) of section 10 of the Income-tax Act, the provisions of ][clauses (i) to (ii) shall not apply.] [ Substituted by Act 4 of 1988, Section 144 (w.e.f. 1.4.1989).][ Explanation.-For the purposes of this section,-] [Inserted by Act 21 of 1984, Section 34 (w.e.f. 1.4.1985). ](a)[ the expression "interested person" shall have the meaning assigned to it in clause (a) of Explanation I below sub-section (4) of section 80-F of the Income-tax Act; [Substituted by Act 4 of 1988, Section 144 (w.e.f. 1.4.1989). ](ab)any part of the property or income of a trust shall be deemed to have been used or applied for the benefit of any interested person in every case in which it can be so deemed to have been used or applied within the meaning of clause (c) of sub-section (3) of section 80-F of the Income-tax Act at any time during the period of twelve months ending with the relevant valuation date;][* * *] [ Clause (aa) omitted by Act 18 of 1992, Section 95 (w.e.f. 1.4.1993).](b)[ "trust" includes any other legal obligation.] [Inserted by Act 21 of 1984, Section 34 (w.e.f. 1.4.1985). ][21-AA. Assessment when assets are held by certain associations of persons.-(1) Where assets chargeable to tax under this Act are held by an association of persons, other than a company or co-operative society ][or society registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India] [ Inserted by Act 13 of 1989, Section 29 (w.e.f. 1.4.1989).][, and the individual shares of the members of the said association in the income or assets or both of the said association on the date of its formation or at any time thereafter are indeterminate or unknown, the wealth-tax shall be levied upon and recovered from such association in the like manner and to the same extent as it would be leviable upon and recoverable from an individual who is a citizen of India and resident in India for the ] [Inserted by Act 16 of 1981, Section 27 (w.e.f. 1.4.1981). ][purposes of this Act] [Substituted by Act 4 of 1988, Section 145, for certain words (w.e.f. 1.4.1989). ][* * *] [ Certain words omitted by Act 18 of 1992, Section 96 (w.e.f. 1.4.1993).].(2)[ Where any business or profession carried on by an association of persons referred to in sub-section (1) has been discontinued or where such association of persons is dissolved, the ] [Inserted by Act 16 of 1981, Section 27 (w.e.f. 1.4.1981). ][Assessing Officer] [ Substituted by Act 4 of 1988, Section 127, for " Wealth-tax Officer" (w.e.f. 1.4.1988).][shall make an assessment of the net wealth of the association of persons as if no such discontinuance or dissolution had taken place and all the provisions of this Act, including the provisions relating to the levy of penalty or any other sum chargeable under any provision of this Act, so far as may be, shall apply to such assessment.(3)Without prejudice to the generality of the provisions of sub-section (2), if the ] [Inserted by Act 16 of 1981, Section 27 (w.e.f. 1.4.1981). ] [Assessing Officer] [ Substituted by Act 4 of 1988, Section 127, for " Wealth-tax Officer" (w.e.f. 1.4.1988).][or the ] [Inserted by Act 16 of 1981, Section 27 (w.e.f. 1.4.1981). ] [Joint Commissioner] [ Substituted by Act 4 of 1988, Section 127, for " Appellate Assistant Commissioner" (w.e.f. 1.4.1988).][(Appeals)] [ Substituted by Act 4 of 1988, Section 127, for " Appellate Assistant Commissioner" (w.e.f. 1.4.1988).] [or the Commissioner (Appeals) in the course of any proceedings under this Act in respect of any such association of persons as is referred to in sub-section (1) is satisfied that the association of persons was guilty of any of the acts specified in section 18 or section 18-A, he may impose or direct the imposition of a penalty in accordance with the provisions of the said sections.(4)Every person who was at the time of such discontinuance or dissolution a member of the association of persons, and the legal representative of any such person who is deceased, shall be jointly and severally liable for the amount of tax, penalty or other sum payable, and all the provisions of this Act, so far as may be, shall apply to any such assessment or imposition of penalty or other sum.(5)Where such discontinuance or dissolution takes place after any proceedings in respect of an assessment year have commenced, the proceedings may be continued against the persons referred to in sub-section (4) from the stage at which the proceedings stood at the time of such discontinuance or dissolution, and all the provisions of this Act shall, so far as may be, apply accordingly.] [Inserted by Act 16 of 1981, Section 27 (w.e.f. 1.4.1981). ][* * *] [ Explanation omitted by Act 18 of 1992, Section 96 (w.e.f. 1.4.1993).].
