INCOME TAX OFFICER Vs. MRS. DWARIKA PRASAD TRUST.

JUDGEMENT

(1.) These appeals by the Revenue are directed against the orders of the AAC for the asst. years 1975 -76, 1978 -79 and 1981 -82. All these orders are made by the learned AAC on 5 - 9 -1984. However, the main speaking order is made the year 1975 -76. From both the sides, the parties agreed that arguments for the asst. Year 1975 -76 shall apply mutates mutants to other years and our decision, in this case, for this year, will cover the wealth -tax assessments for the asst. years 1974 -75 and 1975 -76. We have, Therefore, heard the parties, in parties in this case and proceed to decide the issues brought in appeal before us.

(2.) The assessed before us is a trust known as Mrs. Dwarika Prasad Trust, 56 Civil Lines, Bareilly. This trust was created by late Shri Girish Prasad by will dated 15 -8 -1972, registered on 3 -4 -1973. After making the will, but before registration, the settler died on 22 -1 -1973. But the Trust was to take effect from the date of his death. The Trust was for Charitable purposes. There is no dispute that but for clause (d) in the will, the other provisions were considered by the ITO as charitable in character. However, with regard to clause (d) in the will which provided that 1/4th of the property shall be utilised for the help of the deserving members of the family and for their studies and shall also be utilized for the marriages of the girls of the family, was interpreted by the ITO as the powers reserved by the settler for the trustees for application of the Trust money for non -charitable purposes. On 8 -9 -1980, the beneficiaries of the Trust had executed a deed of renunciation whereby they relinquished all their beneficial rights, title and interest in the will and it was provided that such interest of the beneficiaries could also be utilized by the trustees for charitable purposes mentioned in the will.

(3.) The Income Tax officer observed that the amendment in the deed was without any authority provided in the original will and as such, not applicable, in view of the judgments cited by him including that of madras High Court in the case of CIT v/s. : [1977]110ITR364(Mad) . According to him, if any change was to be made in the original objects of the Trust, the provisions of Civil Procedure Code in this regard should have been availed of. His other objection was that the renunciation deed having been made on 8 -9 -1980 could not be made retrospective in operation and applied for the asst. year 1975 -76 and according to him, the matter must be decided upon the deed and the position, which existed during the relevant year.