DR. THOMAS VARGHESE Vs. STATE OF KERALA

JUDGEMENT

(1.) THE prime question involved in this batch of Tax Revision Cases is whether the petitioners are liable to be assessed to Agrl. Income Tax invoking the provisions contained in s.9(2)(a)(i) of the Agrl. IT Act, 1950 (for short the Act). The assessment years involved in all these cases are 1978 -79 and 1979 -80. These Tax Revision Cases have been filed under s. 78 of the Agrl. IT Act, 1991 against the common order passed by the Dy. Commr. of Agrl. IT, Trichur dt. 20th March, 1991 in respect of the aforesaid assessment years.

(2.) THE petitioners in these cases are the trustees of twelve family trusts. Those trusts are : (1) John Paul Daughters Trust, (2) Mary John Family Trust; (3) Leela Philip Family Trust; (4) Susan Varghese Family Trust; (5) Susheela George Family Trust; (6) Sheela Thomas Family Trust; (7) Saju Thomas Daughters Trust; (8) Francis Paul Heirs Trust; (9) Francis Paul Daughters Trust; (10) John Paul Heirs Trust; (11) Francis and John Family Trust and (12) Saju Thomas Heirs Trust. These family trusts were constituted under separate deeds executed on 1st May, 1975. These family trusts own extensive properties, both agricultural and non -agricultural. For the effective management of these properties the terms in the trust deed specifically empowers the respective trusts to enter into partnership or joint ventures or any other arrangement. In terms of the trust deed, two partnerships were constituted, namely, M/s Popular Plantations and Popular Estates. The trust deed provides that the trust could nominate one of its trustees as partner in the firm for and on behalf of the trust.

(3.) FOR the sake of convenience, the facts involved in TRC No. 16 of 1992 are adopted as common for all these cases. The Agrl. ITO, Trichur within whose jurisdiction the aforesaid properties situate assessed the trustees of the trusts for their share of income from trust properties showing the status as individual. Annexure III is the copy of the assessment order passed by the officer dt. 30th March, 1984 for the asst. yr. 1978 -79 describing the name of the assessee as follow : "Dr. Thomas Varghese Trustee, Susan Varghese Family Trust, partner M/s Popular Plantations and Popular Estate, Railway Station Road, Trichur". As per the said order, the share of the petitioners income from M/s Popular Plantations and Popular Estates was added together and the total income was thus accordingly fixed. Thus the petitioner was assessed as representative of the trust, however, showing the status as individual. The agricultural IT payable by the petitioner for the years 1978 -79 and 1979 -80 was thus fixed. The same method of assessment was adopted in the case of all the trustees treating them as representative of the trusts and thus assessed them separately. However, on 8th Nov., 1990 a notice was issued by the Dy. Commr. of Agrl. IT and ST, Trichur proposing to revise the assessments for the years 1978 -79 and 1979 -80 invoking the powers under s. 34 of the Act. Annexure IV is a copy of the notice issued by the Dy. Commr. of Agrl. IT. According to the Dy. Commr. of Agrl. IT, the assessments completed by the Agrl. ITO for the years 1978 -79 and 1979 -80 were found to be incorrect and irregular and, therefore, suo motu proceedings to revise the assessments were initiated.