SARAH CHERIAN TRUST Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner is a trust assessed under the Income-tax Act, 1961. For the assessment year 1974-75, the original assessment was completed under Section 143(1) of the Act. Subsequently, a notice dated July 26, 1978, was issued under Section 148, to reassess the income for the year. THE income is alleged to have escaped assessment because of the claim for exemption under Section 11, which has been allowed. By exhibit P-1 assessment order dated December 19, 1978, the Income-tax Officer held that income received by the trust cannot be stated to be received specifically on behalf of or for the benefit of any one person in terms of the provisions made in Section 164(1) of the Act. THE claim for deduction under Section 80C was also found not eligible. THE total income was fixed as 65%.

(2.) AGGRIEVED by the order of assessment, the petitioner preferred a revision before the Commissioner. It was contended that the reopening was bad in law because no order of assessment was seen issued. The petitioner also claimed exemption on the ground that it was a charitable institution. The assessee further contended that the trust deed dated March 24, 1969, properly excluded the application of Section 164 of the Act. The Commissioner, by exhibit P-3 order, confirmed the action of the Income-tax Officer. The challenge in the writ petition is directed against exhibit P-3 confirming exhibit P-1.

(3.) THE assessment for the year 1975-76 has been concluded by exhibit P-5 order of the Tribunal. THE finding of the Appellate Tribunal regarding status has become final. For the year 1979-80, the petitioner was completely exempted from tax. Exhibits P-1 and P-3 are barred by res judicata. On these grounds, the petitioner has prayed for quashing exhibits P-1 and P-3 and for issuing a writ prohibiting the respondents from treating the petitioner as a discretionary trust and for consequential reliefs.