LALLUDAS CHILDREN TRUST Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) In the case of the assessee which claims status of a valid trust in the name of Shri Lalludas Children Trust, for the assessment year 1978-79, the following question of law has been referred under section 256 (1) of the Income tax Act, 1961 :

(2.) For answering the above question posed, a few facts need be stated as under: The assessing officer for the assessment year 1978-79 passed an order of assessment under section 143 (3) of the Act describing the same to be "protective assessment" holding that the assessee is not a valid trust as it is found to be against rule of perpetuity. The income claimed by the assessee as a trust was distributed amongst the beneficiaries.

(3.) Aggrieved by the assessment order, the trust went up in appeal to the Commissioner of Income tax (appeals). The appellate authority vide order dated 17.11.1983 held that the appeal at the instance of the trust is not maintainable under section 246 (1) (c) of the Act (as was the provision at the relevant time). The reasoning of the Tribunal is that as on the basis of order of protective assessment, the assessing officer has not held the trust to be liable for payment of any tax, the trust cannot be said to be an aggrieved assessee.