COMMISSIONER OF INCOME TAX Vs. SUDHIR KUMAR LAHA

JUDGEMENT

(1.) This is a reference under Section 66(1) of the Act the question referred being-

(2.) The facts are as follows : One Joggeswar Laha by his will dated December 22, 1920 appointed his wife Nrityakali Dassi, his nephew Anath Krishna Laha and one Radha Kanto Paul as executrix, executors and trustees of his will. He bequeathed his business solely to his said nephew and devised and dedicated rights in his properties both movable and immovable and all the rest and residue of his estate including the outstandings of his business to various religious and charitable trusts. He further directed thereby that his executrix, executors and trustees should stand possessed of all his properties both movable and immovable upon trust to collect all his assets and spend Rs. 5,000/- for the purpose of his Adyashradha ceremony and the sum of Rs. 2500/-for the similar ceremony of his wife and erect three temples on premises Nos. 11/2 and 11/3, Baburam Ghose Lane at a cost of not less than Rs. 25,000/-. The said executrix, executors and trustees were to consecrate and establish according to Hindu rights and ceremonies Sree Kali Thakurani and two Siva Lingas in the said three temples at a cost of Rs. 5,000/- out of the trust fund in their hands. He also appointed his wife and his nephew Anath Krishna Laha and the survior of them to be the Shebaits for the purposes of all religious ceremonies and charitable acts mentioned in his will. The executrix, executors and trustees were to realise all rents and profits of his properties and to pay repair charges of the same out of the trust funds and perform or cause to be performed the daily periodical worship of the three thakurs to be established and consecrated. The will contains a list of ceremonies and charitable acts to be performed by the trustees, as also the expenses to be incurred in connection therewith. He further directed that after the death of the two Shebaits already mentioned Sudhir Kumar Laha and Manindra Kumar Laha, sons of his nephew Beney Krishto Laha and the survivor of them were to be the shebaits and after their death the nearest male members of his family should be the Shebaits. The executrix, executors and trustees were to be at liberty to sell a certain property in the district of 24 Parganas and after meeting all the payments mentioned the were to invest the sale proceeds either in the purchase of profitable immovable properties or in Government or other approved securities. There was a further direction that the executrix, executors and trustees should invest the surplus income in any manner that might appear to them gate and proper and devote the income thereof for the purpose of other religious and charitable acts as they would think fit.

(3.) Probate of the will was taken out on March 19, 1921. The Tribunal found that the administration of the estate was complete at or about the time relevant to the assessment year 1947-48. In response to a notice under Section 34(1) (a) Anath Krishna Laha filed a return as executor for the assessment year 1949-50 showing an income of Rs. 1610/-. He claimed that the income from the estate should be taxed individually in the hands of the deities only and should not be treated as income taxable in the hands of the trustees. The assessment was made under Section 23(3) read with Section 34(1)(a) and Section 41 of the Income-tax Act on Anath Krishna Lalta as trustee. The assessee's appeal to the Appellate Assistant Commissioner was not successful. After going into the question elaborately the Appellate Assistant Commissioner held that directions under the will having been carried out the assessee was holding the properties as trustee. In his appeal to the Tribunal the assessee contended that notice under Section 34(1) (a) having been issued to the executrix, executors and trustees was not in proper form as the notice had to specify the particular character which assessee held at the relevant time. The reasoning of the Tribunal was as follows: