COMMISSIONER OF WEALTH TAX Vs. GANGADHAR SIKARIA

JUDGEMENT

(1.) WE propose to dispose of these applications under Section 27(3) of the W.T. Act, 1957, by a common order, with the concurrence of the learned counsel for the parties; they involve common questions of law and facts and are off-shoots of a common order passed by the Income-tax Appellate Tribunal rejecting the reference applications under Section 27(1) of the W.T. Act, 1957, thereby refusing to state the cases and refer the questions of law said to have arisen out of the order passed by it. The petitioner claims a reference of the following "questions of law" to this High Court, for its decision : Questions of law :

(2.) BESIDES the said property, the joint family owned a building at Gauhati as well. Subsequently by a registered deed dated April 19, 1964, the major members of the said joint family settled a trust under the name and style of "Gangadhar Sikaria Family Trust", ("the trust" for short), for the benefit of Srimathi Sita Devi Sikaria, wife of the karta, Bhagwati Prasad Sikaria, major son of the karta and three minor sons of the karta, namely, (a) Santosh Kumar Sikaria, (b) Ramautar Sikaria, and (c) Ashok Kumar Sikaria and also for the benefit of the sons of the karta to be born thereafter, equally in their individual capacities. In the course of income-tax assessment for the assessment year 1965-66, the ITO held that the trust was invalid, inter alia, on the grounds that there had been no partition in the HUF, so it was not open to the karta and other members of the HUF to alienate the properties of the joint family and to settle in trust, and the trust was not a valid trust under the Indian Trusts Act, 1882. The ITO took the same view in the income-tax assessment proceedings of the trust, not only for the assessment year 1965-66 but also for the subsequent assessment years.

(3.) THEREAFTER, the matter was taken by the Revenue to the Tribunal who dismissed the appeals by a common order dated June 20, 1980. The, Tribunal held that in its previous orders dated March 7, 1976, in I.T.A. Nos, 235 and 236 (Gau) of 1974-75, relating to the assessment years 1965-66 and 1966-67 and again by an order dated September 5, 1977, in I.T.A. Nos. 633, 634 and 635 (Gau) of 1976-77, relating to the assessment years 1973-74 to 1975-76 and also in I.T.A. No. 123 (Gau) of 1978-79, relating to the assessment year 1975-76, it had held that the trust was valid and the income arising out of the trust property could not be added to the income of the HUF, the present assessee. Those were proceedings under the I.T. Act. In short, the learned Tribunal held that it had earlier decided in the income-tax appeals of the trust that the trust deed was valid, the trust was a legal entity liable to pay tax and the present HUF could not be saddled with the tax liabilities of the trust. The Tribunal also held that the matters were "sub judice" before the Gauhati High Court in pending references.