Representative assessment of trust income applies where beneficiaries have determinate shares in rent from settled property.

A valid trust deed vested the house properties in the trustees, so the trustee received the income in a representative capacity and fell within the scope of section 41 of the Indian Income-tax Act, 1922. Because each beneficiary had a definite and determinable share in the balance of rent after deductions, the proviso for tax at the maximum rate did not apply. The income therefore had to be assessed in separate sums corresponding to the beneficiaries' respective interests, and not as a single aggregate assessment on the assessee.

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Issues: Whether the income from the house properties settled under the trust deed was assessable in a single sum on the assessee as trustee under section 41 of the Indian Income-tax Act, 1922, or whether the assessment had to be made in separate shares corresponding to the beneficiaries' respective interests.

Analysis: The trust deed was valid and operative and vested ownership of the properties in the trustees. A trustee receives trust income in a representative capacity and is therefore a person entitled to receive income on behalf of beneficiaries within section 41. The section is not confined to cases where tax is directly leviable on the beneficiaries in the same form; it applies to income receivable by trustees on behalf of persons, including income from house property assessable under section 9. The proviso for levy at the maximum rate did not apply because the deed gave each beneficiary a definite and determinable share in the balance of the rents after deductions for rates, taxes and other impositions. The fact that the whole income was not payable to one person did not alter the position, since each portion was specifically receivable on behalf of a particular beneficiary.

Conclusion: The assessment could not be made in a single sum on the assessee in his personal capacity, and if assessed as trustee it had to be made under the substantive part of section 41(1) in separate sums corresponding to the beneficiaries' definite shares. The answer was against the Revenue and in favour of the assessee.

Final Conclusion: The references were answered by holding that the trustees' liability was to be determined under the representative assessment provisions, not by a single aggregate assessment on the assessee.

Ratio Decidendi: Where a valid trust gives beneficiaries determinate shares in income, a trustee receiving that income in a representative capacity is assessable under section 41 on the basis of those specific shares and not at the maximum rate merely because the trust property yields notional house-property income.

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