1973 (1) TMI 4

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....he family. These assets and the income therefrom were credited to an account called " Oor Pothuchelavu Fund Account ". Originally, Annamalai Chettiar, the father, was in charge of the said fund. But, after his death, his son, Vairavan Chettiar, became the trustee of the fund. For the assessment years 1959-60, 1960-61 and 1961-62, the income from the said trust fund in the hands of Vairavan Chettiar was assessed, taking the status as an association of persons, at the ordinary rate of tax. Later, while making the assessment for the subsequent years, the Income-tax Officer became aware of the fact that the said fund constituted a trust in favour of an indeterminate and fluctuating body of persons and, therefore, attracted the proviso to sectio....

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....ection, the Appellate Assistant Commissioner specifically found that the Income-tax Officer became aware of the setting apart of the said assets as a trust at the time of the partition for the benefit of an indeterminate body of persons only after the original assessment has been made and that he had not actually decided the question of the applicability of section 41(1) of the old Act at the stage of the assessment. Therefore, he upheld the jurisdiction of the Income-tax Officer to reopen the assessment under-section 147(b) of the new Act. On the question of the applicability of the proviso to section 41(1) of the old Act, the Appellate Assistant Commissioner held that that fund having been set apart for the marriage expenses of the female....

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....in law ? and (2) Whether, on the facts and in the circumstances of the case, the assessment at the maximum rate of the income from the trust fund for the assessment years 1959-60, 1960-61 and 1961-62 under the provisions of section 41(1) of the Indian Income-tax Act, 1922, was valid in law ? " The learned counsel for the assessee reiterates the same two contentions as were put forward before the Tribunal. One relates to the jurisdiction of the Income-tax Officer to reopen the assessment under section 147(b) of the new Act and the other relates to the applicability of section 41(1) of the old Act to the facts of this case. On the question of jurisdiction, we are of the view that section 147(b) of the new Act is clearly applicable to th....