1996 (7) TMI 76

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....olding that 'it was not possible for the Income-tax Officer to assess again the trustee' ? " The above questions of law were referred to us at the instance of the Commissioner of Income-tax, Trivandrum. The assessee in these cases is a trust. The assessment years involved in these references are 1981-82 and 1982-83. While passing the assessment orders for the aforesaid years, the Income-tax Officer took the view that the beneficiaries under the trust and their shares were indeterminate and, therefore, the trust should be assessed directly. Being aggrieved by the aforesaid orders, the assessee filed appeals before the Appellate Assistant Commissioner, who while disposing of the appeals found that the question whether the beneficiaries are ....

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....5 (CIT v. Dr. David Joseph [1995] 214 ITR 658). In the aforesaid case, this court found that the Tribunal was right in holding that the assessee-trust cannot be taxed in view of the fact that one of the beneficiaries of the trust had earlier been assessed by the assessment proceedings dated December 31, 1980, in his capacity as beneficiary of the trust. The prime dispute involved in this case is whether the trust in question is a discretionary trust or a specific trust. If the trust is found to be a discretionary trust, the beneficiaries are not entitled to receive income or corpus in definite proportions because it is the discretion of the trustees as to how the shares should be apportioned among the beneficiaries. Once the trust is found....

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....rminate was rejected. By the aforesaid assessment order the trust was assessed in the status of association of persons. We have already found that the trust in question is a specific trust. That means it is not a discretionary trust. That being the position, we do not find any error in the order passed by the Tribunal. Learned standing counsel for the Revenue, however, contended, relying on the decision of the Supreme Court in ITO v. Ch. Atchaiah [1996] 218 ITR 239, that the Income-tax Officer has no option either to assess an association of persons or its members individually under the present Act, though such option was available under the 1922 Act. Therefore, " he can, and he must, tax the right person and the right person alone. By 'ri....