TaxTMI 
TaxTMI 
1974 (7) TMI 47
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.... executors and trustees to manage the estate and to administer it till the residue was handed over to the beneficiaries mentioned therein. The sources of incom for the estate were property income, interest on securities, dividends and interest from other sources. The original assessment for the assessment year 1957-58 was completed by the Income-tax Officer on 3rd February, 1958, in such manner that he assessed the property income alone in the hands of Bai Savitagouri and the three trustees in the status of " association of persons " and allocated the balance of the income from other sources amongst the beneficiaries. Consequently, tax was demanded in respect of the property income alone from the trustees, whereas in regard to the balance, the beneficiaries were called upon to pay the tax. In appeal, which was preferred by the assessee, the Appellate Assistant Commissioner held that section 41 was attracted inasmuch as the trustees had received the income on behalf of the beneficiaries and he, therefore, directed the Income-tax Officer to tax the entire income derived from the estate of the deceased in the hands of the trustees and to levy tax on them in the like manner and to the ....
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....ustees and executors, which had come to be assessed in the same manner as the income in the hands of the beneficiaries and, not at the rate applicable to the total income, as held by him for the assessment year 1961-62, had escaped proper assessment and he, therefore, reopened the assessment for 1957-58 under section 34(1)(b) of the Income-tax Act after issuing a notice in that behalf on 19th February, 1962. After reopening the assessment in the above manner the Income-tax Officer completed the assessment by levying tax on the entire income from the trust in the hands of the trustees and executors at the rate applicable to the total income. Such assessment for the year, 1957-58 under section 23(3) read with section 34(1)(b) of the Income-tax Act was made on 21st February, 1963. Aggrieved by this assessment, made on 21st February, 1963, the assessee filed an appeal before the Appellate Assistant Commissioner and one of the objections raised in the appeal was that there was no information in possession of the Income-tax Officer in consequence of which he could have come to the conclusion that the income chargeable to tax had escaped assessment or was under-assessed and the reopening ....
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....hargeable to tax had either escaped assessment or had been under-assessed or whether the reopening had been done by the Income-tax Officer merely on the basis of a change of opinion, the opinion which he had formed during the assessment proceedings for the assessment year 1961-62. Mr. Hajarnavis, for the revenue, fairly conceded before us that the will of Maganlal Dahyabhai dated 5th of July, 1943, must have been produced by the assessee before the Income-tax Officer when the original assessment for the year 1957-58 was done by him, for obviously without knowing the contents of the will the separate assessments of the income, namely, assessing the property income alone in the hands of the trustees and executors and allocating the balance of the income from other sources among several beneficiaries named in the assessment order, could never have been done by the Income-tax Officer when he passed his initial assessment order on 3rd of February, 1958. If that be so, it would be reasonable to assume that even clause 9(f), under which life interest created in favour of the sons of the testator was to arise only when the last of the sons attained the age of 21, must have been noticed ....
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....e shall presently indicate. If the will dated 5th of July, 1943, was before the Income-tax Officer when he carried out the assessment for the assessment year 1957-58 Mr. Hajarnavis has fairly conceded that it must have been produced before the Income-tax Officer at that time-not only clause 9(f) of the will would have been present to the mind of that officer, but even the recitals of paragraph 4 must have been known to him, and even a mere glance at the recitals contained in paragraph 4 of the will would have clearly brought to the notice of the Income-tax Officer that the testator had stated that on the date of the will he had 7 children in all (one son and six daughters) and that his son, Jayendrakumar, was, at that time, 8 years of age. In other words, the eldest son who was the only son was 8 years old on the date of the will of 5th July, 1943. Obviously, therefore, any son who may have been born to the testator after the making of the will could never have attained the age of 21 in the accounting year ending 31st January, 1957. It did not require any special enquiries to be conducted by the Income-tax Officer to realise this fact which should become patent to anyone who per....