Law: Wealth Tax Act, 1957

Section: 21

Income-tax---Representative assessee---Assessment---Trustee---Finding by Tribunal in wealth tax assessment that shares of beneficiaries were definite and determinate and that beneficiaries had already been assessed---Trustees could not be assessed. The assessee was a trust. While passing the assessment orders for the assessment years 1981-82 and 1982-83, 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. On appeal, the Appellate Assistant Commissioner found that this question regarding shares of the beneficiaries had been considered by the Tribunal in the wealth tax appeal for the assessment year 1975-76 filed by the trust. The Tribunal had found that the shares of the beneficiaries were specific and certain. As a consequence, the Appellate Assistant Commissioner held that there could not be any assessment on the assessee itself at the maximum marginal rate. It was further found that the beneficiaries had already been assessed and, therefore, it was not open to the Income-tax Officer to assess the trustees again. The Tribunal sustained-the order of the Appellate Assistant Commissioner On a reference: Held, that there was a category finding by the Appellate Assistant Commissioner and the Tribunal as to the nature of the trust. The Tribunal had also found that the shares of the beneficiaries were determinate and certain. The concurrent finding of the Appellate Assistant Commissioner and the Tribunal was that the beneficiaries of the trust had already been assessed. Such assessment could not be said to be on a wrong person. The trustees could not be assessed again. CIT v. David Joseph (Dr.) (1995) 214 ITR 658 (Ker.) and ITO v. Atchaiah (Ch.) (1996) 218 ITR 239 (SC) ref. JUDGMENT P. A. MOHAMMED, J.---The questions of law referred to us for our decision in these reference cases are following: "Whether, on the facts and in the circumstances of the case--- (i) the Tribunal is right in holding that the Appellate Assistant Commissioner was justified in directing vacation of the assessments'? (ii) the beneficiaries are known and their shares determinate?…

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