1. This is a reference under Section 256(1) of the I.T. Act, 1961. The statement of the case relates to the assessment years 1962-63 to 1964-65 and 1966-67. The relevant accounting years are calendar years 1961, 1962, 1963 and 1965 respectively.
2. The assessee was the owner of a building being premises 6, Dr. Kartick Bose Lane, Calcutta. On October 6, 1959, by a deed (hereinafter referred to as the 'debutter trust deed') the assessee transferred lot ' A ' of this property to his wife, Smt. Durga Sundari Dey, as the trustee of the three deities mentioned therein and upon trusts specified therein. It, inter alia, provides that after meeting the expenses speci6ed therein out of the income of the debutter property, if there remains any unspent balance of the income, such balance shall be paid to the shebaits as her or their remuneration in equal shares for looking after the worship and for doing the acts and deeds mentioned therein.
3. On the same date the assessee also executed another deed (hereinafter referred to as the 'family trust deed'), transferring lot 'B' of this property to his wife as the sole trustee for the purposes mentioned therein. This deed, inter alia, provides that the trustee shall collect the rents of lot 'B' of this property and out of such collections, after meeting the expenses mentioned therein, shall appropriate the balance of the income during her lifetime as the sole trustee and after her death the balance of the income shall be appropriated by her male heirs :
The aforesaid two deeds also provide as follows : 'During the lifetime of the settlor he shall be competent to ask for accounts from the trustees and shebait and also remove any trustee and shebait and appoint a new trustee or trustees or shebait or shebaits in his or her place and stead. The settlor also hereby reserves his right to add to and/or alter and/or modify the terras and conditions of this trust deed and also the terms and conditions under which the trustee or trustees or shebait or shebaits would hold the trust property.'
4. The ITO assessed the income of both the lots of the aforesaid property in the hands of the assessee. The assessee filed appeals. The AAC held that the debuttar trust was a revocable trust and its income was assessable in the hands of the assessee. The assessee conceded before him that the income from the family trust was liable to be included in his hands. Accordingly, the AAC dismissed the appeals.
5. The assessee filed further appeals and also made applications before the Tribunal under Rule 29 of the Appellate Tribunal Rules, 1963, for admitting two documents both dated 15th February, 1974, described as 'deeds of rectification' of the aforesaid two deeds of trust. The Tribunal rejected those applications on the grounds that those documents were not inexistence in the relevant years and that the assessee was not entitled to change the facts and circumstances as they existed in the relevant years.
6. It was thereafter argued on behalf of the assessee before the Tribunal that the aforesaid trusts were irrevocable. The Tribunal rejected the contention and held that they were revocable trusts. It also held that their income was liable to be assessed in the hands of the assessee. In that view of the matter, the Tribunal dismissed the appeals and thereafter referred the following questions to this court :
'1, Whether, on the facts and in the circumstances of the case, and on a proper construction of the two trust deeds both dated October 6, 1959, could it be held that the trusts so created were 'revocable trusts'
2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in refusing permission to rely on the supplemental (rectification) deeds both of which were executed, on February 15, 1974, subsequent to the orders passed by the Income-tax Officer as well as the Appellate Assistant Commissioner of Income-tax ?'
7. We decline to answer question No. 1 so far as it relates to the family trust deed since it has not been pressed before us on behalf of the assessee.
8. It has been rightly conceded before us on behalf of the assessee that by removing the trustee and shebait and by appointing himself as the sole trustee and shebait and by altering the provisions relating to the remuneration of the trustee or trustees the assessee could divert the income of the debutter trust property directly to himself in view of its provisions already quoted.
9. We accordingly hold that the debutter trust deed provides for a retransfer indirectly of its income to the settlor and as such it is a revocable trust as rightly held by the authorities below. In the premises, we answer question No. 1 so far as it relates to the debutter trust deed, in the affirmative and against the assessee.
10. By drawing our attention to the subsequent documents and Rule 29 of the Appellate Tribunal Rules, 1963, it has been argued before us on behalf of the assessee that the Tribunal should have admitted those documents inasmuch as they were executed subsequently which according to the learned counsel for the assessee is a 'substantial cause' within the meaning of this expression in Rule 29. But there is no merit in this contention.
11. The aforesaid documents were executed after the assessee lost the appeals filed by him before the AAC. These two documents also ex facie show that they were brought into existence with a view to get rid of the orders of the ITO and the AAC by making these two trusts as public andirrevocable trusts with retrospective operation. Accordingly, the Tribunal has rightly held that the assessee was not entitled to change the facts and the circumstances as they existed in the relevant accounting years.
12. That apart, it was not even argued on behalf of the assessee before the Tribunal that there was a substantial cause for admitting the subsequent documents, nor the Tribunal had expressed any opinion on it. Therefore, the aforesaid new plea cannot be mooted before us on behalf of the assessee, because it does not arise out of the order of the Tribunal and it is not even a facet of question No. 2. In the premises, we answer question No. 2 in the affirmative and against the assessee.
13. There will be no order as to costs.
Sudhindra Mohan Guha, J.
14. I agree.