1978 (4) TMI 3 - HC - Income Tax

Summary

Issues:
1. Whether the trusts created by the deeds were revocable trusts?
2. Whether the Tribunal was right in refusing to admit supplemental deeds executed after the orders by the Income-tax Officer and the Appellate Assistant Commissioner of Income-tax?

Analysis:

Issue 1:
The case involved a reference under s. 256(1) of the I.T. Act, 1961, concerning assessment years 1962-63 to 1964-65 and 1966-67. The assessee transferred properties to trusts for deities and family members. The Income Tax Officer (ITO) assessed the income in the hands of the assessee, considering the trusts as revocable. The assessee appealed, but the Appellate Assistant Commissioner (AAC) upheld the assessment. The Tribunal also deemed the trusts revocable and dismissed the appeals. The High Court held that the debutter trust deed allowed for retransfer of income to the settlor, making it revocable, affirming the Tribunal's decision.

Issue 2:
The assessee sought to rely on supplemental deeds executed after losing appeals before the AAC. The Tribunal refused admission, noting the documents aimed to alter past orders retrospectively. The High Court agreed with the Tribunal, stating that the documents were created post-appeals and did not present a substantial cause for admission. As the Tribunal did not address substantial cause and the assessee did not argue it, the High Court held the new plea inadmissible, answering the second question against the assessee.

In conclusion, the High Court affirmed the revocability of the debutter trust deed and upheld the Tribunal's decision to reject the supplemental deeds, emphasizing that altering facts post-appeals was impermissible. The judgment provided a comprehensive analysis of the issues raised under the Income Tax Act, 1961, and highlighted the significance of trust structures and post-appeal document submissions in tax assessments.