LexTHE COMMISSIONER OF INCOME-TAX BOMBAY versus MANILAL DHANJI, BOMBAY
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IHI v. n. o.g..i l;iMiqdl w ...... C.. L". w.-..w.J. J-.,Jl. 902 SUPRll:ME COURT REPORTS [1002] SUPP. '!'.here oa.n therefore be no escape from the concJu. BJOn tha.t the Act plainly intends that where the Representative Union appears in any proceeding under the Act even though that proceeding might have commenced by an employee under s. 42 (4) of the Act, the Representative Union alone can represent the employee and the employee oa.nnot '.l.ppear or act in such proceeding. . . In this view o.f t~e mattn the appeal must tail and Is hereby d1sm1ssed. In the circumstances we pa.as no order as to costs. Appe.al dismiB&ed. THE COMMISSIONER OF INCOME-TAX BOMBAY v. l\IANILAL DHANJI, BOMBAY (S.K. DAs, M. liIDAYATULLAH and J.C. SHAH, JJ.) Income Tax-Trmt crealed in favour of minor child-No benefit =ruing to ™nor in acwunting yoar-Whelher incomt from tnul la:etJbl< a.< i~ of a.<llUM~-Triut by aut.18tea fatMr- Aaae&U directed to iue it1COme for benefit of him8df, Ma wife and cAi/dron-Whtther income tazabl< a.< i•come of aaauaee-lndian lnconit·W Act 1922 (XI of 1922) as. 16(3) 41(1)-·Indian T"'81JJ Act, 1882 (11of1882) •· 8. In 1953 the assessee created a trust in 1espect of a sum of money and provided that the interest on that amount was to be accumulated and added to the corpus and that his minor daughter C was to rettive the income from the corpu1 increased by the addition of interest when she attained the age of 18 years. In the relevant account year, when C was 1tlll a minor the income derived from the trust fund was Rs. 410 Earll.,; in 1941, the as1e1ace's father had created a tru1t in respect of =tain shares and money directing the trustees to pay the net intercat "':'d income ther"."f to the assessee "for the maintenance of hunself and h11 wife and for the malnten• ance education and bcneflt of all his children till his death". In the relevant account year a sum of Rs. 14, 170 accrued as income in the hands of the asscssee from the said trust funds, 2 S.C.R. SUPREMl.<"1 COURT REPORTS ll03 The taxing authorities included both these incomes in the total income of the assessee. Held, that neither of these two incomes could be included in the total income of the assessee. Under s. 16(3)(b) of the Indian Income-tax Act, upon which the authorities relied, the assessec could only be taxed on the income from the trust funds for the benefit of his minor child if in the year of account the minor child either received the income or it accrued to her or she had a beneficial interest in the income in the relevant year of account. In the present case though there was income in the hands of the trustees and they were liable to pay tax thereon, there was no benefit to the minor child in that year. As such the sum of Rs. 410 did not form part of the total income of the assessee. The trust deed of 1941 created two trusts, the one requiring the trustees to pay the income from the trust funds to the assessee and the second requiring the assessec to spend the income for the maintenance of himself and his wife and for the maintenance, education and benefit of his children. It was not a case where the settler merely expressed a·wish or desire or hope but he gave as direction which created a trust in respect of the income in the hands of the assessec in favour of himself, his wife and children. The assessee did not create the second trust in respect of the beneficial interest which he held under the trust of I 941 and s. 8 of the Indian Trusts Act which forbade the creating of such a trust was inapplicable. The assessee was a trustee and not the sole beneficiary; and since the shares of the beneficiaries were Indeterminate it was open to the Department to levy and recover tax at the maxi- mum rate from the assessee as trustee under the first proviso to s.41(1} but the Department was not entitled to include the sum of Rs. 14,170 in the total income of the assesse as though he was the sole beneficiary under the trust deed. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 323of196. Appeal from the judgment a.lld order dated September 25, 1958, of the Bombay High Court in I.T.R. No. 3 of 1958. K. N. Rajagopal Sastri and D. Gupta, for the appellant. I R. J. Kolah, J. B. Dadachanji, O. 0. Mathur and Ravinder Narain, for the respondent. 1962. January 31. Th~ Judgment of the Court was delivered by Tiu Ccmmissi•.,, •/ 111&oine-tax, BmN.1 v. Ji 1nil.J Dlion
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