Sabyasachi Mukharji, J. - (1.) In this reference under Section 256(1) of the I.T. Act, 1961, the following question has been referred to this court : " Whether, on the facts and in the circumstances of the case, and on the proper interpretation of the trust deed the Tribunal was justified in holding that the said trust is a revocable trust ? "
(2.) The assessment year involved is 1970-71. The assessee is one Mrs. Leela Nath, who had executed a deed of trust on 25th September, 1958. As the question involved in this case mainly depends on the construction of the trust deed, it would be relevant to refer to the said deed in a little detail. In the recital of the said deed, the names of the trustees were mentioned as the assessee herself, her husband and one Sri Wazir Chand for their lives. In the recital the settlor recited as follows: "This indenture made this twenty-fifth day of September, 1958, by Mrs. Leela Nath, wife of Mr. Mahendra Nath, resident of 2, Robinson Street, Calcutta (hereinafter referred to as the founder), of the one part and (I) Mr. Wazir Chand, son of Mr. Dalpat Raj Bajaj residing at Qr. No. 5, Block 13, Govindnagar, Kanpur, (2) Mr. Mahendra Nath, son of Dr. Kedar Nath, resident of 2, Robinson Street, Calcutta of the other part. Whereas the founder, above named, is desirous of creating a trust for the object set out hereinafter and has requested the persons abovenamed to act along with herself as trustees for the purpose. And Whereas the abovenamed persons, namely, Mr. Wazir Chand and Mr. Mahendra Nath have agreed to serve as trustee. And Whereas the founder has three minor children as described below: (a) Daughter named Nita Nath, aged 12 years. (b) Son named Kamal Nath, aged 11 years. (c) Daughter named Rita Nath, aged 5 years. And Whereas the founder is desirous of making an adequate provision for the education, marriage, setting up in life and other benefits of her minor children named above. And Whereas for the abovenamed purposes she has decided to set apart the movable property described more fully in Schedule as mentioned below for the benefit of her minor children above named (hereinafter collectively referred to as the beneficiaries) on the terms and conditions hereinafter appearing now this indenture witnesseth as follows :... "
(3.) Then, the deed recites that the settlor had handed over the trust property to the trustees for the benefit of the three minor children, viz., (1) Nita Nath, (2) Kamal Nath and (3) Rita Nath, as mentioned in the trust deed, to be utilised and dealt with in accordance with the terms of the trust. Clause 4 stipulates that the property of the trust shall be the said movable property described in Schedule "A" and the " accumulation on such income or accretion thereof or additions thereto by further contribution or otherwise ". Next clause provided that the founder or any other trustees or any other person interested in the welfare of the beneficiaries shall be entitled to make further contributions to this trust and for the benefit of the aforesaid beneficiaries and all such contributions when received and accepted by the founder or the trustees for the time being shall become an integral part of the corpus of the trust and should be dealt with as if they were part of the property originally included in the trust. Clause 6 provided that the beneficiaries mentioned in the said deed should be entitled to the property forming the subject-matter of the trust in "equal shares". Incidentally, Clause 7, we may mention, was inadvertently not printed in the paper book and we have allowed the assessee to produce before us, a typed copy of the 7th clause to be prepared, with the consent of the parties, which provided merely that the founder, along with one Mr. Wazir Chand and the husband of the founder or settlor, Mr. M. Nath, should be the sole trustees during their lifetime of the property of the trust. Clause 8 of the said trust provided that the trustees for the time being should be entitled to " invest the property of the trust in such manner as they in their absolute and uncontrolled discretion may consider proper and shall not be subject to any restrictions as described in the Trusts Act, 1882, or any other law pertaining to trustees during their lifetime, for the property of the trust". Clauses 9, 10, 11, 12 & 13 of the said deed provided as follows : " 9. Without prejudice to the general powers of investment set out in the preceding paragraph, the trustees for the time being may at their absolute discretion, sell, exchange, dispose of or otherwise deal with any part of the trust property and invest the said property and/or the sale proceeds thereof in any other securities, shares, debentures, bank deposits, loans to companies, private parties or firms or in acquiring any movable or immovable properties or in mortgage or pledge or hypothecation of property and goods or in any business venture or otherwise. The trustees for the time being shall also be entitled to invest and utilise the property of the trust or any part thereof in any business or undertaking carried on by themselves in the name of the trust alone or in partnership with any other person, firm or company or in any other business, in spite of the fact that any one or more of the trustees are interested directly or indirectly in such business. The trustees for the time being may spend the income of the trust or any part thereof or a part of the accumulations on such income for the maintenance, education, marriage or set up in life of the aforesaid beneficiaries or any of them. 10. The trustees for the time being shall be at liberty to give to any beneficiary any part or whole of his or her share in the property of the trust at any time after he or she has attained the age of twenty-one years, but shall be under no obligation to do so unless the beneficiaries concerned have attained the age of forty years. 11. Upon any of the beneficiaries reaching the age of forty years or earlier at the discretion the trustees for the time being after such beneficiary has attained the age of twenty-one years, his or her interest in corpus of the trust property shall be ascertained, handed over or transferred to him or her, as the case may be, and whereupon the trust shall to that extent stand dissolved and the responsibilities as trustee in that behalf. 12. If any of the beneficiaries unfortunately dies before his or her interest in the corpus of the trust has been ascertained and handed over to him or her in accordance with the provisions in paragraphs 10 and 11 above, the right and interest of the deceased beneficiaries shall pass to his minor children, if any, at the time of death and such children shall be deemed to be beneficiaries in his or her place to the extent of his or her right or interest as mentioned above, provided, however, that if any such beneficiary dies leaving no children his or her interest in the corpus of the trust at the time of his or her death shall pass to the surviving beneficiaries. 13. That after at least two beneficiaries have attained the age of eighteen years (18 yrs.) the trustees may extend the scope of objects of the trust and add to the number of beneficiaries in such manner as they think fit, provided, however, that alterations in this behalf shall be made on a unanimous decision of the trustees and with the consent in writing of all the major beneficiaries and of the guardian of the minor beneficiaries, if any.";