Sabyasachi Murharji, J. - (1.) This reference relates to the assessment year 1971-72. The question with which we are concerned in this reference is, whether the proviso to Section 164(1) of the I.T. Act, 1961, which was introduced by the Finance Act of 1970, with effect from 1st April, 1971, would be applicable in assessing the present trust.
(2.) The assessee is a trust. The trust was created by a declaration made on the 9th of December, 1964, by the four sons of Keshrichand Khaitan (deceased) settling upon trust of Rs. 5,000 contributed by each of the four settlors with the object of the benefit and use of the heirs, successors and children of the settlors and for their and each of their education, training and vocational pursuits and for their general well being. The objects of the trust were, inter alia, according to the trust deed, as follows : " (a) To meet and defray the costs and expenses of education of the male and female members of the family of the settlors descending in the male line from Seth Keshri Chand Khaitan since deceased including their male and female children already born on the date of these presents, and to be born hereinafter until the trust comes to an end as hereinafter provided. (b) Education in the foregoing clause means and shall mean education of the male and female members of the family of the settlors as stated above in all spheres and of every kind and description, including inter alia, primary, secondary, higher secondary, undergraduate, post graduate, technical, medical, legal, engineering, accountancy, fine arts, pure arts or pure science and mixed arts and science and in the different branches thereof, and research works in any and every field and sphere of education. (c) Without prejudice to the generality of the foregoing clauses, to meet and defray the costs and expenses for text and other necessary books and equipments, school and college tuition fees, tuition fees for private coaching at home or elsewhere, conveyance charges including costs and expenses for sending eligible candidates from amongst the beneficiaries to foreign countries for higher education. (d) In addition to the foregoing objects and purposes the trustees will also be justified in expending the income of the said trust fund to meet and defray the maintenance, medical expenses and similar necessaries of any and every member of the family of the settlors male as well as female descending in the male as well as in the female line from the said Keshri Chand Khaitan. Provided also that during the lifetime of the settlors in the application of the said income the trustees shall have regard to the wishes of the settlors who shall also be entitled to direct if they so desire that the income for the time being of the trust funds or any part thereof may be applied to such matter or objects of education or otherwise as the said settlors shall direct and in such case the trustees shall so apply the income. "
(3.) The Trust deed contains Clause 25 which provides as follows : " Upon the attainment of majority of the last child to be born to any of the beneficiaries hereinbefore named being the descendant of the settlors in the male or female line alive on the date of these presents trust shall come to an end and the trust property then in existence shall vest absolutely in the male descendants of the settlors in the male line already born at that time in equal shares. ";