- (1.) BY a deed dated June 22, 1930, the appellant was appointed the Mutwalli of a Wakf Estate by one Md. Ibrahim Barry, since deceased. By an earlier deed dated February 5, 1927, the said Md. Ibrahim Barry had dedicated two properties, namely, premises No. 11, Lindsay Street, Calcutta and No. 8, Kanai Seal Street, Calcutta, as Wakf properties. Besides the properties mentioned above, which were dedicated as Wakf, and of which the appellant is the Mutwalli, the appellant is the owner of certain other properties. In January 1937, the said Md. Ibrahim Barry died. Under the said deed of Wakf, the appellant and his sons and daughters are the beneficiaries. The gross income of the Wakf estate is alleged to be Rs. 34,000/- per year. For the income tax assessment years 1958-59, 1959-60 and 1960-61, the income derived from the said personal properties of the appellant, was lumped together with the income derived from the Wakf Estate, and the appellant was assessed as an individual on the said aggregate income. The appellant preferred an appeal from the order of assessment to the Appellate Assistant Commissioner, who by his order dated December 29, 1962, directed that the appellant should be taxed separately in respect of the income arising from the said Wakf Estate. By the said order a further direction was given that Rs. 19,676/-, Rs. 20,670/- and Rs. 21,564/-shoud be excluded from the appellant's individual assessment for the assessment years 1958-59, 1959-60 and 1960-61 respectively the income of the Wakf Estate for those years. Pursuant to this direction of the Appellate Assistant commissioner separate assessments were made under S. 23 (3) of the Income tax Act, (hereinafter referred to as the Act) for the income arising from the Wakf Estate and notices of demand under S. 29 of the Act for the years, 1958-59, 1959-60, 1960-61 and 1961-62 had been issued to the appellant. For the assessment year 1958-59, the income from the Wakf Estate was assessed as "wakf Estate of the late Ibrahim Barry through Mutwalli Shaik Md. Shaffi Barry", in the status of association of persons. The tax was computed at the maximum rate under the first proviso to S. 41 (1) of the Act on the ground that the shares of the beneficiaries under the Wakf were not determinate. Being aggrieved by this assessment order the appellant has preferred an appeal to the Appellate Assistant commissioner, which is pending. For the assessment years 1959-60, 1960-61 and 1961-62. also the tax was computed at the maximum rate. But while for the assessment year 1958-59, it was stated in the assessment order that it was made under S. 23 (3) and S. 41 (1) of the Act, in the assessment orders for the years 1959-60, 1960-61 and 1961-62 there is no reference to S. 41 (1) of the Act. But it is mentioned that the assessments were made under S. 23 (3) of the Act, and the tax was again levied at the maximum rate. The appellant felt aggrieved by the computation of the tax at the maximum rate for the said three assessment years, and instead of preferring an appeal, as he had done in case of the assessment for the year 1958-59, he moved this Court under Art. 226 of the Constitution and obtained a rule nisi. This rule was discharged by Banerjee, J. , by a judgment and order dated July 7, 1964, and this appeal is directed against this judgment and order.
(2.) MR. I. P. Mukherjee, learned counsel for the appellant, contended that in the assessment orders for the years 1959-60, 1960-61 and 1961-62 there was an error of law apparent on the face of the records and, therefore, this Court had jurisdiction to quash the said orders by issuing appropriate writs and orders. He referred to the assessment order for the year 1958-59, which is to be found at pages 100-102 of the Paper Book, and submitted that the appellant was assessed as an association of persons consisting of the appellant himself and his sons and daughters. The total income of the Wakf properties was taken to be Rs. 19,676/-, as directed by the order of the Appellate Assistant Commissioner dated December 29, 1962. He submitted that in this order it was held that the shares of the beneficiaries under the Wakf deed were not determinate.
(3.) ON this basis the tax was calculated at the maximum rate and the maximum rate prescribed by the Finance act, 1960, was 25 per cent. Mr. Mukherjee next argued that in regard to the assessments for the years 1959-60, 1960-61 and 1961-62 which are the subject-matter of this appeal, the Income Tax Officer firstly failed to indicate in the order that the assessments were made under S. 41 (1) of the Act as he should have done, and he also failed to hold that the beneficiaries under the Wakf Estate were an indeterminate class of persons. It was argued that it was only after it was held that the beneficiaries were not determinate, that the tax could be computed at the maximum rate of 25 per cent. There was nothing in the assessment orders to indicate that the Income Tax Officer came to the conclusion that the beneficiaries were an indeterminate class of persons and that being so, tax at the maximum rate could not be computed, but having been so computed, there was an error of law, apparent on the face of the records. Mr. Mukherjee further argued that the authority to compute the tax at the maximum rate was derived from the first proviso to S. 41 (1) of the Act and in order to invoke and apply this proviso, the taxing authority must hold that the beneficiaries were an indeterminate class of persons. Without holding that the beneficiaries are an indeterminate class of persons, the maximum rate could not be applied.;