- (1.) This application is by Nawal Kishore Chowdhury and Smt. Chanda Devi Choudhury who claim to be the trustees under a deed of trust dated 18th March, 1972. In this application under Article 226 of the Constitution, the petitioners challenge the notice under Section 226(3) of the I.T. Act, 1961, issued to the various tenants in respect of the erstwhile share of rent of the owner, Shri Narayan Prosad Chowdhury, in premises No. 8/1 A, Little Russel Street, Calcutta. There were several of such notices. Some of these notices have been set out in annex. " P " which are at page 69 onwards of the petition. In order to appreciate the contention urged in this application it would be necessary to set out certain portion of the said notice which was as follows: "A sum of Rs. 78,320 is due from Sri Narayan Prosad Chowdhury, 2/2B, Harrington Street, Cal., on account of income-tax/super-tax/penalty/interest/fine. You are hereby required under Section 226(3) of the Income-tax Act, 1961, to pay to me forthwith any amount due from you to or held by you for or on account of the said Sri Narayan Pd. Chowdhury or trustees as noted in letter dt. 10-11-78 up to the amount of arrears shown above, and also request you to pay any money which may subsequently become due from you to him/them or which you may subsequently hold for or on account of him/them up to the amount of arrears still remaining unpaid forthwith on the money becoming due or being held by you as aforesaid as such payment is required by me as amount due by the taxpayer in respect of arrears of income-tax/super-tax/penalty/interest/fine. I am to say that any payment made by you in compliance with this notice is in law deemed to have been made under the authority of the taxpayer and my receipt will constitute a good and sufficient discharge of your liability to the person to the extent of the amount referred to in the receipt."
(2.) The petitioners also challenge in this application four certificate cases bearing Nos. 177/TR/XIV/71-72/XIII; 826/TR/XIV/72-73/XIII; 260/TR/ XIV/72-73 and 261/TR/XIV/72-73 and all proceedings taken in respect thereof. The petitioners also challenge the notice dated 31st October, 1975, issued under Section 156 of the I.T. Act, 1961, which appear as annex. "K" in page 63 of the present petition. The said notice is important and has been issued to the petitioners as trustees settled by a trust by one Shri Narayan Prosad Chowdhury. The said notice is in the same term as usual in case of notice under Section 156 of the I.T. Act, 1961. The said notice, however, is only in respect of the assessment year 1973-74 and a sum of Rs. 11,455 has been claimed on account of the tax due. It is also necessary to refer to the letter dated 18th December, 1975, which appears at page 68 as annex. "Q" to the petition. The said letter was written by the ITO in reply to the letter written by the petitioners regarding the demand notice under Section 156. The said letter reads as follows : "Please refer to your letter dated 15-11-1975 regarding copy of assessment order of Shri Narayan Prosad Chowdhury for the assessment year 1973-74. The assessment of your alleged trust of which you are a trustee has not been assessed by me for the assessment year 1973-74. If you have filed any return for the trust for the assessment year 1973-74 you are requested to contact Shri S. K. Kar, ITO., 'C' Ward, Dist-II(2), Calcutta, as he has jurisdiction of new case having first alphabet 'N'. In the assessment of Shri Narayan Prosad Chowdury, the settlor of the trust, the income from the trust house property has been assessed in his hands as per income-tax law (the trust has been treated as revocable) and a demand notice has been served on you as trustee under Section 65 of the I.T. Act, 1961. "
(3.) It is the case of the petitioners that by the deed of trust dated 18th May, 1972, a trust was created by one Narayan Prosad Chowdhury of his 35/96ths and l/6th of 61/96 the shares in premises No. 2/2B, Harington Street, Calcutta. The two present petitioners one of whom is the wife of the settlor (sic) which is described in the trust as an irrevocable deed of trust and by Clause (1) it is provided that the said trust has been created for the maintenance, education and marriage and other expenses and benefit of the minor sons and daughters of the settlor as well as for the maintenance of his wife, Smt. Chanda Devi Chowdhury, being one of the trustees and one of the petitioners in this case. By Clause (1) of the said trust the deed provides for " the maintenance and residence of the settlor and his wife, Smt. Chanda Devi Chowdhury". Clause (5) of the said trust deed is important and provides, inter alia, as follows: "(5) That after meeting the expenses mentioned in clause (2) hereof the trustee or trustees shall hold the balance of the net income of the said trust property in seven equal shares, one each of such shares to be held by the trustee or trustees and be appropriated and spent for the maintenance, education, marriage and other expenses and benefits of the said minors, Hemant Kumar Chowdhury, Basant Kumar Chowdhury and Ashok Kumar Chowdhury and the said minor daughters, Kumari Rani and Kumari Renu, and for the maintenance of Smt. Chanda Devi Chowdhury. In the matter of such expenditures the trustee or trustees shall have absolute discretion and his or their decisions in such matters shall be final and binding, if after meeting the aforesaid expenses, there remains any money in the hands of the trustee or trustees the same will form part of the trust under these presents and the trustee or trustees will be entitled to invest the same in such manner and in such securities as the trustee or trustees may in his or their absolute discretion consider proper. The trustee or trustees shall pay to the settlor and his wife one equal seventh part of the net income to each of them during their respective life for their maintenance. ";