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4. Now, part of the income and benefit is derived by the settlor by the trust deed. The settlor has been given the right of residence and maintenance as well as 1/7th of the net income of the trust property for his maintenance.

5. Under Section 63 of the I.T. Act, 1961, a transfer is deemed to be revocable if it contains any provision for the retransfer, directly or indirecty, of the whole or any part of the income or assets to the transferor. In this respect Section 63 is significantly different from the provisions of the proviso of Section 16(1)(c) of the Indian I.T. Act, 1922. This aspect has been noticed by the Supreme Court in the case of Hrishikesh Ganguly v. CIT [1971] 82 ITR 160, where the Supreme Court was construing the provisions of Section 16(1)(c) of the I.T. Act, 1922, and noted at page 165 of the report the difference of this section with Section 63 of the Act. The trust was created on the 18th May, 1972. Therefore, the question whether it was a valid trust or whether it was a revocable trust and the consequence of such revocable trust apply to the income of the trust property became relevant only for the assessment year 1973-74. The ITO in the assessment order for the assessment year 1973-74 has categorically found that this is a revocable trust In respect of the assessment of Shri Narayan Prosad Chowdhury. About what else he has found in the said assessment order there is some dispute and I shall refer to the relevant portion of the assessment order to deal with the contentions connected therewith. But it is indisputable that it has been held that it was a revocable trust by the said assessment order. The next question, however, is, even if it is a revocable trust what is the position of the liability of persons in respect of income included in the income of another person that has been specifically provided for in Section 65 of the I.T. Act, 1961, which provides as follows :

7. Counsel for the petitioners in this application contended, firstly, that this was not a revocable trust in any event. He urged that the right of residence reserved for the settlor in a portion of the settled property was not a benefit which could come within the mischief of Section 63 of the I.T. Act, 1961, which could have made the settlement a revocable trust. He submitted that there were certain authorities of other High Courts where it has been so held. Speaking for myself, I should have thought that reservation of such a right might be construed as one which brings it within the mischief of Section 63 of the Act. But, for the purpose of this application, it is not necessary for me to decide that question and I do not intend to express any final opinion on this aspect. There is, however, no doubt that there has been reservation of some income as set out in Clause (5) of the trust deed as indicated before for the benefit of the settlor which can be called to contain a provision of retransfer of a part of the income to the transferor in terms of Sub-clause (i) of Clause (a) of Section 63 of the I.T. Act, 1961. But counsel for the petitioners further contended that in view of the proviso to Clause (ii) of Section 62(1) of the I.T. Act, 1961, read with Section 61 of the said Act, even such benefit or reservation of the part of the income would not make the trust revocable. He tried to draw support for this contention from certain observations of the Supreme Court in the case of CIT v. Rani Bhuwaneshwari Kuer [1964] 53 ITR 195, at page 203.

8. Though I have again, in my mind, no doubt that reservation of the part of income in the manner done under Clause (5) of the present trust deed has provision for transfer of the assets transferred by the settlor and as such brings the said settlement within the mischief of Section 63 of the Act, I do not propose to rest my decision on this finding, lest the appeal, which is pending before the AAC, filed by the petitioner, as a result of the notice served under Section 156 of the I.T. Act, 1961, is in any way prejudiced. But for the purpose of this application in view of the finding made by the ITO in his assessment order for the year 1973-74, which has not yet been set aside or modified by any appropriate authority, prima facie, I must proceed on the basis that this was a revocable trust. If the trust created or purported to be created by the document dated 18th May, 1972, was a revocable trust the steps taken by the revenue to realise the arrear dues of Narayan Prosad Chowdhury were legal in view of the relevant provisions of the Act from this aspect of the matter. It appears from a letter, which I direct to be kept on record of this court, which was produced before me during the hearing of this application, dated 27th December, 1978, that the following amounts were outstanding from Shri Narayan Prosad Chowdhury on his account:

10. On behalf of the revenue, it was contended relying on certain statements in the affidavit-in-opposition of one Shri Brojendralal Mazumdar that the trust in question was fraudulent and had been created to defraud the creditors including the revenue to whom large sums of money were due. On the other hand, counsel for the petitioner, drew my attention to the averments made in sub-para. (F) of para. 4 of the said affidavit wherein it has been stated that the notices under Section 226(3) of the I.T. Act, 1961, have been issued treating the trust as a revocable trust. It was submitted on behalf of the petitioners and not without some justification that a trust which has been treated as a revocable trust cannot be, at the same breath, called a void trust because a void trust is a trust which is non-existent in the eye of law. It was further the case of the petitioners that the assessment order had not been proceeded on the basis that the trust was a void one. On the contrary, the assessment order for the assessment year 1973-74 proceeds on the basis that the trust was a revocable trust as it reserved part of the income directly or indirectly to the settlor. I had directed the revenue to produce the assessment order which was done and a copy of the assessment order has been filed before me and given to the petitioner. I direct that the said copy be kept on record of this court. In the said assessment order, the ITO has observed, inter alia, as follows :