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Save as aforesaid, a gift cannot be revoked.
Nothing contained in this section shall be deemed to affect the rights of transferees for consideration without notice."
7.1 In view of the above provisions of the TP Act, the gift can be revoked if the donor and donee agree with, on the happening of any specified event. particularly which does not depend on the will of the donor, a gift can be revoked. The gift can also be revoked if it is a contract as envisaged in the provisions of section 126 of the TP Act which clearly states that "Save as aforesaid, a gift cannot be revoked." A gift is a transfer of property and when an absolute gift is made, subject to a condition restricting alienation, the condition would be void. A gift may be subject to the condition precedent under section 27, and there is no transfer and no gift unless and until the condition is fulfilled. Revocation under the first paragraph of this depends upon the donor and the donee at the time of acceptance agreeing to a condition subsequent which puts an end to the gift. The condition must be made at the time, the donor cannot impose such a condition after the gift is absolute. And furthermore such a condition must be expressed. In the absence of such condition the donor has no power for revocation. In view of the provisions of section 126 of the TP Act, the condition cannot depend upon the will of the donor and a gift revocable at pleasure is no gift at all. This provision provides only two conditions where a gift can be revoked and which are as under:
(a) When the donor and donee have agreed that on the happening of a specified event (not depending upon the will of the donor) the gift should be suspended or revoked.
(b) A gift may also be revoked in any of the cases (save want or failure of consideration) in which if it were a contract, it might be revoked, e.g., when the gift is made with undue influence, coercion, fraud or misrepresentation.
But in the present case in hand, it is very clear that there is no such condition in the gift for revocation or impossibility. It is also clear from the gift deed that the donor has not imposed any condition which puts an end to the gift. The condition must be made at the time of gift and the donor cannot impose such condition after the gift is absolute. In the absence of such condition, the donor has no power for revocation of the gift.
7.2. Now I have drawn my strength on conditional gift from Halsbury's Laws of England, 3rd Edn., Vol. 18, p. 389 which is as follows :
"Gifts may be made subject to conditions either precedent or subsequent. A condition precedent is one to be performed before the gift takes effect. A condition subsequent is one to be performed after the gift had taken effect, and, if the condition is unfulfilled, will put an end to the gift; but, if a condition subsequent is void, the gift remains good. If the words of the condition are capable of being construed either as a condition precedent or as a condition subsequent but the words of the written instrument point to the inference that the donors intended the condition to be subsequent rather than precedent, the court will hold the condition to be subsequent."
11. As regards second question relating to cancellation of gift deeds, learned JM has held that there was no provision relating to cancellation or revocation of gift. Gift Tax Act is silent on this. JM also analyzed provisions of section 126 of TP Act. He held that in the original gift deeds, the donor did not lay any condition and gifts were unconditional, therefore the provisions of section 126 did not apply. The donor reserved no power of revocation and, therefore, cancellation deeds were invalid. On account of above, the learned JM set aside the order of the CGT(A) and restored the order of the assessing officer in his proposed order.