Judgment

BHARUCHA, J.:- An interesting question arises in these appeals. It is this; has the Revenue an option to assess and recover tax from either the trustees or the beneficiaries of a discretionary trust when the income thereof is distributed and received by the beneficiaries in the accounting year? The appeals have been heard together and may be disposed of by a common judgment, taking, as illustrative, the facts of the lead appeal (Civil Appeal No. 2145 of 1978, CIT, Gujarat, Ahmedabad v. Mrs. Kamalini Khatau).

2. The relevant Assessment Year is 1969-70, the previous year being the calendar year 1968. The assessee was the beneficiary of 9 trusts. In respect of three of these she was the sole beneficiary, and there is no dispute about their income. In regard to the other six trusts, the assessee was one of the beneficiaries thereunder. In each of these six trust deeds the clause relevant for our purpose read thus :

"From and after the date hereof (i.e., the date of the Trust Deed) and during the periods mentioned in this clause, the Trustees may either accumulate the net income of the Trust or at their discretion pay the same to the persons as mentioned therein or to any one or m