JUDGMENT - CHAGLA C. J. :

It is sufficient to state only those facts which are necessary for the disposal of this reference. The assessees are trustees under a scheme framed by the District Court, Ahmedabad, and as such trustees they carry on the business of a dispensary and the business made profits in the relevant assessment years. As trustees they also are possessed of certain property which fetches income and they are also the registered owners of shares which bring in dividend income. The question that arises is whether it is obligatory upon the Department to tax them with regard to these different kinds of income under Ss. 9, 10 and 12 read with S. 41 of the Income-tax Act on it is open to the Department to contend that at its option it could tax the trustees under Ss. 9, 10 and 12 without regard to the provisions of S. 41.

(2) Now, in order to answer this question, we must first look at the scheme of the Act. The charging section, as has been so often pointed out, is S. 3 of the Act. Chapter III and Ss. 6 to 12 deal with computation of income. That chapter lays down various provisions which have to be applied with regard to different kinds of income which have got to be grouped under the different heads indicated in S. 6, and the three heads with which we are concerned here are the head which falls under S. 9 "Income from Property", income which falls under the head of "Business income" under S. 10, and lastly the income from "Other Sources" dealt with in S. 12. Section 41 falls under Chapter V which deals with "Liability in special cases" and S. 41 deals with trustees who are entitled to receive on behalf of any person income, and in the case of these trustees who fall under S. 41 it is provided that tax shall be levied upon and recoverable from such trustees "in the like manner and to the same amount as it would be leviable upon and recoverable from the person on whose behalf such income, profits or gains are receivable". Now it will be noticed that this section deals with levy and recovery of tax, S. 8 having charged a particular income to tax and Ss. 6 to 12 having dealt with computation of income. Section 41 deals with the liability to pay tax and the person from whom the tax is to be recovered. It should also be noticed that S. 41 imposes a vicarious liability upon the trustees and that liability is co-extensive with the liability of the beneficiaries. In other words, the Legislature, in the special case of trustees, has provided that instead of the tax being recovered from the beneficiaries to whom in law the income belongs and who ordinarily would be liable to pay the tax, it should in this particular case be recovered from the trustees. But the Legislature has made it clear that the liability of the trustees should not in any case be larger or wider than the liability of the beneficiaries. It will also be noticed that S. 41 is mandatory in its language. Therefore, if a person makes the return of his income as a trustee, the assessment upon his income would be in accordance with the provisions laid down in Chapter III of the Act, but his liability to pay tax as a trustee must be determined according to S. 41. Now there is no dispute here that the assessees have been assessed to tax as trustees and the contention of the Department is that it is open to them to ignore the provisions of S. 41 and proceed to tax the trustees in the same way as they would proceed to tax any assessee who is not fulfilling the character of a trustee. In other words, the contention of the Department is that, if a trustee is the owner of a property or he is carrying on business or he is the owner of shares, his income could be computed in accordance with Ss. 9, 10 and 12 and he could be made to pay tax without observing the special provisions laid down in S. 41 with regard to the liability of trustees. Now, in the first place, S. 41

gives no such option to the taxing Department. If the assessment is upon a trustee, the tax has to be levied

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