The main legal point established in the judgment is that payments made by executors as per directions of the will out of the income of the estate are assessable in the hands of the executors. The judgment also affirms the wide scope of reassessment under s. 34, allowing for reassessment for any reason, including mistakes of law.

1. THE payments in question were payments which the executors and trustees--the present applicants--were directed by the will to make to certain persons named. THE payments were either payments of moneys gradually or by annuities, and they were in each case by the will itself directed to be made "out of the income of my property". That clearly indicates that they were payments which could only be made out of the income which the executors and trustees received. What has been charged to tax here has been the income which reached the assessees, namely, the executors and trustees.--Raja Bejoy Singh Dudhuria vs. CIT (1933) 1 ITR 135 (PC) : TC38R.627 applied PER NASIM ALI, J (AGREEING AND SUPPLEMENTING) It was argued that this sum cannot be treated as part of the income of the executors as by the will it has been diverted from the estate to some other persons owing to their being payable by way of annuities. If this view is correct then all the expenses paid by the executors out of the income, in accordance with the terms of the will, would be exempt from taxation. In that case the money which is payable by the executors to themselves as trustees of beneficiary out of the income would also be exempt from taxation. Conclusion Amounts paid by executors as per directions of will out of income of estate is not diversion of income but assessable in the hands of executors. Reassessment under s. 34 of 1922 Act--Escapement of income--Amount considered by ITO at the time of assessment and allowed as deduction--Deduction was wrongly allowed--It was thus a case of escapement of income within the meaning of s. 34--ITO had the power to take action under s. 34 and re-assess the income--Sec. 34 is not confined to cases of non-inclusion of income in the return Held PER DERBYSHIRE, C.J. THE statute says that if for any reason income has escaped assessment in any year, the ITO may, within one year of the end of that year do certain things with a view to assessing or reassessing that income. Clearly the sum of Rs. 29,492 was not assessed. It was not assessed because the ITO made a mistake in 1933 which he attempted to put right in January, 1935. It is impossible to say, having regard to the plain words of the statute, that that income of Rs. 39,492 did not escape assessment in the year in question.--CIT vs. D.R. Naik (1939) 7 ITR 362 (Bom) : TC51R.522 relied on. PER NASIM ALI, J. THE assessee's contention was that s. 34 contemplates only cases where the income has escaped assessment by reason of its being not included in the return. But the words in the section are "for any reason". THEse words are very wide. THE non-inclusion of the income in the return may be one of these reasons, mistake of law may be another reason. THEre is nothing in the section to restrict the operation of the section only to cases of non-inclusion of the income in the return.--Sir Rajendranath Mukerjee vs. CIT (1934) 2 ITR 71 (PC) : TC51R.455 explained. Conclusion Deduction wrongly allowed at the time of original assessment, it was a case of escapement of income within the meaning of s. 34. Counsel appeared Dr. R.B. Pal and R.C. Pal, for the Revenue : B. Bagchi and S.C. Ghosh, for the Petitioner DERBYSHIRE, C.J.: One Ramanath Ghosh died in 1904 and left a will by which he appointed certain relatives of his as executors and trustees and directed that after his death certain expenses should be met from the income of the estate. He also directed that certain other expenses should be met, but he did not specify whether they should be met from the corpus of the estate or from the income. His eldest son, Siddheswar Ghosh, took out administration of the estate and was administrator until he died intestate in 1930. THEreafter his brother, Akshoy Kumar Ghosh, who was the youngest and sole surviving son of Ramanath Ghosh, took out probate of his father's will and remained executor of the estate until his death in October 1931. Akshoy Kumar Ghosh left a will dated August, 1931,