K. A. THANIKKACHALAM, J.

At the instance of the Department, the Tribunal referred the following question for the opinion of this court, for the assessment years 1977-78 and 1978-79 under section 256(1) of the Income-tax Act, 1961

"Whether, on the facts and circumstances of the case, and having regard to the provisions of section 63(a) of the Income-tax Act, 1961, and section 83 of the Indian Trusts Act, the Appellate Tribunal was right in holding that the irrevocability of trusts created by the assessee on October 1, 1969, for the benefit of his prospective son-in-law and daughter-in-law, respectively, was not affected by clause 22 of the settlement deed and that the income of the trusts was not includible in the hands of the assessee ?" *

For the assessment years 1977-78 and 1978-79 the relevant previous years ended on April 12, 1977, and April 12, 1978, respectively. The assessee is an individual deriving income from property, business and share income from a firm called M. K. Krishna Chetty. On October 1, 1969, the assessee settled upon trust for the benefit of his prospective son-in-law and prospective daughter-in-law a sum of Rs. 15, 000 each. In the deeds of settlement executed for this purpose, there was a direction that the amount has to be invested in the discretion of the trustees so as to produce good income and that the income so earned should be accumulated till such time as the daughter and son got married. At that time the daughter was a minor aged about six years. In clause 19 of the trust deed, it was declared that the trust is "irrevocable". Clause 22 of the trust deed provided that

"if the said intended marriage is not solemnised for any unforeseen reason within a period of 20 years from the date of the trust deed, the deed of trust would become void and the trust fund shall become reinvested in the settlor as a beneficial owner thereof, subject as aforesaid, the settlor shall have no manner of right, title or interest in the said money or its accumulations or accretions thereof" *

. By a supplementary deed executed on October 26, 1979, the said clause 22 had been amended to read

"If the said intended marriage were not to be solemnised for any unforeseen reason or reasons within a period of 25 (twenty-five) years from the date of this deed, this deed of trust shall become invested with 'University of Madras' which is an educational institution. The settlor or his legal heirs shall have no right, title or interest whatsoever in the said trust property or its accumulations or accretions thereof." *

Thus in the supplementary deed also it was reiterated that the trust is an irrevocable trust

For the assessment year 1977-78, the assessee filed a return admitting the total income of Rs. 1, 52, 580 in which neither the income from these trusts were shown nor included. The Commissioner of Income-tax, under section 263 of the Income-tax Act, 1961, held that since clause 22 of the trust deed indicated that the settlor would become entitled to the trust property along with the accumulated income in the event of the intended marriage not coming off, the trust had conferred a benefit on the settlor, consequently, the income arising out of the trust should have been held as income arising under a revocable trust and should have been assessed in the hands of the assessee under the provisions of section 61 read with section 63(a)(ii) of the Income-tax Act. Therefore, the Commissioner of Income-tax was of the opinion that the action of the Income-tax Officer in not including the income of the trust was erroneous and prejudicial to the interests of the Revenue. After hearing the objections raised by the assessee, the Commissioner of Income-tax directed the Income-tax Officer to include in the assessment of the assessee the income from the said trusts, viz., M. C. Shyamala Marriage Benefit Trust and M. S. Sowmiyaram Marriage Benefit Trust. Similarly, for the assessment year 1978-79 also the Commissioner of Income-tax