1. only point involved in this appeal pertains to applicability of provisions of section 164 of Income-tax Act, 1961 ('the Act') as they stood at relevant time. 2. assessee is trust and is assessed in status of AOP. assessment year is 1978-79 and relevant previous year ended on 31-3-1978. 3. By deed of settlement dated 27-3-1961, executed between Shri ambalal sarabhai as settlor and Smt. Saraladevi Sarabhai, Gautam Sarabhai and Smt. Leena M. Mangaldas, as trustees, settlor had set apart shares and investments valued at Rs. 1,35,000 in trust. beneficiaries were Shri Vikram Sarabhai (the settlor's son), Bharatidevi Sarabhai, Gira Sarabhai (the settlor's daughters). relevant clauses for deciding point involved in present appeal are reproduced below: "1. trustees shall out of income of trust funds pay in first instance all costs, charges and expenses incidental to administration of trust funds. (i) From and after date hereof and during periods mentioned in this clause trustees may either accumulate net income of trust funds or at their discretion pay same to persons as hereinafter mentioned or to anyone or more of them to exclusion of others or any of them for their, his or her absolute use and benefit, in such proportions and in such proportions and in such manner as trustees may in their absolute discretion think fit, provided however, that whole or any part of net income of trust funds as may not have been distributed by trustees in any year shall at end of year be added to sand held as accretion to capital and form part of corpus of trust funds and shall be dealt with accordingly. (ii) powers and discretions exercisable by trustees under this clause shall be exercise unanimously by trustees and failing unanimity amongst trustees by majority for time being of trustees and in case of difference of opinion chairman of trustees shall have casting vote in addition to his own. unanimous opinion or decision of trustees or majority of trustees, as case may be under this clause shall be final binding and conclusive on all persons concerned and no person shall be to question or challenge such opinion or decision in any court or Tribunal or otherwise howsoever." 4. On 24-1-1976, trustees passed following resolution: "Resolved unanimously that in exercise of the discretion under clause 1 of trust deed, trustees shall pay net income of trust funds accruing or arising during period from 1-4-1976 up to and including 31-2- 2001 to Bharatidevi Sarabhai for his/her absolute use and benefit. Provided however that trustees shall have full power and absolute authority to utilise trust funds or any part thereof for absolute benefit of said Bharatidevi Sarabhai at any time or times from 1-4-1976. Provided further that trustees shall subject to interest of said Bharatidevi Sarabhai in net income of trust funds as has not been utilised by them in manner aforesaid, for such person or persons including said Bharatidevi Sarabhai for such object or objects, purpose or purposes either absolutely or in trust or trusts and upon such terms and conditions including grant of further power to appoint as said Bharatidevi Sarabhai may be deed or deeds appoint at any time before 27-9- 1978 without transgressing provisions of sections 13 and 14 of Transfer of Property Act. Provided further that if trustees have exercised their power and utilised any portion of trust funds for absolute benefit of said Bharatidevi Sarabhai, power or appointment will operate in relation to balance trust funds only. Provided further that trustees shall have full power and absolute authority to direct that power of appointment exercised by said Bharatidevi Sarabhai shall come into operation at any earlier date before 1st April, and thereupon interest of said Bharatidevi Sarabhai in net income of trust funds shall cease and trustees shall act accordingly." 5. On 25-1-1976, Smt. Bharatidevi Sarabhai, one of beneficiaries, was informed about aforesaid resolution in following manner: "I enclose for your information copy of resolution dated 24-1-1976 passed by trustees exercising discretion in regard to distribution of corpus of trust funds in terms of clause 1 of trust deed." 6. On aforesaid facts, assessee filed its return of income for year under consideration declaring total income at nil as, according to assessee, net surplus income of Rs. 14,577 was to be included in total income of beneficiary, Smt. Bharatidevi Sarabhai, and assessment should be framed as contemplated under section 161 of Act. assessee took up stand that since beneficiary was known and her share was determinate, provisions of section 164 , as they stood at relevant time, would not be attracted. ITO, however, for reasons stated in his order, came to conclusion that 'the trust has all characteristics of discretionary trust and as such liable to be taxed under section 164' . He, therefore, assessed t h e income in hands of assessee at flat rate of 65 per cent as provided in section 164. In appeal, following his appellate order in case of Smt. Gira Sarabhai (G-12) D-Trust [IT Appeal No. 948 (Ahd.) of 1982 dated 24- 4-1984] wherein similar point had arisen AAC upheld action of ITO. 7. Being aggrieved by order of AAC, assessee has come up in appeal before Tribunal. At outset, learned counsel for assessee placed before Tribunal. At outset, learned counsel for assessee placed before Tribunal its consolidated order in cases of Smt. Sarabhai (B-16) D-Trust and Smt. Gira Sarabhai (G-12) D-Trust [IT Appeal Nos. 1439 (Ahd.) of 1982 dated 24-4-1984] and pointed out that following its order in case of Smt. Saraladevi Sarabhai (B-11) D-Trust [IT Appeal No. 1437 (Ahd.) of 2982 dated 26-4-1984] wherein similar point had come up before it, Tribunal was pleased to hold that provisions of section 164 , as they stood at relevant time, would not be applicable. He, therefore, urged that since in deciding appeal in favour of revenue, AAC had followed his appellate order in case of Smt. Gira Sarabhai (G-12) D-Trust (supra) his order in present case should also be reversed. learned counsel for assessee also relied on order of Tribunal in case of Shri Ambalal Sarabhai (H- 5) D-Trust [IT Appeal No. 1029 (Ahd.) of 1982 dated 22-2-1084] wherein Tribunal was pleased to uphold order of same very AAC taking view in favour of assessee. learned representative for department, on other hand, placed copy of order of Tribunal in case of ITO v. Hiren other hand, placed copy of order of Tribunal in case of ITO v. Hiren Kiren Jagruti Hina Trust [1984] 8 ITD 106 (Ahd.) ('Hiren Trust) where in contrary view is taken and urged that in view of conflicting views on issue involved, matter may be referred to Special Bench of Tribunal. 8. After considering submissions made on behalf of revenue as well as perusing various orders of Tribunal (in two of which I was party) I and of view that no useful purpose would be served in accepting request made on behalf of revenue. 9. It may be mentioned that reference application under section 256(1) of Act was made by revenue against order of Tribunal in case of Shri Ambalal Sarabhai (H-5) D-Trust (supra) and Tribunal has declined to refer questions to Hon'ble High Court, vide its order dated 22-2-1984 in reference Application No. 726 (Ahd,) of 1983 in following manner: "10. It would appear from above that Tribunal gave its decision not only on appreciation of facts and circumstances obtaining in case but also took notice of amendment made in relevant provisions of Act, by finance (No. 2) Act, 1980. Tribunal has found that there was lacuna in relevant provisions of Act, which was plugged by amendment made by Finance (No. 2) Act, 1980. In this view of matter, questions sought to be raised are of academic interest only. We, therefore, decline to draw up statement of case and refer aforesaid questions of Hon'ble High Court as desired by revenue." Further, in case of Hiren Kiren Jagruti Hina Trust (supra), Tribunal has observed as under: "13. Reference to notes on clauses to Finance (No. 2) Bill, 1980, and clause (ii) to Explanation 1 to section 164(1) , also does not advance assessee's case further. We are not laying down in present case any general proposition to effect that discretionary trust could never be made into non-discretionary one by act of trustees or author of trust or by exercise of specific power given to trustees by trust deed. We have confined our observations to facts of present case and held on their basis that present trust was discretionary trust to begin with and no power has been given to trustees to make it non-discretionary one and to determine beneficiaries and their shares in violation of clause 8 of will. trust, therefore, in our opinion, continues to be governed by provisions of section 164(1) and most charitable view that we can take of resolution dated 9- 11-1977 is to relate to date of distribution, i.e., last date of Samvat year 2034, as ordanied by clause 8 of will." Thus, it would be clear from above that in aforesaid case, Tribunal had restricted its decision on facts of case and had not laid down any general proposition on point involved in present appeal. Apart from this, it may be mentioned that facts obtaining in case of Hiren Kiren Jagruti Hina Trust (supra) are clearly distinguishable on more than one count. There, trust was created under will and, therefore, while giving its decision Tribunal was influenced by wishes of deceased. Again, trustees, in their resolution, had specified shares of beneficiaries for year under consideration only while in instant case, it is not so. Further, in para 9 of its order in case of Smt. Saraladevi Sarabhai (B- 11) D-Trust (supra), Tribunal has noted that in case of Hiren Kiren Jagruti Hina Trust (supra) it had framed two questions but had not considered 'whether some of beneficiaries would have been precluded from consideration by passing resolution. In view of above, I requested learned representative for department to make his submissions. 10. Apart from heavily relying on order of Tribunal in case of Hiren Kiren Jagruti Hina Trust (supra), learned representative for department submitted that in deciding point involved in present case, we should not take judicial notice of subsequent amendment made in section 164 , by Finance (No. 2) Act, 1980, which came into effect from 1-4-1080. In n y event, according to learned representative for department, amendment made in said section was clarificatory in nature. He further submitted that it is only for settlor or author of trust to make changes in deed of trust and trustees had no power to change provisions of deed of trust. He further submitted that trustees have no say in apportionment of income of trust before it is earned any they have to administer income, as provided in deed of trust. Only after it is earned. Thereafter, he referred to section 4 of Indian Trusts act, 1882, and urged that since by passing resolution on 24-1-1976, trustees had exploited loopholes in section 164 as they stood during relevant time, such act of trustees was not lawful and, therefore, trust was void in law. In this connection, he invited my attention to pages 121 and 362 of Commentary on Indian Trusts Act, 1972 edn. by Shri I. V. Rangacharya. He therefore, urged that action of income-tax authorities should be upheld. 11. learned counsel for the, in his reply invited my attention to Finance Minister's speech, notes on clauses of Finance (No. 2) Bill, 1980, as well as paras 48 to 50 of memorandum explaining provisions of said Bill and highlighted fact that amendment brought in section 164 , was with view of plug loopholes for tax avoidance through medium of private trust. Under these circumstances, it is not worth-arguing that Tribunal should not take judicial notice of said amendment. On contrary, learned counsel for assessee went on submit that it is by now trite law that in interpreting provisions of law, why and for what purposes amendment was proposed and what was effect of such amendment. As regards reference to Indian Trusts Act made on behalf of revenue, learned for assessee invited my attention to following extracts of order of Tribunal in case of Hiren Kiren Jagruti Hina Trust (supra): "15. before we close, we may point out that contentions of learned department representative based on section 4 of Indian Trusts Act are, according to us, wholly misconceived. That action concerns itself with validity of trust and not with validity of action of trustees. latter has to be examined, not in light of section 4 of Indian trusts Act but provisions of trust deed." (p. 120) and submitted that he has nothing further to add. 12. I have carefully considered rival submissions of parties as well as perused orders of Tribunal placed before me and I find considerable force in submission made on behalf of assessee. I may mention that I was party to orders of Tribunal in case of Shri Ambalal Sarabhai (H-5) D-Trust (supra) and Hiren Kiren Jagruti Hina Trust (supra). On first blush, it may appear that decision taken in these two cases are at variance. However, further carefully going through order of Tribunal in case of Hiren Kiren Jagruti Hina Trust (supra), as mentioned above, I find that facts obtaining in that case are not in all force with facts obtaining in present case. Further in case of Hiren Kiren Jagruti Hina Trust (supra), Tribunal has clearly held that it is not laying down any general proposition which could be applicable in all cases having certain similarity with facts and circumstances obtaining in that particular case. Under circumstances, I am of view that said order of Tribunal would not have any binding effect in deciding present appeal. However, discussion contained therein would have great persuasive value in deciding point involved in present appeal. I would have dwelt upon this point at some length but for fact that in case of Smt. Saraladevi Sarabhai (B-11) D-Trust (supra), Division Bench of Tribunal itself had occasion to consider its order in case of Hiren Kiren Jagruti Hina Trust (supra). I have gone through said order of Tribunal in case Smt. Saraladevi Sarabhai (B-11) D-Trust (supra) and I fully concur with conclusion arrived at by it to effect that its order in case of Hiren Trust would not be applicable on facts and circumstances obtaining in case of Smt. Saraladevi Sarabhai (B-11) D-Trust (supra). In this view of matter, following order of Tribunal in case of Smt. Saraladevi Sarabhai (B-11) D-Trust (supra), assessee must succeed in present appeal. 13. However, since both parties had advanced arguments on amendment made in section 164 as well as provisions of Indian Trusts Act, I would now deal with same. 14. It is now well settled principle of interpretation that in construing provisions of statute, it would be relevant to refer to speech made by mover of Bill as well as everything which is logically relevant in construing provision of stature - K. P. Varghese v. ITO [1981] 131 ITR 597 (SC) and Sole Trustee, Loka Shikshana Trust v. CIT [1975] 101 ITR 234 (SC). Therefore, Sole Trustee, Loka Shikshana Trust v. CIT [1975] 101 ITR 234 (SC). Therefore, I am not inclined to accede to submission made on behalf of revenue that in deciding point at issue I should not refer to subsequent amendments made in provisions of section 164. While placing budget proposal for year 1980-81 as well as Finance (No. 2) Bill, Hon'ble Finance Minister made following observation in his budged speech regarding private discretionary trusts: "Hon'ble Members will recall that Government had in 1970 taken several measures to prevent use of private discretionary trusts as device for tax avoidance. Experience, however, shows that these measures have not been fully effective and proliferation of such trusts has not been curbed to desired extent. I, therefore, propose to tighten provisions in respect of private trusts. At present, discretionary trusts are taxed at flat rate of 65 per cent of their income and 1.5 per cent of their wealth, or at rates applicable in case of individual, whichever is higher. Under my proposal, such trusts will be charged to income-tax at maximum marginal rate and to wealth-tax at flat rate of 3 per cent or at appropriate rate applicable in case of individual, whichever is higher. I also propose to make several other provisions in relation to taxation of private trusts with view of plugging some loopholes which have come to notice of Government. All these provisions will take effect from current assessment year." - [1980] 123 ITR (St.) 18 relevant notes on clauses of Finance (No. 2) Bill reads as under: "Sub-clause (c) seeks to insert two new Explanations in sub-section (3) of section 164. Under Explanation 1, any income in respect of which persons mentioned in section 160(1) (ii) and (iv) are liable as representative assessee or any part thereof will be deemed as not being specifically receivable on behalf or for benefit of any one person unless person on whose behalf or for whose benefit such income or such part thereof is receivable during previous year is expressly mentioned in order of Court or instrument of trust or wakf deed. Further, individual shares of beneficiaries are expressly stated in order of Court or instrument of trust or wakf deed and are ascertainable on date of such order, instrument or deed. New Explanation 2 defines expression 'maximum marginal rate' to mean rate of income-tax including surcharge, if any, applicable to highest slab of income of association of persons as specified in Finance Act of relevant year. These amendments will take effect from 1st April, 1980 and will accordingly apply in relation to assessment year 1980-81, and subsequent years." - [1980] 123 ITR (St.) 131. Paragraph 48 of 51 of memorandum explaining provisions in Finance (No. 2) Bill, deal with amendment proposed in section 164. relevant extract from these paras are reproduced below:- "48. Measures to plug loopholes for tax avoidance through medium of private trusts. - Under section 164 of Income-tax Act, income received by trustees of discretionary trust is chargeable to Income-tax at flat rate of 65 per cent or rate which would be applicable if such income were total income of association of persons, whichever course is more beneficial to revenue..." 49. Experience has, however, shown that provisions of section 164 have not been fully effective in curbing use of private trusts for avoiding proper tax liability. It is according proposed to make following amendments in section 164 with view to curbing tax avoidance through medium of such trusts:- ** ** ** (iv) Under existing provisions, flat rate of 65 per cent is not applicable where beneficiaries and their shares are known in previous year, although such beneficiaries or their shares have not been specified in relevant instrument of trust, order of Court of wakf deed. This provision has been misused in some cases by giving discretion to trustees to decide allocation of income every year and in other ways. In such situation, trustees and beneficiaries are able to manipulate arrangements in such trustees and beneficiaries are able to manipulate arrangements in such manner that discretionary trust is converted into specific trust whenever it suits them tax-wise. In order to prevent such manipulation, it is proposed to provide that unless beneficiaries and their shares are expressly stated in order of Court or instrument of trust of wakf deed, as case may be, and are ascertainable as such on date of such order, instrument or deed, trust will be regarded as discretionary trust and assessed accordingly... ** ** ** 50. These amendments will take effect from 1st April, 1980, and will accordingly apply in relation to assessment year 1980-81, and subsequent years." - (1980) 123 ITR (St.) 158. Central Board of Direct Taxes vide its Circular No. 281 dated 22-9- 1980 [see TAXMANn's Direct Taxes Circulars, Vol. 2, 1985 edn. p. 828] had clarified scope and effect of various amendments made in Act by Finance (No. 2) Act. Regarding amendment made in section 164 in heading reads as 'Measures to plug loopholes for tax avoidance through medium of private trust.' For our purpose, it would be suffice to refer to item (4) of para 30.3, which reads as under: "(4) Under provisions as they existed prior to amendments made by t h e Finance Act. flat rate of 65 per cent was not applicable where beneficiaries and their shares are known in previous year although such beneficiaries or their shares have not been have not been specified in relevant instrument of trust, order of Court of wakf deed. This provision was misused in some cases by giving discretion to trustees to decide allocation of income every year and in several other ways. In such situation, trustees and beneficiaries were able to manipulate arrangements in such manner that discretionary trust was converted into specific trust whenever it suited them tax-wise. In order to prevent such manipulation, Finance Act has inserted Explanation 1 in section 164 provide as under: a. Any income in respect of which Court of Wards, Administrator- General, official trustee, receiver, manager, trustee or mutawalli appointed under wakf deed is liable as representative assessee or any part thereof shall be regarded as not being specifically receivable on behalf or for behalf of any one person unless person on whose behalf or for whose benefit such income or such part thereof is receivable during previous year is expressly stated in order of Court or instrument of trust or wakf deed as case may be, and is identifiable as such on date of such order, instrument or deed. For this purpose, it is not necessary that beneficiary in relevant previous year should be actually named in order of Court or instrument of trust or wakf deed on date of such order, instrument deed. b. individual shares of persons on whose behalf or for whose benefit such income or part thereof is receivable will be regarded as indeterminate or unknown unless individual shares of such persons are expressly stated in order of Court or instrument of trust or wakf deed, as case may be, and are ascertainable as such on date of such order, instrument or deed. As result of insertion of above Explanation, trust under which discretion is given to trustee to decide allocation of income every year or right is given to beneficiary to exercise option to receive income or not each year will all be regarded as discretionary trusts and assessed accordingly." (p. 858) Paragraph 30.4. of said circular reads as under: "30.4. aforesaid amendments to section 164 come into force with effect from 1st April, 1980 and will, accordingly, apply in relation to assessment yea 1980-81 and subsequent years. It may be specifically noted that new provisions will apply in respect of all discretionary trusts whether created before or on or after 1st April, 1980." (p. 859) 15. On reading of aforesaid material, it cannot be denied that prior to 1-4-1980, trustees could have allocated income of trust to one or more beneficiaries at their discretion. In instant case, prior to amendment made in section 164 by Finance (No. 2) Act, trustees had passed resolution dated 24-1-1976 by which they had resolved that income of trust in question would be given to only one beneficiary, viz.. Smt. Bharatidevi Sarabhai. Not only this, but trustees had addressed letter dated 25-1-1976 to Smt. Bharatidevi Sarabhai informing her about resolution passed by them that income of trust in question would be allocated to her only. In other words, s reading deed of settlement dated 27-3-1961 along with resolution dated 24-1-1976 and communication dated 25-1-1976, it cannot be held otherwise than that only beneficiary under said deed of settlement would be Smt. Bharatidevi Sarabhai. In other words, discretionary trust became specific trust as not only beneficiary was known but her share was also determined. Under these circumstances, it is difficult to uphold orders of income-tax authorities treating assessee as discretionary trust and applying provisions of section 164 to it. 16. I may be mentioned that in deciding appeal in case of Hiren Kiren Jagruti Hina Trust (supra), even though Tribunal's attention was invited t o notes on clauses to Finance (No. 2) Act, without dwelling much thereon, Tribunal simply observed that 1reference to notes on clauses... also does not advance assessee's case further'. Tribunal, however, decided appeal in favour of revenue in that case mainly on ground that trustees were required to distribute income on last date of relevant previous year. In doing so, Tribunal did not consider it necessary to deal with other submissions made on ground of latter amendment of section. 17. Tribunal, in its order in case of Smt. Saraladevi Sarabhai (B- 11) D-Trust (supra), has dealt with at length amendment brought in section 164 by Finance (No. 2) Act, with which I fully concur. Further, in case of Shri Ambalal Sarabhai (H-5) D-Trust (supra), Tribunal, in its order (to which I was party), had considered these various aspects and decided appeal in favour of assessee in following manner: "9. We have carefully considered rival submissions of parties as well as material placed before us and we find considerable force in submissions made on behalf of assessee. If we were to read provisions of deed of trust alone, then, perhaps revenue would succeed in view of decision in case of Lady Ratanbai Mathurdas (supra). However, it is not possible for anybody to ignore resolution passed on 31-3-1974 and intimation dated 1-4-1974 (reproduced above). These two documents have substantially changed provisions of clause (1) (i) (a) of deed of trust. That trustees have power to make amendments in deed of trust cannot be doubted in view of provisions of clause (1) (i) (a) and (i) (v) (reproduced above). In our opinion, AAC has rightly considered these two documents in deciding appeal in favour of assessee. Further, in view of Explanation given by Govt. at time of introduction of Finance (No. 2) Bill 1980 (123 ITR 158 we are not prepared to accede to submissions made on behalf of revenue that amendments made by Finance (No. 2) Act, 1980 were clarificatory in nature. We have, therefore, no hesitation in upholding order of AAC under appeal." 18. Following aforesaid orders of Tribunal in cases of Smt. Saraladevi Sarabhai (B-11) D-Trust and Shri Ambalal Sarabhai (H-5) D-Trust, I am of view that income-tax authorities were not justified in invoking provisions of section 164 , as they stood at relevant time. 19. As regards arguments made on behalf of revenue vis-a-vis provisions of Indian Trusts Act, it is difficult to comprehend same. It is nobody's case that assessee-trust has come into existence in violation of provisions of Indian Trusts Act. Under deed of settlement trustees have been given certain powers in respect of distribution of income of corpus of trust. Again, these powers are not violating any provisions of Indian Trusts Act. Further, it is trite law that assessee may arrange his affairs in such way so as to minimise tax burden. Surely, minimising tax burden with four corners of law cannot be equated with any unlawful purpose making trust void under Indian Trusts act. In this view of matter. I do not find any substance in submissions made on behalf of revenue vis-a-vis provisions of Indian Trusts Act. 20. For reasons stated above, I set aside orders of Income-tax authorities and restore case once more to file of ITO with direction to frame assessment afresh accepting assessee's contention that no income is taxable in its hunds. 21. In result, appeal is allowed. *** AMBALAL SARABHAI D. TRUST NO. 5 v. INCOME TAX OFFICER