All these four Departmental appeals involve common question. They are, therefore, disposed of by this single order for sake of convenience. By trust deeds dt 15th Feb., 1980 Shri G. D. Jhawar created trust. According to terms of trust deeds 50per cent of income of trust was to be used for benefit of Miss Rochana Jhawar and Miss Sadhana Jhawar, daughters of Shri Mahendra Kumar Jhawar. This 50per cent of income in each case was to be paid over to father and natural guardian of said minors. other 50per cent of income accruing to trust was to be accumulated for 20 years from date of creation of trust for benefit of these girls and immediately on their marriage 50per cent income of he trust so accumulated was to be handed over to their husbands. It was also provided that if these girls did not marry man acceptable to trustee within period of 20 year from creation of trust or died without having married then accumulated trust fund was to be distributed amongst heirs of these girls excluding settlers. While completing assessment ITO treated trust as discretionary trust because according to him 50per cent of income was to be accumulated for benefit of would be husbands of these girls and according to ITO said husbands were not definite persons. trust were, therefore, formed for benefit of unknown persons who could not be determined at any period of time. They were, therefore, to be treated as discretionary trusts and entire income accruing was ordered to be taxed at maximum rate in hands of trustee. On appeal it was argued on behalf of assessee that 50per cent of trusts income was being credited to accounts of Miss Sabhana jhawar and M i s s Rochana Jhawar for their benefit and only 50per cent was to be accumulated for benefit of their would be husbands. income accruing to them had already been included and taxed in their hands. As regards 50per cent of balance contentions of assessee s representative were - (i) trust was definite trust and not discretionary trust. (ii) income was receivable on behalf of and for benefit of definite persons mentioned in trust deed. (iii) beneficiaries on whose behalf or for whose benefit income was receivable were identifiable as such on date of creation of trust. (iv) individual share of he beneficiaries were sparately stated in deed itself. (v) would be husband of Miss Sadhana Jhawar & Miss Rochana Jhawar cannot be deemed to be person which could not be determined at any length of time. Reliance was placed upon decision of E Bench of Tribunal in I. T. A. No. 1463(Cal) of 1979 decided on 22th Feb., 1980 wherein Tribunal had come to conclusion that even in respect of income accumulating on behalf of other unknown persons if their shares are defined by deed, trust cannot be treated as discretionary trust. Reference was also made to decision of Special Bench of Tribunal in ITA No. 2573 (Cal) of 1979 wherein Tribunal under similar circumstances held that beneficiaries were known and determinate and s. 164 would not apply although in that case only 5per cent of income was payable to Smt. Laxmi Devi Sadani under cl. 3 (b) of trust deed and balance of 95per cent was not specifically receivable on behalf of or for benefit of any one person. After referring to details of order passed by Special Bench AAC was of opinion that action of ITO in present case was not according to law. 50per cent of he income securing to trusts belonged definitely to Miss Sadhana Jhawar and Miss Rochana Jhawar and Department had already taxed same in their hands. As regards balance of 50per cent he was of opinion that maximum rate of tax would not be applicable as there was no uncertainty either about beneficiaries or about he heirs of beneficiaries who were ascertained and definite. He therefore, directed ITO to tax balance 50per cent as normal rates in both these cases. Revenue has come up in second appeals before Tribunal. I have heard representatives of parties at length in all these appeals. main contention of representative of Department was that there has been change in provisions of s. 164 of IT Act by Finance (No. 2) Act of 1980 according to which following Explanation has been inserted w. e. f. 1st April, 1980. "Explanation I- For purpose of this section- (i) any income in respect of which persons mentioned in cl. (iii) and cl. (iv) of sub-s. (1) of s. 160 are liable as representative assessee or any part thereof shall be deemed as being not specifically receivable on behalf or for benefit of any person unless person on whose behalf or for whose benefit such income or such part thereof is receivable during pervious 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; (ii) individual shares of persons on whose behalf or for whose benefit such income or such part thereof is received shall be deemed to be indeterminate or unknown unless individual shares of persons on whose behalf or for whose benefit such income or such part thereof is receivable, 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." contention of assessee s representative was that since in present case income payable to husbands of Miss Sadhana Jhawar and Miss Rochana Jhawar did not fall in first limb of s. 164, i.e. to say any part thereof was not receivable on behalf of or for benefit of any one person, therefore, first clause of newly inserted Explanation has no application to present case. For this purpose reliance was placed upon Special Bench decision of Tribunal in ITO vs. C.L. Sadani Family Trust reported in 1 SOT 484. After carefully considering all facts and circumstances of case I am afraid that I am not inclined to accept assessee s contention. Firstly, first limb of s. 164 deals with case where any income or part thereof is not receivable on behalf of or for benefit of any one person. These words were not properly appreciated by Special Bench which held that first limb would apply. It was mainly for this reason that I had suggested for convening Special Bench inasmuch as decision taken by other Bench of Tribunal in ITA No. 1463 (Cal).79 did not appear to lay down correct law. Special Bench, it appears, has totally lost sight of decision of Calcutta High Court in Nirmala Bala Sarkar vs. CIT (1969) 74 ITR 268 (Cal) and it was in view of that decision that I had referred matter to Special Bench. In that case trustees had been directed to spend certain summons for marriage of settlor s daughters and construction of building. They were further directed to spend similar sums for construction of house for third daughter of settlor to provide for her marriage expenses and maintenance of another daughter. If total procceds exceeded or fall below sum of Rs. 80,000 trustees were to reduce or enhance amount for marriage or construction of house as case may be. Clause (x) further provided that if any amount was left with trustees after providing for daughters of settlor and meeting their marriage expenditure such fund was to be equally divided by trustees between all daughters of settlor then living and cl. (xi) provided that if any of daughters for whom provision had been made in terms of this deed, unmarried or childless, her properties or funds would devolve on sons and male heirs of he settlor absolutely according to law. Under these circumstances Tribunal held that it could not be said that any of three daughters who were then living would be entitled to receive or enjoy any specific part of income and shares being indeterminate, maximum rate should apply. On reference High Court endorsed this conclusion. This decision is one of Calcutta High Court and, therefore, is fully binding upon Benches of he Tribunal functioning within State of West Bengal. Special Bench overlooked this decision relying upon certain observations of Hon ble Supreme Court in C W T vs. Trustee of H.E.S. Nizam s Family 1977 CTR (SC) 306: (1977) 108 ITR 555 (SC). Perhaps it was not noticed by Special Bench that this case related to computation of wealth under ss. 21 (1) and 21 (4) of WT Act and, therefore had no bearing upon interpretation of s. 164 of IT Act. Be that what it may, Special Bench was fully alive to fact that now Explanation 1 to sub-s. (3) of s. 164 had been added and by this Explanation it had been brought out that beneficiaries should be determinate and known on date of deed creating trust. ld. Members Specifically referred to cl. (iv) of he Memorandum explaining provisions of Finance Bill (No. 2) of 1980 which had been quoted in extenso in para 12 as under: " (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 or 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, he trustees and beneficiaries are bale to manipulate arrangements in such manner that discretionary trust in converted into specific trust whenever it suit 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 or 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" According to them amendment had been brought out to overcome decision in Nizam s case referred to by Bench. It was on basis of this amendment that Bench was of opinion that s. 164 as it existed prior to amendment did not contemplate higher rate of tax on balance of income accruing for benefit which in present case would be income of husbands of these girls. present dispute relates to asst. yrs. 1980-81 and 1981-82 and, therefore, amendment certainly applies to these cases. In view of first part of Explanation since persons for whose benefit income is to be accumulated were not identifiable during relevant accounting years, inasmuch as these girls had never been married before relevant accounting dates, obviously beneficiaries were not named and identifiable on date of order on execution of trust deeds. This apart according to s. 166 nothing in foregoing section of this Chapter shall prevent either direct assessment of person on whose behalf or for whose benefit income therein referred to was receivable or recovery from such person of tax payable in respect of such income. In present case obviously there can be direct assessment on beneficiaries, i.e. husbands of these girls who are not yet known and, therefore, s. 166 cannot apply. It was to provide for such cases that Explanation has been added to s. 164. trustees are therefore liable to be taxed at maximum marginal rate in respect of 50per cent of share under s. 164(1) of IT Act. In result all these appeals are allowed. order of AAC to this extent is set aside and it is directed that 50per cent of trust be taxed at maximum marginal rate. *** INCOME TAX OFFICER v. M.K. JHAWAR