ANAND PRAKASH, A.M. ORDER These appeals arise from similar set of circumstances. They were, therefore, argued by learned counsel for assessee together and are being disposed of by this combined order, for sake of convenience. 2. appellants are trusts, whose original assessments under s. 16(3) of WT Act 1957 ('the Act'), r/w s. 21(3) of act were completed on 31st Oct., 1974, on total wealth of Rs. 2,03,585 in case of Anurag Dalmia Family Trust and Rs. 64,400 in case of Parag Dalmia Trust. Subsequently these assessments were reopended by WTO in terms of clause (b) of sub-s. (1) of s. 17 of act, and reassessments were completed by WTO on following wealth : Rs. Anurag Dalmia Family Trust 3,68,435 Parag Dalmia Family Trust 2,06,810 by invoking provisions of sub s. (4) of s. 21. assessee appealed against aforesaid orders to commissioner (A) s challenging (1) validity of reopening of assessment, and (2) quantum of wealth determined. 3. CIT has not accepted assessee's appeals. present appeals have, therefore, been filed by assesses before Tribunal against orders of CIT (A) s. 4. To appreciate reasoning on which grievance of assessee is based, it would be appropriate at this stage to note facts of cases first. We will mention facts of Anurag Dalmia Family Trust first. Shri Vishnu Hari Dalmia created trust known as 'Anurag Dalmia Family Trust' vide trust deed dt. 6th June, 1964. Shri Jaidayal Dalmia Shri Parmeshwar Prasad Bogla and Shri Jagdish Prasad Poddar were appointed trustees vide this trust deed. settlor transferred to aforesaid trustees 70 per cent shares of Hari Bors. (P) Ltd., Scindia House, New Delhi and directed trustees vide cl. 2 of trust deed to divide trust fund into two moeities. One moiety together with accretions thereto less outgoings such as expenses for carrying on trust, taxes, etc., and amounts expended therefrom in manner provided for in paragraph 7 of deed was to be referred to as Part of trust fund. other moiety together with accretions there to less outgoings such as expenses for carrying on trust, taxes, etc., and amounts expended therefrom in manner provided for in paragraph 8 of deed was to be referred to as Part B of trust fund. Vide cl. 3 of trust deed, Part of trust fund was to be distributed and/or apportioned by trustees at closeof trust period in manner provided in paragraph 4 of trust deed. Paragraph 4 which provides for application of Part of of trust fund reads as below : "The said Part of trust fund shall be settled and disposed of by trustees at close of trust period as defined in paragraph 3 above in manner following, namely : (i) if said Anurag Dalmia marries within 18 years from date here of said part of Trust fund shall be settled and disposed of absolutely to wife of said Anurag Dalmia on her marriage. (ii) if said Anurag Dalmia dies unmarried within period of 18 years from dt. of this deed, then on his death; or, if he does not marry till completion of 18 years from date of this deed;, then on completion of 18 years from date of this deed said part of trust fund shall be settled and disposed of absolutely by trustees for following persons and purposes in such portion as trustees things proper - All children of Sanjay Dalmia (brother of Anurag Dalmia); all childern of brothers of settlor wife of Sanjay Dalmia; who may be in existence on said date and for any religious purposes or charitable purposes such as relief of poor, education, medical relief and advancement of any other object of general public utility." Clause 5 of deed provided for distribution of Part B of trust fund at closeof trust period indicated therein. Clause 6provided manner of distribution of trust fund and read as below : "The said Part B of trust fund shall be settled and disposed of by trustees in manner following, namely : (i) if said Anurag Dalmia marries and gets child or children within 18 years from date hereof, said Part B of trust fund or any part thereof shall made over in such proportion as trustees may decide to said child or children, as case may be, at any time between birth of first child and completion of 18 years for date hereof, at discretion of trustees; but if said Part B of trust fund has not been made over to any child of said Anurag Dalmia as aforesaid and no child of said Anurag Dalmia is in existence at expiry of 18 years from date hereof, said Part B of trust fund shall be made over to wife of Anurag Dalmia at expiry of 18 years from date hereof or on death of said Anurag Dalmia if he dies childless before expiry of 18 years from date hereof; and if no wife of said Anurang Dalmia be living at expiry of 18 years from date hereof said part B of trust fund shall be disposed of in accordance with provisions of sub-paragraph (ii) below. child on ventra so mere if and when born shall be deemed to be child in existence for purposes of this deed (sic); (ii) if said Anurang Dalmia dies unmarried within period of 18 years from date of this deed, then on his death; or, if he does not marry till compilation of 18 years from date of this deed; then on completion of 18 years from date of this deed; said Part B of trust fund shall be settled and disposed of absolutely by trustees for following persons and purposes in such proportion as trustees think proper. 'All children of Sanjay Dalmia (brother of Anurag Dalmia); all children of brothers of settlor; wife of Sanjay Dalmia who may be in existence on said date, and for any religious purpose or charitable purposes such as relief of poor, education, medical relief and advancement of any other object of general public utility.'" Clauses 7 and 8 dealt with disposal of income of trust funds during trust period and read as below : "7 During trust period as defined in paragraph 3 above in respect of said Part of trust fund, said Part of trust fund or any part thereof may until it is finally vested in accordance with provisions of paras 3 and 4 above, be applied at discretion of trustees, for all or any of following purposes, namely, benefit, maintenance, health, recreation or education of or for making ornaments, jewellery or apparel or acquiring any other articles or movable or immovable properties for use of benefit of girl to whom said Anurag Dalmia shall be betrothed, and balance, if any, of income of said part of trust fund shall be accumulated. 8. During trust period, as defined in paragraph 5 above in respect of Part B of trust fund, said Part B of trust fund or any part thereof may until it is finally vested in accordance with provisions of paragraphs 5 and 6 above, be applied at discretion of trustees for all or any of following purposes, namely, benefit maintenance, health, recreation or education of or for making ornaments, jewellery, or apparel or acquiring any other articles or movable or immovable properties for use of benefit of girl to whom said Anurang Dalmia shall be betrothed; and for benefit, maintenance, health, recreation, or education or for making ornaments, jewellery, apparel or acquiring any other articles or movable or immovable properties for use of benefit of children of Anurag Dalmia, and balance, if any, of income of said Part B of fund shall be accumulated." 5. In of Parag Dalmia Family Trust, facts are as below : Trust deed was made on 12th June, 1964. settlor of this trust was Shri Nar Hari Dalmia son of Shri Jaidayal Dalmia and following person were trustees : 1. Shri Jaidayal Dalmia. 2. Smt. Aruna Dalmia. 3. Shri Ghanshyam Kejriwal. 3. Shri Ghanshyam Kejriwal. 100 full paid ordinary shares of Rs. 100 each of Hari Bros. (P) Ltd. were trust property which were settled on trustees by settler. Vide cl. 2 of deed, trustees were directed to divide trust fund into two moieties, referred to as Part and Part B of trust fund, as in case of Anurag Dalmia Family Trust. Part of trust fund vide cl. 3 of trust deed was to be distributed and/or applied by trustees at close of trust period in manner provided in cl. 4 and said cl. 4 reads as below : "The said Part of trust fund shall be settled and disposed of by trustees at close of trust period as defined in paragraph 3 above in manner following namely : (i) if said Parag Dalmia marries within 18 years from date here of said part of trust fund shall be settled and disposed of absolutely of wife of said Parag Dalmia on her marriage; (ii) if said Parag Dalmia dies unmarried within period of 18 years from date of this deed, then on his death; or, if he does not marry till completion of 18 years from date of this deed, then on completion of 18 years from date of this deed, said Part of trust fund shall be settled and disposed of absolutely by trustees for following persons and purposes in such proportion as trustees think proper. 'All children of Archana Dalmia (Sister of Parag Dalmia); all children of brothers of settlor; who may be in existence on said date and for any religious purposes or charitable purposes such as relief of poor, education, medical relief and advancement of any other object of general public utility. 6. Clause 5 of trust deed provided for distribution and/or application of trust fund refereed to as Part B at close of trust period in manner provided in paragraph 6 of trust deed. said paragraph 6 reads as below : said part B of trust fund shall be settled and disposed of by trustees in manner following, namely; (i) if said Parag Dalmia marries and gets child or children within 18 years from date hereof, said Part B of trust fund or any part thereof shall be made over in such proportion as trustees may decide to said child or children, as case me be at any time between birth of first child and completion of 18 years from date hereof, at discretion of trustees but if said Part B of trust fund has not been made over to any child of said Parag Dalmia as is in existence at expiry of 18 years from date thereof, said Part B of trust fund shall be made over to wife of Parag Dalmia at expiry of 18 years from date hereof; and if no wife of said Parag Dalmia be living at expiry of 18 years from date hereof said Part B of trust fund shall be disposed of in accordance with provisions of sub-para (ii) below. Child on ventra in more if and when born shall be deemed to be child in existence for purpose of this deed (sic). (ii) if said Parag Dalmia dies unmarried within period 18 years from date of this deed, then on his death; or, if he does not marry till completion of 18 years from date of this deed, then on completion of 18 years from date of this deed, said Part B of trust fund shall be settled and disposed of absolutely by trustees or following persons and purposes in such proportion as trustees think proper. 'All children of Archana Dalmia (sister of Parag Dalmia) all children of brothers of settlor; who my be in existence on said date, and for any religious purposes or charitable purposes as relief of poor, education, medical relief and advancement of any other object of general public utility.'" Clauses 7 and 8 of trust deed provided for disposal of income of trust fund during trust period and same read as below : "7 During trust period as defined in paragraph 3 above in respect of said Part of trust fund, or any part thereof may until it is finally vested in accordance with provisions of paras 3 and 4 above, be applied at discretion of trustees, for all or any of following purposes, namely, benefit maintenance, health, recreation or education of or for making ornaments, jewellery or apparel or acquiring any other articles or movable or immovable properties for use of benefit of girl to whom said Parag Dalmia shall be betrothed, and balance, if any, of income of said part of trust fund shall be accumulated. 8. During trust period as defined in para 5 above in respect of part B of trust fund, said part B of trust fund or any part thereof may until it is finally vested in accordance with provisions of paras 5 and 6 above, be applied at discretion of trustees for all or any of following purpose, namely, benefit, maintenance, health, recreation or education of or for making ornaments, jewellery or apparel or acquiring any other articles or movable or immovable properties for use of benefit of girl to whom said Parag Dalmia shall be betrothed; and for benefit, maintenance, health, recreation or education or for making ornaments, jewellery, apparel or acquiring any other articles or movable or immovable properties for use or benefit of children of Parag Dalmia, and balance, if any, of income of said Part B of trust fund shall be accumulated." 7. In case of Anurag Dalmia Family Trust, computation of net wealth for asst. yr. 1974-75 filed along with original return declared net taxable wealth of Rs. 2,03,585. said computation appears at page 1A of paper book. It does not indicate separately moieties and B of trust fund. totality of trust fund has been returned and, therefrom, exemption under s. 5(1A) of Act to extent of Rs. 1.50,000 has been claimed, with regard to value of shares. Assessment as noted earlier was completed accepting above returned wealth on 31st Oct., 1974. copy of original assessment order has been placed at page 1 of assessee's paper book. From perusal thereof, it appears that WTO did not examine details of trust deed and composition of moieties and B and their purposes. He completed assessments in question by accepting figure of wealth as declared by assessee, namely, Rs. 2,03,585. 8. In case of Parag Dalmia Family Trust, computation of net wealth for asst. yr. 1974-75 was filed declaring net wealth of Rs. 64,400. In this computation again, there is no reference to moieties and B separately and computation has been done after claiming exemption under s. 5(1A) in respect of shares to extent of Rs. 1,11,064. Along with return balance sheet of trust was, however, filed where on liabilities side, there is reference to trust fund Part and to trust fund Part B. From perusal of assessment order originally made by WTO, it appears that said assessment was completed by WTO exception assessee's returned wealth and, there is no reference in body of assessment order to various clauses of trust deed and two parts of trust fund as noted above. 9. It appears that some time after assessments had been completed as above, internal audit party audited assessments made and they pointed had not been taken of various provisions of trust deed and of fact that shares of beneficiaries in trust in question were indeterminate. On receipt of said audit notes, WTO appears to have examined his record once again and after being convinced that what was being pointed out to him was correct, he initiated proceedings under s. 17(1) (b) against both trusts. reasons recorded are more or less similar and it will, therefore, do it we take note of reasons recorded in case of one of trusts, namely, Parag Dalmia Family Trust. said reasons appeared at page 4 of paper book and read as below: "It has been brought to my notice by revenue audit vide memo No. 16 dt. nil, that assessee is private trust where beneficiaries are neither known nor their share determined. Accordingly, exemption of Rs. 1,50,000 under s. 5 in respect of financial assets like shares, bank deposits, etc., would not be available to assessee in view, of Explanation given below s. 2(iv) of WT 1957. In assessment for this year completed on 31st Oct., 1974, it is noted that assessee was allowed exemption of Rs. 1,11,064 on this account. It is thus evident that net wealth chargeable to tax had escaped assessment to extent of Rs. 1,75,464. Issue notice under s. 17 of Act as under : Rs. Net wealth of assessee 64,400 Add. Exemption under s. 5 allowed 1,11,064 Total wealth 1,75,464 Sd/- WTO CCXI." assessee challenged correctness of initiation of proceedings n d pointed out that information received from audit could not be regarded as information in accordance with decision of Hon'ble Supreme Court in case of Indian and Eastern Newspaper society vs. CIT (1979) 12 CTR (SC) 190 : (1979) 119 ITR 996. It was also pointed out in reassessment proceedings before WTO that Part of trust fund was to be absolutely settled on wife of Shri Anurag Dalmia and Parag Dalmia respectively and that in case of Shri Anurag Dalmia or Parag Dalmia not marrying or dying unmarried, trust fund was to be handed over to children of Shri Sanjay Dalmia and Archana Dalmia and, therefore, it could not be said with regard to part that interests of beneficiaries were indeterminate. Even in case of Part B it was stated that amount was to be applied for children of Shri Anurag Dalmia, Shri Parag Dalmia and so, it could to be said that shares were not determinate. It was, therefore, urged that original assessments as completed were correct. above submissions of assessee were, however, not accepted by WTO, assessee thereupon appealed to AAC who also rejected assessee's contention with regard to invalidity of invitation of proceeding under s. 17(1) (b) but upheld contention of assessee that so far as Part of fund was concerned, shares of beneficiaries therein were determinate as regards Part B, however, learned AAC pointed out that shares of beneficiaries were entirely discretionary depending on discretion of trustees and same were not determinate. Therefore, in respect of Part B, it was held by learned AAC that appellant trust was not entitled to deduction under s. 5(1A). 1 0 . present appeals have been filed by assesses against aforesaid orders of learned AAC. On merits, learned counsel for assessee was fair enough to concede that he could not dispute finding of learned AAC with regard to Part B of trust fund in both case. We confirm this finding. shares of beneficiaries in part B of trust fund are indeterminate. So far as Part was concerned, AAC had already accepted assessee's submission that shares of beneficiaries were determinate and Revenue not being in appeal against said finding of AAC, said finding had to stay and it is not scope of present appeals to go into character of Part of trust fund. Part B of trust funds are, however, liable to be assessed under sub-s. (4) of s. 21 as shares of beneficiaries therein were entirely indeterminate. It was not meant for one child of either Shri Parag Dalmia or Shri Anurag Dalmia but for their children and discretion was given to trustees to divide income as well as corpus of trust amongst various children in whatever manner trustees deemed fit. Therefore, so far as Part B of trust fund was concerned, shares of beneficiaries therein were indeterminate and so provision of sub s. (4) of s. 21 were clearly attracted thereto. 11. In view of above position, at tack of learned counsel for assessee was mainly concentrated at initiation of proceedings under s. 17(1) (b) and same pleas as were taken by learned counsel before authorities below were repeated before us and it was pointed out that audit party could not be source of information of law to WTO and WTO had erred in initiating proceedings under s. 17(1) (b) on basis of report of audit. Accordings to learned counsel for assessee, trust deed was very much on record and it would be in corrected to presume that learned WTO had not gone through trust deed before completing assessments in question. Once he completed assessments on basis of returned wealth after examining trust deed, he had formed his opinion about assessee's assessability and it would be mere change of opinion. orders of WTO were clearly bad and were directly hit by ratio of Indian and Eastern Newspaper Society case (supra). 12. On behalf of Revenue, above submissions were opposed and it was pointed out that Revenue audit merely conveyed information to WTO with regard to various provision of trust deed and they were not source of any information of law to WTO. law was contained in sub-s. (4) of s. 21 itself and by merely pointing out to provisions of sub-s. (4) of s. 21 it of s. 21 itself and by merely pointing out to provisions of sub-s. (4) of s. 21 it could not be said that Revenue audit had propounded any proposition of law which was treated by WTO as source of information for initiating proceedings under consideration. WTO, after examining Revenue audit, saw law for himself and when he was convinced that prima facie mistake had taken place not due to omission or failure on his on part to note relevant provisions of law as contained in statue, he reopened assessments and such reopening was valued as per their Lordships of Hon'ble Supreme Court vide Indian & Easter newspaper Society's case (supra) itself. To presume that WTO had examined trust deed was, on facts of present case, totally erroneous because whatever had been before WTO was mentioned by him in his order and perusal of original assessment order would clearly show that he did not go through provisions of trust deed enumerated above and his mind was not cognizant of two parts of trust funds one being determinate and other being indeterminate. He, therefore, urged that we should uphold validity of initiation of proceedings in present cases. 13. We have given careful consideration to facts of case and rival submissions. We have also gone through judgments of their Lordships of Hon'ble Supreme Court in case of Indian and Eastern Newspaper Society (supra) at pages 1000 and 1001 of aforesaid judgment, their Lordships have quoted with approval observation of Hon'ble Supreme Court in case of CIT vs. A. Raman & Co. (1968) 67 ITR 11 wherein scope of expression 'information' as used in s. 147(b) of IT Act, 1961 was elaborated. It is what justice Shah, speaking for Court, had stated : '... Jurisdiction of ITO to reassess income arise if he has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment. That information, must, it is true, have come into possession of ITO after previous assessment, but even if information be such that it could have been obtained during previous assessment from investigation of materials on record, or facts disclosed thereby or from other enquiry or research into facts or law, but was not in fact obtained, jurisdiction of ITO is not affected." (p. 16) In view of above definition of information, it is not relevant that trust deeds were on record of WTO, nor is it relevant that assesses had filed balance sheets of trust wherein part and part B of trust funds had been separately demarcated. Mere demarcation of trust funds into part and B would not bring to knowledge of WTO that part was determinate and part B was indeterminate. That knowledge could have been gathered by him only if he had cared to read relevant provisions of trust deed which he did not do while finalising original assessment orders. His failure to do so would not as per above observations of their Lordships of Hon'ble Supreme Court bar jurisdiction for action under s. 147 (1) (b) which is analogous to provisions of s. 17(1) (b). Even in case of Indian & Eastern Newspaper Society (supra), their Lordships have acknowledged this position. This is what their Lordships observed : "But although audit party does not possess power to so pronounce o n law, it nevertheless may draw attention of ITO to it. Law is one thing, and its communication another. If distinction between source of law and communicator of law is carefully maintained, confusion which often results in applying s. 147(b) may by avoided. While law may be enacted, or laid down only by person or body with authority in that behalf, knowledge or awareness of law may be communicated by anyone. No authority is required for purpose. ... In every case, ITO must determine for himself what is effect and consequence of law mentioned in audit note and whether in consequence of law, which has now come to his notice he can reasonably believe that income has escaped assessment. basis of his belief must be law of which he has now become aware. opinion rendered by audit party in regard to law cannot, for purpose of such belief, add to or colour significance of such law. In short, true evaluation of law in its bearing on assessment must be made directly and solely by ITO." (p. 1003) Thus, what has to be seen in present case is as to whether ITO himself examined law as contained in s. 21(4) and applied that to fact of case or whether he was guided by information of audit party alone. In this case, WTO had not originally noted various proceedings of trust deeds which went to show that part was determinate and part B was indeterminate. information as to this aspect of matter could be had only by examining trust deeds which were examined by WTO only after receiving audit note. After examining said provision of trust deed, it became clear to him that provisions of sub-s. (4) of s. 21 were applicable in present cases and that same had not been originally applied. It is true that he felt that sub-s. (4) of s. 21 might be applicable with regard to entire trust fund including Part and Part B. That view has been modified by AAC to extent that, according to him, s. 21(4) was applicable only with regard to Part B of trust fund and not with regard to Part A. opinion of WTO was, thus, prima facie not wholly incorrect even otherwise what has to be seen for purpose of initiating proceeding under s. 17(1) (b) is other prima facie situation obtaining on record to induce reasons to believe in WTO, belief of WTO at this stage has to be with nature of it tentative and same cannot be equated with final consolation which would be arrived at by him only after examining submissions of assessee in course of assessment proceedings. In our opinion, there is no occasion for holding on facts of present case that WTO has changed his opinion on same subject and on same material. There was no formation of belief by him to begin with regard to facts which could be had only by gleaning to trust deed and application of law thereto. He did not undertake this exercise at time of original assessment. He discovered those facts only after original assessments had been completed. On receipt of audit note and on examination of said note, he found that law as communicated to him by audit party was in fact applicable to facts of present case and so he applied provisions of sub-s. (4) of s. 21. facts found reopening of proceeding in such situation is, in our opinion, entirely valid and we, accordingly, uphold invitation of proceedings in present cases. 14. In result, appeals stand rejected on this point. 15. Ground No. 5 of appeals in question read as below : "That without prejudice to above grounds, learned AAC ought to have directed WTO to apply rates of wealth-tax to Part of trust fund as if said Part was independent trust and should not have merged same with Part B of trust fund for purposes of wealth-tax inasmuch as according to AAC two parts of trust are independent of each other, one of which is specific and determinate and other one is allegedly indeterminate." submission made above are correct. Two separate assessments have to be made with regard to trust funds, one of Part under sub-s. (3) of s. 21 and another of Part B in terms of sub-s. (4) of s. 21. orders of AAC imply this yet in view of aforesaid ground of appeal, we do clarify position as desired by assessee's learned counsel. 16. In result, we will treat appeals as partly allowed. *** ANURAG DALMIA FAMILY TRUST v. WEALTH-TAX OFFICER