COMMISSIONER OF INCOME-TAX, PATNA vs RANI BHUWANESHWARI KUER

The Supreme Court held that under Section 16(1)(c) of the Indian Income-tax Act, 1922, the income received by beneficiaries of a trust can be included in the total income of the settlor if the trust is revocable within six years. The Court clarified that the third proviso to Section 16(1)(c) does not exclude the income received by the settlor as a beneficiary from tax liability. The High Court's decision to set aside the Income-tax Officer's assessment was overturned, affirming that the settlor's income from the trust is taxable until the power to revoke arises in her favor.