April 2022
Where revenue had been duly informed about dissolution of trust and still chose to continue proceeding on dissolved entity which was no more in existence, such trust was a substantive illegality and not a procedural violation of nature adverted to in section 292B
By Jagdish T. Punjabi | Chartered Accountant
Devendra Jain | Advocate
5 Varnika RPG Trust vs. PCIT
[2021] 91 ITR(T) 1 (Delhi-Trib.)
ITA No.: 451 to 453 (Delhi) of 2021
A.Y.: 2016-17;
Date of order: 9th September, 2021
Where revenue had been duly informed about dissolution of trust and still chose to continue proceeding on dissolved entity which was no more in existence, such trust was a substantive illegality and not a procedural violation of nature adverted to in section 292B
FACTSAssessee trust was formed for the sole benefit of the settlor’s minor grand-daughter.
As per the trust deed, all the trust property including accumulation of yearly income along with the rights of ownership, use, possession and dispossession, were to vest with the granddaughter on attaining majority or on 31st March 2015, whichever was later and
the term of the trust would expire on such date. The beneficiary attained majority on 3rd September, 2015 (i.e. A.Y. 2016-17).
Regular Assessment was completed u/s 143(3) in the year 2018 wherein it was brought on record that the trust stood dissolved from 3rd September, 2015 on account of granddaughter attaining majority. However, the PCIT on 15th March, 2021 initiated the revisionary proceedings u/s 263
against the assessee trust and revised the assessment order. The assessee contended that the order passed b
