Manish Dhruv Trust, Meerut V. Pr.CIT , Ghaziabad

ITA 453/DEL/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6623 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2016-2017
• Appeal Filed On: 19-04-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Keywords: Capital asset; Gift; Revision of order; Principle of natural justice; Earning of tax free income; Corroborative evidences; Scheme of amalgamation; TDS
• Section: 69; 263; 63; 143(3); 142(1); 12AA; 143(2); 13; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SH. AMIT SHUKLA, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 451/DEL/2021 : ASSTT. YEAR : 2016-17 VARNIKA RPG TRUST, A-2, BAGHPAT ROAD, SHAMBHU NAGAR, MEERUT, UTTAR PRADESH-250002 VS PR. CIT, GHAZIABAD (APPELLANT) (RESPONDENT) PAN NO. AA BTV1326M ITA NO. 452/DEL/2021 : ASSTT. YEAR : 2016-17 BHAVYA RPG TRUST, A-2, BAGHPAT ROAD, SHAMBHU NAGAR, MEERUT, UTTAR PRADESH-250002 VS PR. CIT, GHAZIABAD (APPELLANT) (RESPONDENT) PAN NO. AABTB4824G ITA NO. 453/DEL/2021 : ASSTT. YEAR : 2016-17 SH. DHRUV GUPTA (MANISH DHRUV TRUST), A-2, BAGHPAT ROAD, SHAMBHU NAGAR, MEERUT, UTTAR PRADESH-250002 VS PR. CIT, GHAZIABAD (APPELLANT) (RESPONDENT) PAN NO. AACTM3129J ASSESSEE BY : SH. GAUTAM JAIN, ADV. REVENUE BY : MS. NIDHI SRIVASTAVA, CIT DR DATE OF HEAR ING: 05 . 0 8 .20 2 1 DATE OF PRONOUNCEMENT: 09 .0 9 .20 2 1 ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 2 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEALS HAVE BEEN FILED BY THE ASSESSE E AGAINST THE ORDERS OF LD. PCIT, GHAZIABAD DATED 26. 03.2021. 2. SINCE, THE ISSUES INVOLVED IN ALL THE APPEALS AR E IDENTICAL, WHICH WERE HEARD TOGETHER. 3. IN ITA NO. 451/DEL/2021, FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESSEE: 1. THAT IMPUGNED ORDER DATED 26.3.2021 U/S 263 OF THE ACT BY THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX MADE ON A NON-EXISTENT PERSON IS ILLEGAL , INVALID AND VOID-AB-INITIO AND THEREFORE, NULLITY I N THE EYES OF LAW. 1.1 THAT M/S VARNIKA RPG TRUST WAS DISSOLVED ON 31.3.2016 UNDER THE TRUST, DEED DATED 16.3.2009 AND THUS THE TRUST HAD CEASED TO EXIST ON THE DATE OF IMPUGNED ORDER AND THEREFORE BOTH THE ORDER OF ASSESSMENT DATED 28.12.2018 U/S 143(3) OF THE ACT AND EVEN THE IMPUGNED ORDER DATED 26.3.2021 U/S 263 OF THE ACT ARE WITHOUT JURISDICTION AND DESERVES TO BE QUASHED AS SUCH. 2. THAT ORDER DATED 26.3.2021 U/S 263 OF THE ACT BY LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX, GHAZIABAD HAS BEEN MADE WITHOUT SATISFYING THE STATUTORY PRECONDITIONS CONTAINED IN THE ACT AND IS THEREFORE WITHOUT JURISDICTION AND THUS, DESERVES T O BE QUASHED AS SUCH. 2.1 THAT THE LEARNED PR. COMMISSIONER OF INCOME TAX HAS FAILED TO APPRECIATE THAT ONCE THE LEARNED ASSESSING OFFICER ON EXAMINATION OF THE FACTS ON RE CORD AND AFTER MAKING ALL POSSIBLE ENQUIRIES HAD ACCEPTE D CLAIM OF THE APPELLANT THEN SUCH AN ORDER OF ASSESSMENT COULD NOT BE REGARDED AS ERRONEOUS IN AS ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 3 MUCH AS PREJUDICIAL TO THE INTEREST OF REVENUE MERE LY BECAUSE THE LEARNED COMMISSIONER OF INCOME TAX HAD A DIFFERENT OPINION AND THAT TOO, WITHOUT HAVING ESTABLISHED IN ANY MANNER THAT, VIEW ADOPTED BY THE LEARNED ASSESSING OFFICER WAS AN IMPOSSIBLE OR UNSUSTAINABLE VIEW. 2.2 THAT THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX HAS FAILED TO APPRECIATE THAT ACTION U/S 263 OF THE ACT IS OTHERWISE TOO INAPPLICABLE ON THE FACTUAL MATRIX OF THE FACTS OF THE INSTANT CASE SIN CE ADMITTEDLY, UNDISPUTEDLY AND UNDENIABLY NOT A CASE OF LACK OF ENQUIRY OR LACK OF INVESTIGATION AND PE RUSAL OF THE SHOW CAUSE NOTICE ITSELF WOULD SHOW THAT IT HAS NOT BEEN DENIED OR DISPUTED THAT ALL RELEVANT INFORMATION HAVE BEEN FURNISHED/OBTAINED IN THE COURSE OF ASSESSMENT PROCEEDING AND THEREFORE THE INVOCATION U/S 263 OF THE ACT IS NOT IN ACCORDANCE WITH LAW. 2.3 THAT THE FINDING OF THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX THAT THE LEARNED ASSESSING OFFICER ACCEPTED THE VERSION OF THE ASSES SEE WITHOUT ANY ENQUIRY OR VERIFICATION OR EVEN THAT AO HAS NOT APPLIED HIS MIND IS FACTUALLY INCORRECT, CONTRA RY TO RECORD AND OTHERWISE TO PERVERSE AND WITHOUT APPLICATION OF MIND AND THEREFORE UNTENABLE. 2.4 THAT THE LEARNED PRINCIPAL COMMISSIONER OF INCO ME TAX HAS FAILED TO APPRECIATE THAT SURMISES, CONJECT URE AND SUSPICION COULD NOT BE A BASIS MUCH LESS A VALI D BASIS TO INVOKE SECTION 263 OF THE ACT. 2.5 THAT THE LEARNED PRINCIPAL COMMISSION OF INCOME TAX HAS ILLEGALLY INVOKED SECTION 263 OF THE ACT WI THOUT CONFRONTING THE MATERIAL/INVESTIGATION REPORT RELIE D UPON TO APPELLANT AND THEREFORE ORDER SO MADE IN DISREGARD OF PRINCIPLES OF NATURAL JUSTICE IS A VIT IATED ORDER. 2.6 THAT VARIOUS OTHER ADVERSE FINDINGS RECORDED IN THE NOTICE U/S 263 OF THE ACT AND, ALSO IN IMPUGNED ORD ER ARE FACTUALLY INCORRECT, VAGUE, LEGALLY MISCONCEIVE D AND UNTENABLE. ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 4 2.7 THAT WHILE PASSING THE ORDER U/S 263 OF THE ACT 0 THE LEARNED PRINCIPAL COMMISSION OF INCOME TAX CANN OT TRAVEL BEYOND THE SHOW CAUSE NOTICE AND THEREFORE FINDINGS AND OBSERVATION AND ALSO THE MATERIAL RELI ED UPON NOT REFERRED IN THE SHOW CAUSE NOTICE BUT MADE PART OF THE ORDER COULD NEITHER IN LAW AND NOR ON F ACT THE MADE A BASIS ILLEGAL ASSUME JURISDICTION U/S 26 3 OF THE ACT. 2.8 THAT THE LEARNED PRINCIPAL COMMISSIONER OF INCO ME TAX HAS FAILED TO APPRECIATE THAT SECTION 263 OF TH E ACT CANNOT BE INVOKED TO MAKE DEEPER ENQUIRY. IN OTHERWORDS, ALLEGATION OF PROPER ENQUIRY OR INADEQU ATE ENQUIRY CANNOT BE A VALID BASIS TO INVOKE SECTION 2 63 OF THE ACT. 3. THAT THE LEARNED PRINCIPAL COMMISSIONER OF INCOM E TAX HAS ALSO ERRED BOTH IN LAW AND ON FACTS IN DIRE CTING TO MAKE AN ADDITION OF RS. 65,24,465/- REPRESENTING GAIN ON SALE OF EQUITY SHARES THROUGH RECOGNIZED ST OCK EXCHANGE AND, ERRONEOUSLY HELD AS ALLEGED INTRODUCT ION OF UNACCOUNTED MONEY AND UNEXPLAINED INCOME TAXABLE UNDER THE HEAD INCOME FROM OTHER SOURCES BY INVOKING SECTION 69 OF THE ACT READ WITH SECTION 115BBE OF THE ACT. 3.1 THAT THE LEARNED PRINCIPAL COMMISSION OF INCOME TAX HAS ALSO ERRED BOTH IN LAW AND, ON FACTS IN NOT DIRECTING TO ALLOW EXEMPTION OF LONG TERM CAPITAL G AIN OF RS. 65,24,465/- IN RESPECT OF SALE OF SHARES THR OUGH RECOGNIZED STOCK EXCHANGE U/S 10(38) OF THE ACT. 3.2 THAT WHILE MAKING THE AFORESAID ADDITION AND DENYING THE EXEMPTION LEARNED PRINCIPAL COMMISSION OF INCOME TAX HAS FAILED TO APPRECIATE THAT, APPELLANT WAS OWNER OF EQUITY SHARES OF A LISTED COMPANY WHIC H HAD BEEN HELD BY IT FOR A PERIOD EXCEEDING 12 MONTH S AND THE SAME WERE SOLD ON RECOGNIZED STOCK EXCHANGE AFTER PAYMENT OF STT, RESULTING INTO A LONG TERM CAPITAL GAIN AND THEREFORE THE LONG TERM CAPITAL GAIN ACCRUED TO THE ASSESSEE ON TRANSFER OF LONG TE RM CAPITAL ASSET WAS NOT INCLUDIBLE IN TOTAL INCOME OF THE ASSESSEE IN VIEW OF SECTION 10(38) OF THE ACT. ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 5 3.3 THAT THE LEARNED PRINCIPAL COMMISSION OF INCOME TAX HAS FAILED TO APPRECIATE THE EVIDENCE TENDERED BY THE APPELLANT TO SUPPORT THE PURCHASE AND SALE OF SHARES AND HENCE FINDINGS MECHANICALLY RECORDED ON BORROWED INFERENCE IN DISREGARD OF EVIDENCE AND BAS ED ON IRRELEVANT AND EXTRANEOUS CONSIDERATIONS ARE MISCONCEIVED AND, MISPLACED. 3.4 THAT FURTHERMORE THE LEARNED PRINCIPAL COMMISSION OF INCOME TAX HAS MADE THE ADDITION AND DENIED EXEMPTION ON MERE SPECULATION, GENERALIZED STATEMENTS, THEORETICAL ASSUMPTIONS AND ALLEGATIONS AND ASSERTIONS, WITHOUT THERE BEING ANY SUPPORTING EVIDENCE AND IS THEREFORE NOT IN ACCORDANCE WITH LA W. 4. THE APPEAL IN THE CASE OF VARNIKA GUPTA IN ITA N O. 451/DEL/2021 IS TAKEN AS THE LEAD CASE, THE RATIO O F WHICH WOULD BE APPLICABLE TO ALL THE CASES. 5. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2016-17 ON 28.07.2016 SHOWING TOTAL INCOME OF RS. 21,08,270/- CLAIMING EXEMPT INCOME OF RS. 65,24,465/- U/S 10(38 ) OF THE ACT. THE CASE WAS SELECTED FOR SCRUTINY U/S 143(3) FOR VERIFICATION OF THE CLAIM OF EXEMPT INCOME WHICH HA S BEEN DULY ACCEPTED BY THE ASSESSING OFFICER AFTER DUE VERIFIC ATION. THE ASSESSMENT ORDER IN THE SAID CASE U/S 143(3) WAS PA SSED ON 28.12.2018. 6. THE PERTINENT FACTS RELEVANT FOR THE ADJUDICATIO N OF THE CASE ARE THAT, NOTICE U/S 143(2) WAS ISSUED ON 16.08.2017 NOTICE U/S 142 WAS ISSUED ON 27.08.2018 WHEREIN THE ASSESSEE WAS ASKED TO FILE REPLIES ON THE ISSUES PE RTAINING TO BY LAWS CERTIFICATE OF VARNIKA RPG TRUST (ANNEXU RE- ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 6 POINT-1), DETAILS OF THE FAMILY TRUST WITH REGARD T O THE PROVISIONS OF SECTION 12AA (POINT-11) AND THE DETAI LS OF THE SHARE TRANSACTIONS ON OR BEFORE 04.09.2018. VIDE REPLY DATED 29.08.2018, THE ASSESSEE HAS ATTAC HED COPY OF THE TRUST DEED OF THE ASSESSEE TRUST AND TH E DETAILS OF THE SHARE TRANSACTIONS. VIDE LETTER DATED 24.10.2018, THE ASSESSING OFFICER SOUGHT FURTHER CLARIFICATION WITH REGARD TO THE TRUST DEED . THE QUERIES ARE AS UNDER: 1. AS PER THE TRUST DEED, THE TRUST GOT REGISTERE D ON 16- 03-2009 IN THE NAME OF VARNIKA RPG TRUST WHEREIN TH E SETTLER MS. RAJBALA GUPTA AND MS. BENU GUPTA CREATE D A TRUST FOR THE SOLE BENEFIT OF HER (THEIR) MINOR GRANDDAUGHTER NAMELY VARNIKA GUPTA WHICH READS AS FOLLOWS: 'THE SETTLER IS DESIROUS OF CREATING A TRUST FOR TH E SOLE BENEFIT OF HER MINOR GRANDDAUGHTER NAMELY VARNIKA G UPTA AND IN ORDER TO EFFECTUATE THE SAID DESIRE, THE SET TLER HAS SETTLED FIXED SUM OF RS. 5000/- MENTIONED HEREINAFT ER IN THIS INDENTURE TO BE HELD AS TRUST PROPERTY, FOR TH E FULFILLMENT OF THE OBJECT AND PURPOSE STATED IN THI S INDENTURE. 2. FURTHER, THE POINT NO. 3 OF THE TRUST DEED READS AS FOLLOWS: THAT THE TOTAL TRUST FUNDS ALONG WITH ALL ACCRETIO NS THERETO BY WAY OF INCOME, CONTRIBUTIONS, GIFTS AND/OR OTHER WISE SHALL BE ACCUMULATED TILL ATTAINING OF THE MAJORITY O F THE ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 7 BENEFICIARY OR 31.03.2015 AND MAY BE USED FOR THE P URPOSE OF HIGHER EDUCATION OF THE BENEFICIARY, OR TO ANY O THER USE SHE MAY LATER DESIRE. 3. HEREIN PLEASE EXPLAIN: (A) WHEN THE SHARES HELD IN THE NAME OF THE TRUST WERE TRANSFERRED IN THE NAME OF THE TRUSTEE. AS PER THE TRUST DEED, THE TRUST HAS LIQUIDATED ON 31-03-2015. (B) PLEASE EXPLAIN WHY YOU HAD PREFERRED TO FILE A RETURN IN THE NAME OF TRUST INSTEAD IN THE NAME OF TRUSTEE AS W.E.F. 01-04-2015 I.E. FINANCIAL YEAR 2015-16, ASSE SSMENT YEAR 2016-17. THE YEAR UNDER REFERENCE, THERE IS NO TRUST IN EXISTENCE AND THE ENTIRE TRUST PROPERTY HAS BEEN TRANSFERRED TO THE TRUSTEE. (C) PLEASE PROVIDE THE DOCUMENTARY EVIDENCE OF CHA NGE IN SHARE PRICE AT WHICH THE SHARES WERE SOLD. (D) AS PER THE TRIAL BALANCE, THE FOLLOWING AMOUNT HAS BEEN SHOWN INVESTED IN THE NAME OF THE TRUST I.E. (I) SHARES- HOTLY COMMERCIAL (P) LTD. RS.4 ,00,000.00 (II) SHARES- PARKAR CONSTRUCTION (P) LTD. RS.2,00 ,000.00 (III) SHARES- RPG INDUSTRIAL PRODUCT (P) LTD. RS.22 ,96,000.00 VIDE LETTER DATED 10.11.2018, THE ASSESSEE HAS REPL IED TO THE ABOVE QUERIES WHICH IS AS UNDER: ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 8 TO, THE INCOME TAX OFFICER, WARD 2(4), MEERUT. RE: - M/S VARNIKA RPG TRUST, A-2, BAGHPAT ROAD, SHA MBHU NAGAR, MEERUT (ASSESSEE) ASSESSMENT YEAR: 2016-17 PAN NO.: AABTV1326M ASSESSMENT PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) DEAR SIR, WITH REFERENCE TO THE CAPTIONED PROCEEDINGS AND NOT ICE DATED 24.10.2018 ISSUED U/S 142(1) OF THE ACT, WE, ON BEHALF OF AND UNDER THE INSTRUCTIONS OF THE ASSESSE E HUMBLY SUBMIT AS UNDER: WITH REFERENCE TO YOUR OBSERVATIONS REGARDING THE T RUST DEED AT SERIAL NUMBERS 1 AND 2 OF THE ABOVE REFERRE D NOTICE, WE WOULD LIKE TO DRAW YOUR KIND ATTENTION T OWARDS THE POINT NUMBER 9 OF THE TRUST DEED AS GIVEN ON PA GE NUMBER 6 THEREOF, WHICH READS AS UNDER: THAT ALL THE TRUST PROPERTY INCLUDING ACCUMULATION S IN THE FORM OF YEARLY INCOME AND OTHER EDITIONS AND ACCRET IONS TO THE TRUST PROPERTY SHALL VEST WITH THE SOLE BENEFIC IARY NAMELY VERNIKA GUPTA AFTER HER ATTAINING 18 YEARS O F AGE OR 31.03.2015, WHICHEVER IS LATER AND SUBJECT TO CL AUSE 11, MENTIONED HEREINAFTER. THEN THE TERM OF THE TRUST M AY EXPIRE AND ALL THE TRUST PROPERTY INCLUDING ALL ACC RETIONS ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 9 UPTO THE DATE OF EXPIRY OF THE TERM SHALL BECOME TH E SOLE PROPERTY OF THE BENEFICIARY WITH ALL THE RIGHTS OF OWNERSHIP, USE, POSSESSION AND DISPOSITION.' FROM THE ABOVE CLAUSE IT IS CLEAR THAT THE TERM OF THE ASSESSEE TRUST WERE-TO EXPIRE WHEN THE BENEFICIARY ATTAINS THE AGE OF 18 YEARS OR ON 31ST OF MARCH 2015 WHICHE VER IS LATER. THE DATE OF BIRTH OF THE BENEFICIARY OF THE ASSESSEE TRUST NAMELY, MS. VARNIKA GUPTA, IS 3RTL SEPTEMBER 1997, THEREFORE SHE HAS COMPLETED THE AGE OF 18 YEARS ON 3 SEPTEMBER 2015 I.E. AFTER 31 MARCH 2015 AND WITHIN THE YEAR UNDER CONSIDERATION. THE BENEFICIARY OF THE AS SESSEE TRUST NAMELY, MS. VARNIKA GUPTA, IS PRESENTLY ASSES SED TO TAX AT PAN BWTPG7821F. PHOTOCOPY OF HER PAN CARD IS ENCLOSED HEREWITH AS ANNEXURE 1 IN SUPPORT OF HER D ATE OF BIRTH. THEREFORE, THE OBSERVATION OF YOUR GOOD-SELF THAT THE ASSESSEE TRUST STANDS LIQUIDATED ON 31 MARCH 2015 I S INCONSISTENT WITH THE TERMS OF THE TRUST DEED. THE TERM OF THE ASSESSEE TRUST HAS EXPIRED DURING THE YEAR UNDE R REFERENCE. THIS IS ALSO SUPPORTED BY THE FACT THAT THE YEAR UNDER CONSIDERATION IS THE LAST YEAR FOR WHICH THE ASSESSEE TRUST FILED ITS ITR. IN RESPONSE TO THE QUERIES RAISED BY YOUR GOOD-SELF AT SERIAL NUMBER 3 OF THE ABOVE REFERRED NOTICE WE SUB MIT AS UNDER:- A) FROM THE ABOVE, IT IS CLEAR THAT THE ASSESSEE T RUST DID NOT EXPIRE ON 31.03,2015 HENCE THE SHARES HELD IN THE NAME OF THE TRUST WERE TRANSFERRED TO ITS BENEFICIA RY AFTER 03.09.2015, I.E. AFTER THE SALE OF THE SHARES ON WH ICH LTCG ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 10 WAS EARNED. THE SALE OF SHARES WAS MADE DURING THE MONTHS OF MAY AND JUNE, 2015. B) THE ITR FOR THE RELEVANT YEAR HAS BEEN FILED IN VIEW OF THE FACT THAT THE ASSESSEE TRUST WAS CONTINUING DURING THE YEAR IN VIEW OF THE CLAUSE 9 OF THE TRUST DEED. C) PHOTOCOPIES OF THE CONTRACT NOTES AS ISSUED TO THE ASSESSEE TRUST BY ITS BROKER REGARDING THE SALE OF SHARES ON WHICH LONG-TERM CAPITAL GAIN HAS BEEN EARNED ARE ENCLOSED HEREWITH AS ANNEXURE 2. THE SHARES WERE SO LD ONLINE THROUGH BOMBAY STOCK EXCHANGE AND SALE RATES THEREOF ARE VERIFIABLE FROM THE CONTRACT NOTES ENCL OSED HEREWITH. D) THE FACT THAT THE ASSESSEE HAS MADE INVESTMENT IN SHARE CAPITAL OF 3 COMPANIES TOTALING RS.28,96,000/ - HAS ALREADY BEEN ACCEPTED AND STATED BY THE ASSESSEE AT SERIAL NUMBER 7 OF ITS REPLY DATED 29 AUGUST 2018. HENCE T HE SAME IS AN UNDISPUTED AND ADMITTED FACT REQUIRING N O FURTHER CLARIFICATION. E) AS EXPLAINED EARLIER AT SERIAL NUMBER 7 OF OUR REPLY DATED 29 TH AUGUST 2018, IT IS AGAIN SUBMITTED THAT THE AMOUNT OF RS.97,11,738/- HAS BEEN GIVEN AS UNSECURE D LOAN TO M/S RPG INDUSTRIAL PRODUCT (P) LTD. THE CON FIRMED COPY OF ACCOUNT OF THE ASSESSEE AS APPEARING IN THE BOOKS OF THE SAID ENTITY HAS ALREADY BEEN FILED AS ANNEXU RE 6 TO OUR REPLY DATED 29 AUGUST 2018. FROM THE SAID CONFI RMED COPY OF ACCOUNT ALL THE DETAILS OF THE SAID LOAN AR E APPARENT. ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 11 F) THE ASSESSEE COMPANY HAS NOT SOLD ANY SHARES OF ANY OF THE PRIVATE LIMITED COMPANIES HENCE THE MINU TES OF THE SAME ARE NOT REQUIRED TO BE FILED. THE EXEMPT L ONG TERM CAPITAL GAIN HAS BEEN EARNED FROM THE SALE OF LISTED SHARES ON BOMBAY STOCK EXCHANGE ONLY. G) THE STATEMENT MADE BY YOUR GOOD-SELF THAT MS. VERNIKA GUPTA, ATTAINED MAJORITY ON 31.03.2015, IS FACTUALLY INCORRECT AS IS EVIDENT FROM HER PAN CARD ENCLOSED HEREWITH AS ANNEXURE 1. THE BENEFICIARY OF THE ASSESSEE TRUST IS NOT RELATED TO ANY OF THE DIRECTO RS OF THE COMPANIES WHOSE SHARES HAVE BEEN SOLD DURING THE RELEVANT YEAR. THE LIST SHOWING THE NAME OF THE OTH ER COMPANIES AND THE RELATION OF THE BENEFICIARY OF TH E ASSESSEE TRUST WITH ITS DIRECTORS IS AS UNDER: NAME OF COMPANY RELATION WITH THE DIRECTORS HOLY COMMERCIAL PVT. LTD. GRANDMOTHER OF THE BENEFICIARY. PARKER CONSTRUCTION PVT. LTD. NO RELATION WITH ANY DIRECTOR. RPG INDUSTRIAL PRODUCT (P) LTD. FATHER OF THE BENEFICIARY. H) AS STATED HEREIN ABOVE AT SERIAL NUMBER A), THE BENEFICIARY OF THE ASSESSEE TRUST DID NOT ATTAIN MA TURITY AS ON 31 MARCH 2015. HENCE NO SHARES WERE TRANSFERRED TO HER OR ANY SALE PROCEEDS OF THE SAME WERE RECEIVED IN HER BANK ACCOUNT. THIS FACT IS ALSO APPARENT FROM THE B ANK STATEMENT OF THE ASSESSEE TRUST WHICH HAS ALREADY B EEN FILED ALONG-WITH OUR REPLY DATED 29 AUGUST 2018, WH EREIN THE SALE PROCEEDS OF THE SHARES SOLD DURING THE YEA R WERE RECEIVED. ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 12 I) WITH REFERENCE TO YOUR GOOD-SELFS NOTING THAT T HERE IS A CONTRADICTION BETWEEN THE REPLY OF THE ASSESSEE G IVEN AT SERIAL NUMBER 4 OF ITS LETTER DATED 29 AUGUST 2018 AND THE TRIAL BALANCE AS FILED BEFORE YOUR GOOD-SELF, WE HU MBLY SUBMIT THAT YOUR GOOD-SELF HAS NOT RIGHTLY CONSIDER ED THE CONTENTS OF THE TRIAL BALANCE/PROFIT & LOSS A/C AND COMPUTATION OF INCOME ON THE BASIS OF WHICH TAX IS PAID. THE INDIRECT EXPENSES OF RS.5,34,807.58, HAVE BEEN BOOKED TO THE DEBIT OF THE P&L ACCOUNT AS PLACED ON RECORD ONLY FOR THE ACCOUNTING PURPOSE AND MAINLY CONSISTS OF ADVANCE TAX, TDS AND SELF ASSESSMENT TAX TO THE TUN E OF RS.5,40,082/- DMAT EXPENSES OF RS.5,725.58 AND BANK CHARGES OF RS.229/-. AS PER THE ACCOUNTING PRINCIPL ES ANY EXPENDITURE WITH AN ALLOWABLE UNDER THE INCOME TAX ACT, OR NOT, IS TO BE BOOKED TO THE DEBIT OF THE PROFIT AND LOSS ACCOUNT. THE BOOKING OF EXPENDITURE TO THE DEBIT OF THE P&L ACCOUNT DOES NOT NECESSARILY MEAN THAT THE SAME HAS BEEN CLAIMED BY THE ASSESSEE AS ALLOWABLE IN ITS COMPUTATION OF INCOME. NOW WE WOULD LIKE TO DRAW YOUR KIND ATTENTION TOWAR DS THE COMPUTATION OF INCOME OF THE ASSESSEE AS ALREADY PL ACED ON RECORD (COPY OF THE SAME IS AGAIN ENCLOSED HEREW ITH AS ANNEXURE 3 FOR YOUR READY REFERENCE). FROM THE SAID COMPUTATION OF INCOME YOUR GOOD-SELF WILL NOTICE TH AT ASSESSEE HAS SHOWN A GROSS TOTAL INCOME OF RS.21,08 ,267/- IN ITS COMPUTATION WHEREAS THE TAXABLE INCOME CREDI TED TO THE PROFIT AND LOSS ACCOUNT IS RS.21,08,737/-, THE DIFFERENCE OF RS.470/- (21,08,737-21,08,267) IN BOT H THE ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 13 INCOMES PERTAINS TO THE AMOUNT OF INCOME TAX REFUND WHICH IS NOT TAXABLE UNDER THE INCOME TAX ACT. THIS FACT IS APPARENT FROM THE TRIAL BALANCE OF THE ASSESSEE TRU ST ALREADY FILED ALONG-WITH OUR REPLY DATED 29 AUGUST 2018. FURTHER, THE PROFIT AND LOSS ACCOUNT OF THE ASSESSE E TRUST ALSO DEPICTS AN NON-TAXABLE INCOME OF RS.65,24,465/ -, WHICH IS AGAIN SHOWN AT THE BOTTOM OF THE COMPUTATI ON OF INCOME UNDER THE HEAD INCOME CLAIMED EXEMPT. FROM THE ABOVE, IT IS CLEAR THAT FOR THE PURPOSE OF FILING OF THE INCOME TAX RETURN AND CALCULATING THE TAX PAYAB LE BY THE ASSESSEE THE INDIRECT/TAXABLE EXPENSES OF RS.5,34,807.58 HAVE NOT BEEN TAKEN INTO ACCOUNT. HE NCE, THE EARLIER SUBMISSION OF THE ASSESSEE THAT IT HAS NOT CLAIMED ANY EXPENDITURE IN ITS COMPUTATION OF INCOM E IS CORRECT AS PER THE FACTS OF THE CASE AND THE ITR & COMPUTATION OF INCOME AS FILED BEFORE YOUR GOOD-SEL F. IN VIEW OF THE ABOVE, NO ADVERSE INFERENCE IS REQUI RED TO BE DRAWN ON THIS ISSUE AS THERE IS NO INCONSISTENCY BETWEEN THE FACTS OF THE CASE AND THE ASSESSEE'S RE PLY. J) THE DEEMED CONTRADICTION IN YOUR QUERY NUMBER 5 OF THE NOTICE DATED 27 TH AUGUST 2018 AND THE ASSESSEE'S REPLY AT POINT NUMBER 5 OF ITS REPLY DATED 29 TH AUGUST 2018 STANDS EXPLAINED AT POINT NO. I), HEREINABOVE. AT POINT NU MBER I) IT HAS BEEN EXPLAINED IN DETAIL THE DIFFERENCE BETW EEN THE AMOUNT DEBITED IN THE P&L ACCOUNT AND CLAIM OF EXPENDITURE MADE IN THE COMPUTATION OF INCOME. FROM THE SAID EXPLANATION IT IS CLEAR THAT THE ASSESSEE HAS NOT CLAIMED ANY DEDUCTION OF SELF-ASSESSMENT TAX AS EXP ENSES ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 14 IN ITS COMPUTATION OF INCOME HENCE THERE IS NO CONTRADICTION IN THE REPLY OF THE ASSESSEE AND QUER Y RAISED BY YOUR GOOD- SELF. IN CASE YOUR GOOD-SELF FINDS AN Y CLAIM OF SUCH EXPENSES AS THE ASSESSEE'S ITR, THE SAME MA Y KINDLY BE DISALLOWED. K) AS SUBMITTED HEREINABOVE, IT IS CLEAR THAT THE A SSESSEE TRUST WAS VERY WELL IN EXISTENCE DURING THE YEAR UN DER REFERENCE. THE LONG TERM CAPITAL GAIN WAS EARNED BY THE TRUST DURING THE MONTHS OF MAY AND JUNE, 2015 AND T HE BENEFICIARY WAS ENTITLED TO THE FUNDS OF THE TRUST AFTER 03.09.2015, HENCE THE ON THE DATE OF EARNING OF THE LTCG THE OWNERSHIP FOR THE SHARES WAS WITH THE ASSESSEE TRUST ONLY. HENCE THE DETAILS AS SOUGHT BY YOUR GOOD-SELF ARE IRRELEVANT FOR THE PRESENT CASE AND ARE NOT REQUIRE D TO BE FILED. L) AS SUBMITTED AT VARIOUS POINTS HEREINABOVE IT IS AGAIN SUBMITTED THAT THE ASSESSEE TRUST WAS VERY WELL IN EXISTENCE DURING THE YEAR UNDER REFERENCE AND NONE OF ITS ASSETS/INCOME WERE VESTED WITH ITS BENEFICIARY HENC E THE DETAILS AS SOUGHT BY YOUR GOOD-SELF ARE IRRELEVANT FOR THE PRESENT CASE AND ARE NOT REQUIRED TO BE FILED. M) THE ASSUMPTION ON THE BASIS OF WHICH YOUR GOOD-S ELF HAS RAISED THE PRESENT QUERY IS INCONSISTENT WITH T HE FACTS AND THE TRUST DEED OF THE ASSESSEE TRUST HENCE IS N OT RELEVANT IN THE PRESENT CASE. FURTHER, WE WOULD LIK E TO SUMMIT THAT THE COMMODITY TRADING WAS CARRIED ON BY THE ASSESSEE TRUST THROUGH ITS BROKER NAMELY M/S PK ENTERPRISES, AND NOT BY ITS BENEFICIARY I.E. MS. VA RNIKA ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 15 GUPTA. PHOTOCOPY OF THE STATEMENT OF ACCOUNT OF THE ASSESSEE AS APPEARING IN THE BOOKS OF ITS BROKER I. E. M/S P.K. ENTERPRISES, IS ENCLOSED HEREWITH AS ANNEXURE 4 IN SUPPORT OF THE SAME. THE FACT THAT THE INTEREST INCOME WAS EARNED BY THE ASSESSEE TRUST IS ALSO EVIDENT FROM THE FACT THAT T DS ON THE INTEREST EARNED AND DECLARED BY THE ASSESSEE WA S DEDUCTED ON ITS PAN AND IS DULY REFLECTED IN ITS FO RM 26AS, COPY OF WHICH IS ENCLOSED HEREWITH AS ANNEXURE 5. FURTHER, THE OBSERVATION OF YOUR GOOD-SELF THAT COM MODITY TRADING CAN MANDATE ONLY BE TAKEN ONLY ON THE RECOG NIZED STOCK EXCHANGE IS INCONSISTENT WITH THE LAW IN FORC E. HENCE, WE REQUEST YOUR GOOD-SELF TO KINDLY INTIMATE THE ASSESSEE WITH THE LAW UNDER WHICH YOUR GOOD-SELF HA S STATED THAT COMMODITY TRADING CAN ONLY BE DONE ON T HE RECOGNISED STOCK EXCHANGE AND THE LOCAL MARKET TRAD ING COMMONLY KNOWN AS TEJI MANDI IS ILLEGAL IN INDIA. IN ADDITION TO THE ABOVE THE SALE AND PURCHASE BILLS O F THE COMMODITY TRADING AS DONE BY THE BROKER OF THE ASSE SSEE TRUST ON BEHALF OF THE ASSESSEE ARE ENCLOSED HEREWI TH AS ANNEXURE 8 IN SUPPORT OF THE FACT THAT THE TRADING WAS DONE IN THE NAME OF THE ASSESSEE TRUST ONLY. N) DURING THE RELEVANT YEAR THE ASSESSEE HAS EARNED LONG- TERM CAPITAL GAIN EXEMPT U/S 10(38) OF THE ACT OF RS.65,24,465/- ON STT PAID SALE OF LISTED EQUITY SH ARES OF M/S CCL INTERNATIONAL LTD. THE DETAILS OF THE SAME ARE AS UNDER: ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 16 THE ASSESSEE HAD PURCHASED 25,000 EQUITY SHARES OF M/S CCL INTERNATIONAL LTD., FOR RS.10,00,000/-, ON 07.0 5.2013. COPY OF THE BILL OF THE SAME PROVIDING DETAILS OF T HE SELLER IS ENCLOSED HEREWITH AS ANNEXURE 7 ALONG-WITH THE CONFIRMATION FROM THE SELLER OF SHARES. THE PAYMENT OF THE SAID PURCHASE WAS MADE THROUGH PROPER BANKING CHANN ELS. COPY OF THE RELEVANT EXTRACT OF THE BANK STATEMENT OF THE ASSESSEE SHOWING THE SAID PAYMENT IS ENCLOSED HEREW ITH AS ANNEXURE 8. THE SAID EQUITY SHARES WERE SOLD IN DEMATERIALIZED FORM ON BOMBAY STOCK EXCHANGE, ON VARIOUS DATES DURING THE MONTHS OF APRIL 2015 TO JU NE 2015 I.E. DURING THE YEAR UNDER CONSIDERATION, FOR A TOTAL CONSIDERATION OF RS.75,24,465/- ON WHICH IT HAD EAR NED A EXEMPT LONG TERM CAPITAL GAIN OF RS.65,24,465/-. CO PY OF THE STATEMENT OF D-MAT ACCOUNT OF THE ASSESSEE MAINTAINED BY IT WITH M/S KOTAK SECURITIES LTD. IS ENCLOSED HEREWITH AS ANNEXURE 9. FURTHER, THE CONTRACT NOTES SHOWING DETAILS OF SAID SALE TRANSACTIONS ARE ENCLO SED HEREINABOVE AT SL. NO. C) AS ANNEXURE 2. FROM THE ABOVE DOCUMENTS THE SOURCE AND NATURE OF EXEMPT INCOME OF RS.65,24,465/- STANDS EXPLAINED AN D NO ADVERSE INFERENCE IS CALLED FOR ON THIS ISSUE. WE HOPE THAT YOUR GOOD-SELF WILL FIND THE ABOVE IN ORDER. WE REQUEST YOUR GOOD-SELF TO KINDLY TAKE THE ABOVE ON RECORD. 7. THUS, TO CONCLUDE AS PER THE TRUST DEED FILED BE FORE THE REVENUE AUTHORITIES, ALL THE TRUST PROPERTY INCLUDI NG ACCUMULATION IN THE FORM OF YEARLY INCOME AND OTHER CONDITIONS ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 17 AND ACCRETIONS TO THE TRUST PROPERTY SHALL VEST WIT H THE SOLE BENEFICIARIES NAMELY, VARNIKA GUPTA AFTER HER ATTAI NING 18 YEARS OF AGE OR WHICHEVER IS LATER AND SUBJECT TO CLAUSE 11 MENTIONED. WHEN THE TERM OF THE TRUST EXPIRES, ALL THE TRUST PROPERTY INCLUDING ALL ACCRETIONS UP TO THE DATE OF EXPIRY OF THE TERM SHALL BECOME THE SOLE PROPERTY OF THE BENEFICI ARIES WITH ALL THE RIGHTS OF OWNERSHIP, USE, POSSESSION AND DISPOS SESSION (CLAUSE 9 AT PAGE NO. 6 OF THE TRUST DEED). SINCE, THE DATE OF BIRTH OF VARNIKA GUPTA IS 03.09.1997, SHE COMPLETED THE AGE OF 18 YEARS ON 03.09.2015. HENCE, THE TRUST WAS IN EXI STENCE DURING THE ASSESSMENT YEAR 2016-17 BUT NOT AFTER 03 .09.2015. THE TRUST STANDS DISSOLVED OR EXTINGUISHED FROM 31. 03.2015. WHILE THE ENTIRE RECORDS ARE BEFORE THE REVENUE AUT HORITIES, THE LD. PCIT ISSUED A NOTICE TO VARNIKA RPG TRUST ON 15 .03.2021 WHICH EFFECTIVELY CULMINATING IN ISSUING OF A NOTIC E TO A NON- EXISTING AND EXPIRED TRUST. 8. IN THE CONTEXT OF THE ABOVE FACTS, THE MOOT QUER Y BEFORE US TO ADJUDICATE IS WHETHER THE NOTICE ISSUED BY THE LD. PCIT TO A DISSOLVED TRUST IS LEGALLY VALID OR NOT? 9. THE HONBLE MADHYA PRADESH HIGH COURT IN THE CAS E OF PRINCES USHA TRUST VS. CIT 144 ITR 808 WHEREIN ON A SIMILAR ISSUE, THE HONBLE COURT OBSERVED AND HELD AS UNDER : QUESTION NO. 2 - THE ANSWER TO THIS QUESTION TURNS ON THE CONSTRUCTION OF SECTION 77 OF THE INDIAN TRUSTS ACT . THAT PROVISION READS AS UNDER: 'A TRUST IS EXTINGUISHED (A) WHEN ITS PURPOSE IS COMPLETELY FULFILLED ; OR ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 18 (B) WHEN ITS PURPOSE BECOMES UNLAWFUL; OR (C) WHEN THE FULFILMENT OF ITS PURPOSE BECOMES IMPO SSIBLE BY DESTRUCTION OF THE TRUST PROPERTY OR OTHERWISE ; OR (D) WHEN THE TRUST, BEING REVOCABLE, IS EXPRESSLY R EVOKED.' NOW, IN THE INSTANT CASE, SMT. USHA DEVI HAD TRANS FERRED HER BENEFICIARY'S INTEREST IN THE TRUST PROPERTY TO THE EDUCATIONAL TRUST ON 18-12-1973. SUCH TRANSFER, AS WE HAVE OBSERVED, IS NOT HIT BY THE PROVISO TO SECTION 58 OF THE INDIAN TRUSTS ACT. SECTION 8 OF THE INDIAN TRUSTS ACT, WHICH PROVIDES THAT THE SUBJECT- MATTER OF A TRUST MUST NOT BE MERELY BENEFICIAL INTEREST UNDER A SUBS ISTING TRUST, IS ATTRACTED ONLY WHEN THE TRUST, WHICH IS CREATED, IS A PRIVATE TRUST. THAT PROVISION IS NOT ATTRACTED IN THE CASE OF AN E DUCATIONAL TRUST AS THE PROVISIONS OF THE INDIAN TRUSTS ACT ARE NOT APP LICABLE TO EDUCATIONAL TRUSTS. NO PROVISION OF LAW WAS BROUGHT TO OUR NOTICE, WHICH INVALIDATED THE TRANSFER OF SMT. USHA DEVI'S INTEREST IN THE TRUST PROPERTY IN FAVOUR OF THE EDUCATIONAL TRUST. AS REGARDS TRANSFER OF AN INTEREST BY A REMAINDERMAN, IT IS NOT HIT BY SECTION 6(A) OF THE TRANSFER OF PROPERTY ACT, AS THAT PROVISION IS ATTRACTED ONLY IN THE CASE OF A BARE OR NAKED POSSIBILITY AND NOT IN THE CASE OF A POSSIBILITY COUPLED WITH AN INTEREST SUCH AS THAT O F A REMAINDERMAN. THE INTEREST OF REMAINDERMAN, IN THE INSTANT CASE, COULD HOWEVER, BE VALIDLY TRANSFERRED ONLY AFTER OBTAINING PERMISS ION FROM THE COURT UNDER SECTION 8 OF THE HINDU MINORITY &GUARDI ANSHIP ACT, 1956, AS THE REMAINDERMEN WERE MINORS AT THE MATERI AL TIME. THE REQUISITE PERMISSION WAS ACCORDINGLY OBTAINED BY TH E GUARDIANS OF THE MINOR REMAINDERMEN FROM THE DISTRICT COURT, IND ORE. THE ITO HAD NO JURISDICTION TO DECIDE AS TO WHETHER THE DIS TRICT JUDGE SHOULD OR SHOULD NOT HAVE GRANTED SUCH PERMISSION. THE REM AINDERMAN'S INTEREST IN THE TRUST PROPERTY WAS THUS VALIDLY TRA NSFERRED BY THE DEED, DATED 30-3-1974. IN VIEW OF THESE TWO DEEDS, DATED 18-12- 1973 AND 30-3-1974, IT MUST BE HELD THAT THE BENEFI CIARY INTEREST IN THE TRUST PROPERTY OF THE ASSESSEE-TRUST WAS VAL IDLY TRANSFERRED TO ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 19 THE EDUCATIONAL TRUST AND, IN THESE CIRCUMSTANCES, THE FULFILMENT OF THE PURPOSE OF THE ASSESSEE-TRUST, WHICH WAS TO PAY THE NET RESIDUE OF THE RENTS, PROFITS, INTEREST AND OTHER INCOME OF THE TRUST PROPERTY TO SMT. USHA DEVI DURING HER LIFETIME AND ON HER DE ATH TO TRANSFER AND HAND OVER THE TRUST PROPERTY IN THE MANNER SPEC IFIED, TO HER CHILDREN, BECAME IMPOSSIBLE. SECTION 77 OF THE INDI AN TRUSTS ACT PROVIDES THAT A TRUST IS EXTINGUISHED WHEN THE FULF ILMENT OF ITS PURPOSE BECOMES IMPOSSIBLE BY DESTRUCTION OF THE TR UST PROPERTY OR OTHERWISE. THE EXPRESSION 'OTHERWISE' WOULD COVER A CASE WHERE THE TRUST PROPERTY IS NOT AVAILABLE FOR FULFILMENT OF I TS PURPOSE BECAUSE ALL THE BENEFICIARIES UNDER A TRUST HAVE VALIDLY TR ANSFERRED THEIR INTEREST. IN THESE CIRCUMSTANCES, THE ASSESSEE-TRUS T MUST BE HELD TO HAVE BEEN EXTINGUISHED AND THE TRIBUNAL WAS NOT JUSTIFIED IN HOLDING THAT THE ASSESSEE-TRUST WAS NOT EXTINGUISHE D WITHIN THE MEANING OF SECTION 77 OF THE INDIAN TRUSTS ACT. OUR ANSWER TO QUESTION NO. 2 IS IN THE NEGATIVE AND AGAINST THE R EVENUE. 10. HENCE, THE ORDER OF THE LD. PCIT ISSUING NOTICE TO AN EXTINGUISHED TRUST IS ILLEGAL AND IT IS NOT A PROCE DURAL IRREGULARITY WHICH CAN BE CURED U/S 292B. THIS PREC ISE ISSUE HAD COME UP FOR CONSIDERATION BY THE HONBLE SUPREME CO URT IN THE CASE OF PR. CIT VS. MARUTI SUZUKI INDIA LTD. (2019) 107 TAXMANN.COM 375 WHEREIN HONBLE SUPREME COURT AFTER CONSIDERING THE VARIOUS JUDGMENTS OF HONBLE DELHI HIGH COURT IN THE CASE OF SKY LIGHT HOSPITALITY LLP VS. ACIT ( 2018) 92 TAXMANN.COM 93 (SC) AND CATENA OF OTHER JUDGMENTS H AVE CONCLUDED THAT ANY ORDER PASSED IN THE NAME OF NON EXISTING COMPANY, I.E., AMALGAMATED COMPANY WHICH HAS CEASED TO EXIST AS A RESULT OF APPROVED SCHEME OF AMALGAMATION IS A SUBSTANTIVE ILLEGALITY WHICH IS NOT CURABLE IN TERM S OF SECTION 292B. IN THAT CASE M/S SUZUKI POWER TRAIN INDIA LI MITED WAS ITA NOS. 451, 452 & 453/DEL/2021 VARNIKA, BHAVYA & DHRUV RPG TRUST 20 AMALGAMATED WITH M/S MARUTI SUZUKI INDIA LIMITED BY THE ORDER OF HONBLE HIGH COURT W.E.F. 1 ST APRIL 2012 VIDE ORDER DATED 29 TH JANUARY 2013. THE AO WAS INFORMED ON 2 ND APRIL 2013. AO STILL ISSUED NOTICE TO THE ERSTWHILE COMPANY, SUZUKI POWE RTRAIN INDIA LIMITED AND BELOW IT MENTIONED NOW KNOWN AS M/S. MA RUTI SUZUKI INDIA LTD. AND FINAL ASSESSMENT ORDER WAS PA SSED IN THE NAME OF M/S. SUZUKI POWERTRAIN INDIA LIMITED (AMAL GAMATED WITH MARUTI SUZUKI INDIA LIMITED). 11. ACCORDINGLY, WE FIND THAT IN THE INSTANT CASE A LSO, THE REVENUE HAS BEEN DULY INFORMED ABOUT THE DISSOLUTIO N OF THE TRUST AND STILL CHOSE TO CONTINUE THE PROCEEDING ON THE DISSOLUTED ENTITY WHICH WAS NO MORE IN EXISTENCE. H ENCE, FOLLOWING THE AFORESAID RATIO AND PRINCIPLE LAID DO WN BY THE HONBLE HIGH COURT AND THE HONBLE APEX COURT, WE H OLD THAT IMPUGNED ORDER PASSED BY THE PR. CIT IN THE NAME OF VARNIKA RPG TRUST IS A SUBSTANTIVE ILLEGALITY AND NOT A PR OCEDURAL VIOLATION OF THE NATURE ADVERTED TO IN SECTION 292B AND HENCE ORDER PASSED ON NON-EXISTENT ENTITY IS A NULLITY. A CCORDINGLY, IMPUGNED ORDER U/S 263 IS QUASHED AT THE OUTSET ON THE JURISDICTIONAL ISSUE. 12. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/09/2021. SD/- SD/- (AMIT SHUKLA) (DR. B. R. R. KUMAR) JUDICIAL MEMBER AC COUNTANT MEMBER DATED: 09/09/2021 *SUBODH KUMAR, SR. PS*