Discretionary trust - Income - Reassessmemt within 16 Years.
*Discretionary trust- bank balance in bank account held abroad- Reassessment notice u/s 148 following sixteen years time period- quashed by Calcutta ITAT.*
The Calcutta Bench of ITAT in the case of *Manoj Dhupelia Vs DCIT , Central Circle-III on 15/6/20 * was dealing with a case of an assessee where notice u/s 148 was issued taking benefit of 16 years which is allowed for reopening of assessment in case of foreign income is found to have escaped assessment. The income in question was said to be the 1/5th share of a bank account held abroad. At the outset , two additional legal grounds which were taken were vehemently opposed by the department and the opposition was rightly rejected by the ITAT that legal grounds can be taken at any stage of proceedings based on the decision of the Apex Court in the case of NTPC. Finally, the reassessment was quashed interalia on the ground that even assuming that there was a bank balance in the hands of the trust, it cannot be said that the assessee being a beneficiary was entitled to that money since a beneficiary of a discretionary trust has no right until the benefit is actually declared. The landmark apex court decision in the case of Kamalani Khatau was relied upon besides the famous constitutional bench decision in the case of Calcutta discount 41 ITR .