Document Fragment View
Fragment Information
Showing contexts for: dissolution of trust in The Chamber Of Tax Consultants vs The Commissioner Of Income Tax ... on 9 March, 2026Matching Fragments
MARCH 09, 2026 S.R.JOSHI 1-wpl-7587-2026.doc i. The assertion in the petition that revocability of a trust implies a dissolution of trust, is entirely misplaced and misleading. They are entirely two different things. Whereas revocability of a trust can be even partial with respect to the income or assets of a trust, dissolution implies complete loss of identity of the trust.
MARCH 09, 2026 S.R.JOSHI 1-wpl-7587-2026.doc
32. It would be pertinent to refer to the decision of this Court in CIT vs. Tara Educational & Charitable Trust (Income Tax Appeal No. 247 of 2015), as relied upon by the Petitioners, wherein this Court vide its judgement dated 31.07.2017 has held as follows:
"4 The registration of the Trust has to be done on compliance of the provisions of Section 12AA of the Act. The authority is required to consider the genuineness of the activities of the Trust and the section does not lay down that unless and until the clause of dissolution of the Trust is incorporated in the Trust Deed, the Trust cannot be registered.
5 The statute takes care of the apprehension as is shown by the Director of Income Tax (Exemptions). The authority has observed that in case the objects / activities of the Trust cannot be carried out and it has to be dissolved, the corpus and properties remain on the date of the dissolution transferred. The absence of the clause of dissolution in the Trust Deed would be in no manner an impediment in the operation of the statute. Section 55 of the Maharashtra Public Trust Act takes care of such contingency. The Tribunal in its order has considered the scope of Section 12A of the Act and has rightly passed the order."
34. In this connection, one may profitably refer to the reply of the Ministry of Finance, to the Public Accounts Committee, as brought out in paragraph 20 of the report, which is reproduced hereunder:
"The Office Manual on the basis of which this objection is purportedly raised only states that it should be ensured that in case of dissolution the trust assets do not revert to funder's account. It does not stipulate that dissolution clause be insisted upon. However, such dissolution clause is generally being insisted upon since under the Indian Trust Act, the Trust can be dissolved and there is no bar on the assets reverting to the founder account.