Ajay Balvantray Parekh Vs DCIT (ITAT Mumbai)
Summary: The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, in the case of Ajay Balvantray Parekh vs DCIT, pronounced on 28 October 2025, examined whether income distributed by a private discretionary trust, which had already paid tax on such income, could again be taxed in the hands of its beneficiary. The Tribunal held that a beneficiary cannot be taxed again on income that has already suffered tax in the hands of the trust and accordingly deleted the addition of ₹1.24 crore made by the Assessing Officer (AO).
Background
The assessee, Ajay Balvantray Parekh, filed an appeal against the order of the Commissioner of Income Tax (Appeals) [CIT(A)]/National Faceless Appeal Centre (NFAC), Delhi, dated 17 October 2024 for Assessment Year (AY) 2020–21. The appeal arose from an assessment order passed under Section 143(3) read with Section 144B of the Income-tax Act, 1961 (“the Act”).
The assessee challenged the order on several grounds, including:
1. The assessment order was time-barred under Section 144B read with Section 144C.
2. No fair opportunity of hearing was provided.
3. Addition of ₹1,24,56,045 received from SANMP Private Beneficiary Trust (“SANMP”) as income.
4. Non-grant of credit of ₹74,000 tax paid on regular assessment.
5. Levy of interest under Sections 234A and 234B.
Facts of the Case
