I declared my interest in a foreign discretionary trust under s.59 and the assessment accepted it. Can the Principal Director now revise that order?
Not where the point was examined at the assessment stage. The Tribunal set aside a revision under s.23 of the Black Money Act, holding that an order passed after due enquiry and verification is neither erroneous nor prejudicial to the interest of the Revenue within s.23(2) and cannot be called prejudicial under s.23(9). It also records the valuation route for a beneficiary's interest in a foreign trust: the trust's assets are valued as an association of persons under Rule 3(1)(g), with the shares held by the trust valued first under Rule 3(1)(c).
Decided by the ITAT (Dr. B.R.R. Kumar, Vice President and Shri Siddhartha Nautiyal, Judicial Member) on 2026-01-19, reported as BMA Nos. 1 and 2/Ahd/2025, assessment year 2021-22. It bears on section BMA s.23, section BMA s.23(2), section BMA s.23(9), section BMA s.10(3), section BMA s.59, section BMA Rule 3(1)(c), section BMA Rule 3(1)(g), section Circular No. 15 of 2015 of the Income Tax Act 1961, in Revision & Rectification, Charitable Trusts & Exemption, Assessment & Scrutiny and How Tax Law Is Read matters.
It is the only located decision on the revisionary power in s.23 of the Black Money Act, and the only one that works through the Rule 3 chain for a trust interest. Anyone who used the s.59 compliance window and is now facing a s.23 notice years later needs it.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee was one of three beneficiaries of the Nutshel Trust, established in Jersey on 3 December 1990 by his late father Navnitlal Chandulal Parikh. On 29 September 2015 he filed a declaration in Form 6 under s.59 of the Black Money Act declaring undisclosed foreign assets of Rs 8,55,63,192, being one third of the trust's assets of Rs 25,66,89,500 (GBP 2,569,635) as valued under Rule 3(1)(c). The Commissioner approved the declaration on 27 October 2015 and the assessee paid tax of Rs 2,56,68,960 and an equal penalty. On 2 May 2022 the DDIT passed an order under s.10(3) accepting the return. On 30 March 2025 the Principal Director initiated revision under s.23, alleging further capital distributions from the trust and undisclosed United Kingdom properties held through Silver Spire Incorporated, aggregating Rs 19,91,57,557 said to have escaped assessment. Two appeals, by husband and wife, were heard together.
Both appeals were allowed. The Tribunal held that the order of the DDIT is neither erroneous nor prejudicial to the interest of the Revenue as required by s.23(2), and that an order passed after due enquiries and verifications cannot be termed prejudicial under s.23(9) of the Black Money Act (paras 35 and 36). The revision was accordingly set aside.
The Tribunal found that the issue raised by the Principal Director had been examined at length by different DDITs at different points of time and that the explanation offered had been accepted, so that it was not open to the Department to invoke the revisionary jurisdiction over a matter already enquired into (paras 28 to 35). On the alleged distributions, it recorded that the trust minutes covering the period from 9 December 1990 to 24 May 2020 were missing from the record and that minutes redrawn in 2007 without the assessee's involvement could not found an allegation that he had received amounts, especially when enquiries had already been made. It recorded the assessee's consistent claim that he held no foreign bank accounts beyond those declared and that the Revenue produced no evidence to the contrary. On valuation, the Tribunal set out the chain under the Rules and referred to the Board's Circular No. 15 of 2015 for the position that assets of a trust declared under Chapter VI on which tax and penalty have been paid are not chargeable again when distributed to the beneficiaries (paras 26 and 33).
the order of the DDIT is neither erroneous nor prejudicial to the interest of the Revenue as per Section 23(2)
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Handle my notice → Ask a CA on WhatsAppNot where the point was examined at the assessment stage. The Tribunal set aside a revision under s.23 of the Black Money Act, holding that an order passed after due enquiry and verification is neither erroneous nor prejudicial to the interest of the Revenue within s.23(2) and cannot be called prejudicial under s.23(9). It also records the valuation route for a beneficiary's interest in a foreign trust: the trust's assets are valued as an association of persons under Rule 3(1)(g), with the shares held by the trust valued first under Rule 3(1)(c). This was decided by the ITAT (Dr. B.R.R. Kumar, Vice President and Shri Siddhartha Nautiyal, Judicial Member) and bears on section BMA s.23, section BMA s.23(2), section BMA s.23(9), section BMA s.10(3), section BMA s.59, section BMA Rule 3(1)(c), section BMA Rule 3(1)(g), section Circular No. 15 of 2015 of the Income Tax Act 1961. It is reported as BMA Nos. 1 and 2/Ahd/2025, assessment year 2021-22. It is the only located decision on the revisionary power in s.23 of the Black Money Act, and the only one that works through the Rule 3 chain for a trust interest. Anyone who used the s.59 compliance window and is now facing a s.23 notice years later needs it. If it applies to you, the first step is this: Put on record every enquiry the Assessing Officer or the DDIT made on the point the Principal Director now says was not examined, with the replies filed and their dates.
The assessee was one of three beneficiaries of the Nutshel Trust, established in Jersey on 3 December 1990 by his late father Navnitlal Chandulal Parikh. On 29 September 2015 he filed a declaration in Form 6 under s.59 of the Black Money Act declaring undisclosed foreign assets of Rs 8,55,63,192, being one third of the trust's assets of Rs 25,66,89,500 (GBP 2,569,635) as valued under Rule 3(1)(c). The Commissioner approved the declaration on 27 October 2015 and the assessee paid tax of Rs 2,56,68,960 and an equal penalty. On 2 May 2022 the DDIT passed an order under s.10(3) accepting the return. On 30 March 2025 the Principal Director initiated revision under s.23, alleging further capital distributions from the trust and undisclosed United Kingdom properties held through Silver Spire Incorporated, aggregating Rs 19,91,57,557 said to have escaped assessment. Two appeals, by husband and wife, were heard together. The matter was decided on 2026-01-19 by the ITAT (Dr. B.R.R. Kumar, Vice President and Shri Siddhartha Nautiyal, Judicial Member). On those facts the ITAT held as follows. Both appeals were allowed. The Tribunal held that the order of the DDIT is neither erroneous nor prejudicial to the interest of the Revenue as required by s.23(2), and that an order passed after due enquiries and verifications cannot be termed prejudicial under s.23(9) of the Black Money Act (paras 35 and 36). The revision was accordingly set aside.
The Tribunal found that the issue raised by the Principal Director had been examined at length by different DDITs at different points of time and that the explanation offered had been accepted, so that it was not open to the Department to invoke the revisionary jurisdiction over a matter already enquired into (paras 28 to 35). On the alleged distributions, it recorded that the trust minutes covering the period from 9 December 1990 to 24 May 2020 were missing from the record and that minutes redrawn in 2007 without the assessee's involvement could not found an allegation that he had received amounts, especially when enquiries had already been made. It recorded the assessee's consistent claim that he held no foreign bank accounts beyond those declared and that the Revenue produced no evidence to the contrary. On valuation, the Tribunal set out the chain under the Rules and referred to the Board's Circular No. 15 of 2015 for the position that assets of a trust declared under Chapter VI on which tax and penalty have been paid are not chargeable again when distributed to the beneficiaries (paras 26 and 33). In the words reproduced by the source cited on this page: "the order of the DDIT is neither erroneous nor prejudicial to the interest of the Revenue as per Section 23(2)"
It was decided by the ITAT on 2026-01-19 and is reported as BMA Nos. 1 and 2/Ahd/2025, assessment year 2021-22. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section BMA s.23, section BMA s.23(2), section BMA s.23(9), section BMA s.10(3), section BMA s.59, section BMA Rule 3(1)(c), section BMA Rule 3(1)(g), section Circular No. 15 of 2015, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. Both appeals were allowed. The Tribunal held that the order of the DDIT is neither erroneous nor prejudicial to the interest of the Revenue as required by s.23(2), and that an order passed after due enquiries and verifications cannot be termed prejudicial under s.23(9) of the Black Money Act (paras 35 and 36). The revision was accordingly set aside. It arises in Revision & Rectification, Charitable Trusts & Exemption, Assessment & Scrutiny and How Tax Law Is Read matters, on section BMA s.23, section BMA s.23(2), section BMA s.23(9), section BMA s.10(3), section BMA s.59, section BMA Rule 3(1)(c), section BMA Rule 3(1)(g), section Circular No. 15 of 2015 of the Income Tax Act 1961, and was decided by Dr. B.R.R. Kumar, Vice President and Shri Siddhartha Nautiyal, Judicial Member. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Meet s.23(9) squarely: an order passed after due enquiry and verification is not prejudicial merely because the Principal Director would have valued differently. For a beneficiary's interest in a foreign trust, value the trust's assets under Rule 3(1)(g) as for an association of persons, valuing any shares the trust holds under Rule 3(1)(c) first. Keep the Form 6 declaration under s.59, the Commissioner's approval and the proof of tax and penalty paid together; they are the answer to a later charge on distributions.
Searched for later treatment; none was found. That is not the same as a source affirming it. The order is of January 2026 and searches located no later decision applying or doubting it, and no appeal to the Gujarat High Court against it. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The two readings of the order differ slightly on paragraph numbering at the end, one placing the conclusion at para 35 and the result at para 36 and the other running them together at para 36; the substance is identical and is cited here as paras 35 to 36. The passage on Rule 3(1)(g) and Rule 3(1)(c) and the passage from Circular No. 15 of 2015 are set out in the Tribunal's discussion of the material before the DDIT rather than as a separate ruling on valuation, so the valuation chain is described in the order rather than decided as a contested question. The total value of the trust's assets is given as Rs 25,66,89,577 in one place and Rs 25,66,89,500 in another. A later reading found that the sentence first used as the key quote - that the assets of the trust shall be valued under Rule 3(1)(g) as in the case of an association of persons - is verbatim but sits inside the Tribunal's reproduction of the Board's Circular No. 15 of 2015 in para 33 and is not the Bench's own proposition; the quote has been replaced with the Bench's own words from para 35, and the reasoning, which the same reading confirmed against paras 26, 33, 35 and 36, is unaffected. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
Both appeals were allowed. The Tribunal held that the order of the DDIT is neither erroneous nor prejudicial to the interest of the Revenue as required by s.23(2), and that an order passed after due enquiries and verifications cannot be termed prejudicial under s.23(9) of the Black Money Act (paras 35 and 36). The revision was accordingly set aside.
TaxSphere, “Chintan Navnitlal Parikh v PDIT (Inv)”, https://taxnotice.vittsphere.com/caselaw/case/chintan-parikh-v-pdit-bma-23-revision-trust-valuation/ (validity last checked 2026-09-16)
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