Exemption u/s 54EC can be availed by a Trust even if investments in the prescribed bonds are made in the name of trustees/beneficiaries of the trust:

AO denied deduction u/s 54EC to the appellant trust on the count that investments in the bonds of RECL were made in the name of the trustees/beneficiaries of the trust and not in the name of the assessee-trust. Hon’ble ITAT observed that the assessee-trust was settled in accordance with the directions of Will of Late Shri Popatlal N. Vora to hold and administer his properties and assets. As per one of the clause of the Trust Deed, the period of distribution of the corpus of the trust was 18 years from the death of Late Shri Popatlal N. Vora. Lock-in-period for investments prescribed u/s 54EC is 3 years. Since the period of three years from date of investment in bonds of RECL ended beyond the period of 18 years (as mentioned above) at the end of which the corpus was to be distributed, it was decided to make the said investment in RECL bonds in the name of the trustees/beneficiaries of the assessee-trust. Following the view taken in the case of “ITO vs. Smt. Saraswati Ramanathan – 116 ITD 234 (Delhi)”, the Hon’ble ITAT extended wider and liberal interpretation to the term “assessee” used u/s 54EC and held that the assessee-trust was rightly eligible for exemption u/s 54EC even if the investment in the prescribed bonds has been made in the names of trustees/beneficiaries of the assessee-trust.

[Popatlal N. Vora Inheritance Trust vs. ITO – ITA No.2365/Ahd/2010]