B B M B WELFARE SOCIETY,CHANDIGARH V. INCOME TAX OFFICER, EXEMPTIONS WARD, CHANDIGARH

ITA 732/CHANDI/2024

AI Insights

The case involves the BBMB Welfare Society, which appealed against the order of the Commissioner of Income Tax (Appeals) that upheld the Assessing Officer's decision to charge the society at the maximum marginal rate of tax for the assessment year 2019-20. The society argued that it should be assessed under Section 11 of the Income Tax Act, applicable to charitable institutions, rather than under Section 164(3), which was incorrectly applied by the CIT(A). The Tribunal agreed with the society's position, noting that the provisions of Section 164 were not applicable, and directed a reassessment under the correct legal framework.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298531 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2019-2020
• Laws Referred To: Income Tax Act, Societies Registration Act, 1860
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN
• Assessee Lawyers: RAMESH TREHAN
• Keywords: Set aside; Charitable institution; Maximum Marginal Rate
• Section: 11; 12A

Judgement Text

"आयकर अपील य अ धकरण,च\u0010डीगढ़ \u0014यायपीठ, च\u0010डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, “SMC” CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER आयकर अपील सं./ITA No.732/CHD/2024 नधा\u000fरण वष\u000f / Assessment Year : 2019-20 BBMB Welfare Society, Plot No. 6, BBMB Building, Sector 19, Chandigarh. Vs The ITO (Exemptions), Ward, Chandigarh. \u0013थायीलेखासं./PAN NO: AAATB7380E अपीलाथ\u0017/Appellant \u0019\u001aयथ\u0017/Respondent नधा\u000f\u001bरती क ओर से/Assessee by: Shri Ramesh Trehan, C.A. राज\u0013व क ओर से/ Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr.DR सुनवाई क तार\"ख/Date of Hearing : 16.04.2025 उदघोषणा क तार\"ख/Date of Pronouncement : 17.04.2025 PHYSICAL HEARING आदेश/Order The present appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals [in short referred to as CIT(A)] dated 29.04.2024 relating to assessment year 2019-20. 2. The assessee in this appeal is aggrieved by the action of the CIT(A) in upholding the action of the ITA No. 732/Chd-2024 A.Y. 2019-20 2 Assessing Officer of charging the assessee Trust/Society at maximum marginal rate of tax. 3. A perusal of the impugned order of the CIT(A) revealed that the ld. CIT(A) has relied upon the provision of Section 164(3) of the Act by treating the assessee Society as assessable in a representative capacity and where the shares of the beneficiaries of income were in- determinate. 4. The ld. Counsel for the assessee, however has demonstrated that the provisions of said Section 164 of the Act were not applicable in the case of the assessee. That the assessee is a Society registered under Societies Registration Act, 1860 and has also been registered as a charitable institution under Section 12A of the Income Tax Act. That the provisions of Section 164 were not applicable in the case of the assessee, rather the assessee is liable to be assessed as per the provisions of Section 11 of the Income Tax Act as applicable to the charitable institutions registered under Section 12A of the Income Tax Act. ITA No. 732/Chd-2024 A.Y. 2019-20 3 5. The ld. DR could not rebut the aforesaid facts on the file. 6. In view of this, the impugned order of the CIT(A) is set aside and the matter is restored to the Assessing Officer with a direction to assess the income of the assessee by treating the assessee as a Society which has been registered under Societies Registration Act as well as, as a charitable institution under Section 12A of the Income Tax Act and by applying provisions/deductions as admissible under section 11 of the Income Tax Act. 7. The appeal of the assessee is treated as allowed for statistical purposes. Order pronounced on 17 t h April, 2025. Sd/- ( SANJAY GARG) \u0014या\u0017यक सद\u001aय/ Judicial Member “Poonam.” आदेश क \u0019 त)ल*प अ+े*षत/ Copy of the order forwarded to : 1. अपीलाथ\u0017/ The Appellant 2. \u0019\u001aयथ\u0017/ The Respondent 3. आयकर आयु,त/ CIT 4. आयकर आयु,त (अपील)/ The CIT(A) 5. *वभागीय \u0019 त न/ध, आयकर अपील\"य आ/धकरण, च1डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड\u000fफाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar "