Rotary Club of Hyderabad Service Trust, Hyderabad V. Income Tax Officer, Ward-11(1), Hyderabad

ITA 1144/Hyd/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6072 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2016-2017
• Appeal Filed On: 15-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KIRAN KATTA
• Keywords: Charitable institution; Maximum Marginal Rate

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES SMC, HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER I.T.A. NO. 1144/HYD/2019 ASSESSMENT YEAR: 2016-17 ROTARY CLUB OF HYDERABAD SERVICE TRUST, HYDERABAD [PAN: AABTR9060L] VS THE INCOME TAX OFFICER, WARD-11(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SHRI KIRAN KATTA, DR DATE OF HEARING : 17-09-2020 DATE OF PRONOUNCEMENT : 29-09-2020 O R D E R THIS IS ASSESSEES APPEAL FOR THE AY.2016-17, DIRECT ED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)5, HYDERABAD, DATED 13-05-2019, CONFIRMING THE MAXIMUM MARGINAL RATE OF TAX IMPOSED BY THE CPC ON THE ASSESSEE. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CHARITABLE TRUST, NOT COVERED BY THE EXEMPTION U/S.12A OF THE INCOME TAX ACT [ACT], HAD FILED ITS RETURN OF INCOME BE LATEDLY ON 06-03-2018 U/S.139(4A) OF THE ACT. THE CPC HAS PR OCESSED THE RETURN FILED BY THE ASSESSEE AND LEVIED TAX AT MAXIM UM MARGINAL RATE. THE ASSESSEE FILED ITS APPLICATION U/S .154, STATING THAT THE ASSESSEE SHOULD BE TAXED AT THE NORMAL R ATES AND NOT AT THE MAXIMUM RATE. THE CPC, HOWEVER, DISMISS ED ITA NO. 1144/HYD/2019 :- 2 -: THE SAID APPLICATION, AGAINST WHICH, THE ASSESSEE FILE D AN APPEAL BEFORE THE CIT(A). THE CIT(A), HOWEVER, CONF IRMED THE ORDER OF THE CPC BY HOLDING THAT - THE ASSESSEE IS CHARGEABLE AT MAXIMUM MARGINAL RATE AND IS NOT ELIGIBLE FOR BA SIC EXEMPTION U/S.167B OF THE ACT . AGAINST THIS ORDER OF THE CIT(A), THE ASSESSEE PREFERRED THIS APPEAL BEFORE THE TRIBUNAL , RAISING THE FOLLOWING GROUNDS: 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME -TAX (APPEALS) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN HOLDING THAT TAX IS LEVIABLE AT THE MAXIMUM MARGINAL RATE W ITHOUT ALLOWING DEDUCTION OF THE BASIC EXEMPTION OF RS.2,50,000/-. 3. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME O F HEARING. 3. THE CASE IS TAKEN UP FOR HEARING ON 17-09-2020 THR OUGH VIDEO CONFERENCING AND BOTH THE PARTIES WERE HEARD. 4. LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE RETURN OF INCOME OF THE ASSESSEE WAS PROCESSED U/S.143(1) OF TH E ACT, WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSEE AS TO WHY IT SHOULD NOT BE CHARGED AND THAT THE ASSESSEES APPLICATI ON U/S.154 OF THE ACT HAS BEEN REJECTED BY A SINGLE LINE , AGAIN WITHOUT GIVING ANY OPPORTUNITY TO THE ASSESSEE. IT IS SU BMITTED THAT EVEN THE CIT(A) HAS NOT CONSIDERED ASSESSEES OBJE CTIONS AND HAS MERELY APPLIED THE PROVISIONS OF SECTION 16 7B AND164(2) OF THE ACT. HE HAS ALSO DRAWN MY ATTENTION TO B OTH THE PROVISIONS TO ARGUE THAT THE SAID PROVISIONS ARE NO T APPLICABLE TO THE ASSESSEE. ITA NO. 1144/HYD/2019 :- 3 -: 5. LD.DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF TH E AUTHORITIES BELOW. 6. HAVING REGARD TO THE RIVAL CONTENTIONS AND MATERIAL ON RECORD, I FIND THAT THE CPC HAS APPLIED THE MAXIMUM MA RGINAL RATE OF TAX, WITHOUT EXAMINING WHETHER THE ASSESSEE IS LIABLE TO BE CHARGED UNDER THE SAID SECTION OR NOT. EVEN WHEN THE ASSESSEE HAS FILED THE APPLICATION U/S.154 OF THE ACT, THE CPC HAS NOT GIVEN ANY OPPORTUNITY TO THE ASSESSEE AND THE C IT(A) ALSO HAS CONFIRMED THE RATE OF TAX. THEREFORE, IN THE I NTEREST OF JUSTICE, I DEEM IT FIT AND PROPER TO REMIT THE ISSUE TO THE FILE OF AO TO DO THE ASSESSMENT U/S.143(3) OF THE ACT AND APPLY THE RATE OF TAX AS IS APPLICABLE TO THE CASE OF THE ASSESSEE IN ACCORDANCE WITH LAW. NEEDLESS TO MENTION THAT ASSESSEE SHOULD BE GIVEN A FAIR OPPORTUNITY OF HEARING. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH SEPTEMBER, 2020 SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED: 29-09-2020 TNMM ITA NO. 1144/HYD/2019 :- 4 -: COPY TO : 1. ROTARY CLUB OF HYDERABAD SERVICE TRUST, 12-5-32/ 5 & 6, MARRI SADAN, VIJAYAPURI, LALLAGUDA, SECUNDERABAD. 2. THE INCOME TAX OFFICER, WARD-11(1), HYDERABAD. 3. CIT(APPEALS)-5, HYDERABAD. 4. PR.CIT-5, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.