Shree Surat Gandhi Mahajan Association, Surat V. The ITO, Ward 2(3) (8), Surat

ITA 1750/AHD/2017

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1789 (ITAT-SURAT)
• Duration Of Justice: 5 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 31-07-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 17-07-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MEHUL K PATEL
• Keywords: Maximum Marginal Rate
• Section: 154

Judgement Text

आयकर अपीलȣय अͬधकरण, स ु रत Ûयायपीठ, स ु रत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND Dr ARJUN LAL SAINI, ACCOUNTANT MEMBER आ.अ.सं./ITA No.1750/AHD/2017 (AY 2014-15) (Hearing in Physical Court) Shree Surat Gandhi Mahajan Association, 5/1266,SOI Sheri No.2, Haripura, Surat- 394375 PAN : AACAS 1577 R Vs Income Tax Officer,Ward-2(3)(8), Surat अपीलाथȸ/Appellant Ĥ×यथȸ /Respondent Ǔनधा[ǐरती कȧ ओर से /Assessee by Shri Mehul KPatel, CA राजèव कȧ ओर से /Revenue by Shri S.B.G.Mahapatra, Sr-DR सुनवाई की तारीख/Date of hearing 01.08.2022 उɮघोषणा कȧ तारȣख/Date of pronouncement 01.08.2022 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of ld. Commissioner of Income-Tax (Appeals)-1, Surat [for short to as “Ld. CIT(A)”] dated 15.05.2017 for assessment year (AY) 2014-15, which in turn arises out an assessment order passed by Centralized Processing Centre, Bengalore under section 154 of the Income Tax Act, 1961 (‘the Act’) vide order dated 13.02.2017. The assessee has raised the following grounds of appeal:- ITA No.1750/AHD/2017 (A.Y 14-15) Shree Surat Gandhi Mahajan Association 2 “(1) That on facts and in law, the learned CIT(A) has grievously erred in holding that application u/s 154 of the Act is not valid as there is no mistake apparent on record. (2) That on facts, and evidence on record, it ought to have been held that the entire income of the appellant was exempt on the concept of “mutuality”. 2. Brief facts of the case are that assessee is an Association of Person (for short to as ‘AOP’) was formed with the intention to promote and protect of interest of persons engaged in the business of kariyana & dry fruits. The assessee filed its return of income for assessment year 2014-15 on 20.03.2015 declaring income of Rs.1,67,520/-. The return of income was processed by Central Processing Centre (CPC), Bengaluru. The CPC, while processing the return assessee income at Rs.1,67,520/- under section 167A of the Act. The assessee filed application under section 154 on 31.12.2015. for seeking rectification in the order of CPC. In the application, the assessee contended that assessee is governed by “mutuality” and hence, income earned by assessee is outside the scope of taxation. The application of assessee was rejected vide order dated 04.02.2016, without rectifying the assessment order. ITA No.1750/AHD/2017 (A.Y 14-15) Shree Surat Gandhi Mahajan Association 3 Aggrieved by the order of CPC, Bengaluru dated 04.02.2016, the assessee filed an appeal before Ld. CIT(A). Before Ld. CIT(A), the assessee again reiterated that assessee is an AOP and was setup for protecting interest of persons engaged in business of kariyana & dry fruits. The assessee is formed with the intention to protect the interest as well as to resolve the common problems faced in carrying out the business within its activities. The assessee filed its return of income as AOP, however, the CPC Bengaluru treated the assessee under section 167A of the Act at taxed it at the maximum marginal rate of tax. The assessee is not carrying out any business activities not sharing the income as well as distribution of portion of asset, it is set-up on the principle of mutuality. None of the member has right for entitlement to any type of right or interest in the funds of assessee. 3. The Ld. CIT(A) after considering the submissions of the assessee dismissed the appeal of assessee by taking view that CPC, Bengaluru has assessed the same figure of income as has been declared by the assessee in the return of income only different is that the assessee claimed this income of exemption ITA No.1750/AHD/2017 (A.Y 14-15) Shree Surat Gandhi Mahajan Association 4 on the basis of ‘mutuality’ whereas CPC, Bengaluru has taxed it on the maximum marginal rate. There is no mistake which can be said to be apparent on record. Further, aggrieved the assessee has filed present appeal before the Tribunal. 4. We have heard the submission of the ld. Authorized Representative (AR) for the assessee and the Ld. Sr. Departmental Representative of the revenue. The ld. AR of the assessee reiterated the similar submissions as submitted before ld. CIT(A) and would submits that se is wrongly taxed under section 167A rather assessee is an AOP and working and working on the different ‘mutuality’. 5. On the other hand, Ld. Sr. DR for the Revenue submits that similar adjustment / order was passed against the assessee in preceding assessment years i.e. 2011-12,2012-13 and 2013- 14 and the assessee has accepted such orders and no further appeal or remedial action was taken by assessee. 6. We have considered the rival submission of the parties and find that the CPC, Bengaluru assessed the same income, which has been declared by the assessee in its return of income, only the CPC, Bengaluru taxed the assessee at ITA No.1750/AHD/2017 (A.Y 14-15) Shree Surat Gandhi Mahajan Association 5 maximum marginal rate under section 167A. Before us Ld. Sr. DR for the Revenue raised objection that similar treatments were made in three cases of assessee, which has been accepted by the assessee. Considering the fact that the CPC, Bengaluru has accepted / assessed the same income as has been offered by the assessee though under section 167A of the Act. Therefore, we concur with the findings of Ld. CIT(A) that there is no mistake which can be classified as ‘mistake’ apparent from the record. 7. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 01/08/2022 and the result was also placed on the Notice Board. Sd/- Sd/- (Dr ARJUN LAL SAINI) (PAWAN SINGH) [लेखा सद᭭य/ACCOUNTANT MEMBER] [᭠याियक सद᭭य JUDICIAL MEMBER] Surat, Dated: 01/08/2022 Dkp. Out Sourcing Sr.P.S Copy to: 1. Appellant- 2. Respondent- 3. CIT(A)- 4. CIT 5. DR 6. Guard File True copy/ By order // True Copy //