Siddheshwar Basawayaa Bhanapukur Dharmadai Shaikshanik Nyas, Latur V. Deputy Commissioner of Income Tax (CPC) Bangalore, Bangalore

ITA 348/PUN/2022

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The case involves Siddheshwar Basawayaa Bhanapurkar Dharmadai Shaikshanik Nyas, a charitable trust, appealing against the order of the National Faceless Appeal Centre (NFAC), which upheld a rectification order under Section 154 of the Income Tax Act, 1961. The rectification order was passed by the Deputy Commissioner of Income Tax (CPC), charging tax at maximum marginal rates and levying interest under various sections, which the assessee contested. The primary legal contention revolved around the incorrect application of tax rates and the procedural validity of the rectification order.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137355 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2023
• Appeal Filed By: Assessee
• Order Result: AllowedAllowed
• Bench Allotted: B
• Next Hearing Date: 19-12-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 12-05-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order; Charitable institution; Opportunity of being heard; Maximum Marginal Rate
• Section: 154; 11; 234B; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B” : PUNE BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER ITA.No.348/PUN./2022 Assessment Year 2016-2017 Siddheshwar Basawayaa Bhanapurkar Dharmadai Shaikshanik Nyas, Yogkunj, Main Road, Opp. Tahasil Office, Latur – 413 531 PAN AAETS8765J vs. The Deputy Commissioner of Income Tax (CPC), Post Bag No.2, Electronic City Post Office, Bangalore – 560 500 Karnataka. (Appellant) (Respondent) For Assessee : -None- For Revenue : Shri M.G. Jasnani Date of Hearing : 20.12.2022 Date of Pronouncement : 05.01.2023 ORDER PER SATBEER SINGH GODARA, J.M. This assessee’s appeal for the assessment year 2016- 2017, arises against the National Faceless Appeal Centre [in short “NFAC”], Delhi’s order dated 09.12.2021, in Din & Order No.ITBA/NFAC/S/250/2021-22/1037659608(1), involving proceedings under Section 154 of the Income Tax Act, 1961 (in short “the Act”). 2. Case called twice. None appears at assessee’s behest. Case file perused. 3. The assessee raises the following substantive grounds in the instant appeal : 2 ITA.No.348/PUN./2022 Siddheshwar Basawayaa Bhanapurkar Dharmadai Shaikshanik Nyas, Latur 1. “The CIT(A) has erred in upholding the rectification order u/s 154 passed by the DCIT (CPC), rejecting the ground of the appellant that the DCIT, CPC has erred in charging tax (Rs.62041/-) at maximum marginal rates ignoring the provisions of section 11 read with section 164(2). 2. The CIT(A) has erred in upholding the rectification order u/s 154 passed by the DCIT (CPC) rejecting the ground of the appellant that the order u/s 154 read with the intimation u/s 143(1) is illegal and untenable in law. The order u/s 154 passed by the DCIT (CPC) is not in accordance with the provisions of rectification in section 154 of the Income Tax Act 1961 as it is passed without giving proper opportunity of being heard. 3. The CIT(A) has erred in holding that filing of return in form no 7 instead of form no 5 does determine the rate of tax at maximum marginal rate. The tax liability is determined by legal provisions of the Income tax Act, which provides for tax to be levied at ordinary rates applicable to an A O P in case of the charitable trust as per the provisions of section 11, and 164 (2) and as per these provisions the trust like that of appellant tax has to be levied at ordinary rate applicable to an A OP. 4. Levy of interest u/s 234A Rs 11160/-, u/s 234B Rs 16740/- and u/s 234C Rs 2294/- are unjustified when 3 ITA.No.348/PUN./2022 Siddheshwar Basawayaa Bhanapurkar Dharmadai Shaikshanik Nyas, Latur there is no tax payable as per the provisions of Income Tax Act.” 4. It transpires during the course of hearing that the assessee’s sole substantive grievance challenges correctness of both the lower authorities action assessing it at maximum marginal rate allegedly violating sec.11 r.w.s. 164(2) of the Act. Mr. Jasnani could hardly dispute that the CIT(A) has gone by the assessee’s schedule-48 in the return only than determining the correct facts regarding its assessment as per law. Faced with the situation, we deem it appropriate to restore the assessee’s instant sole substantive grievance back to the Assessing Officer for his fresh, appropriate adjudication on merits, preferably within three effective opportunities of hearing. Ordered accordingly. 5. Delay of 131 days in filing the instant appeal is condoned as the NFAC herein had passed its order on 09.12.2021 during Covid-19 pandemic period only. 6. This assessee’s appeal is allowed for statistical purposes in above terms. Order pronounced in the open Court on 05.01.2023. Sd/- Sd/- [DR. DIPAK P. RIPOTE] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 05 th January, 2023 VBP/- 4 ITA.No.348/PUN./2022 Siddheshwar Basawayaa Bhanapurkar Dharmadai Shaikshanik Nyas, Latur Copy to 1. The appellant 2. The respondent 3. The Ld. CIT(A) concerned. 4. The CIT concerned 5. D.R. ITAT, Pune “B” Bench, Pune 6. Guard File. //By Order// Assistant Registrar, ITAT, Pune Benches Pune.