DINROZE ESTATE, HYDERABAD V. ITO,NCW-9(5), CHENNAI

ITA 358/CHNY/2023

AI Insights

The case involves Dinroze Estate, assessed as an Association of Persons (AOP), appealing against the tax rates applied by the CPC for the Assessment Year 2014-15. The CPC had applied a maximum marginal rate of 30% on the income from house property, whereas the assessee argued for the application of individual tax rates, citing previous years' assessments and a Supreme Court ruling. The Commissioner of Income Tax (Appeals) upheld the CPC's decision, leading to the current appeal before the Income Tax Appellate Tribunal. The Tribunal, after considering the precedents and the specific provisions of the Income Tax Act, sided with the assessee, directing the application of individual tax rates.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134274 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-07-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 19-03-2023
• Other Referred Cases: CWT vs. Trustees of E.H. Nizam family (Remanidner Wealth) trust (108 ITR 555)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S. VENUGOPALAN LD
• Section: 154

Judgement Text

आयकर अपीलीय अिधकरण “बी” ायपीठ चे ई म । IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHENNAI माननीय ी वी. द ु गा राव, ाियक सद! एवं माननीय ी मनोज कु मार अ&वाल ,लेखा सद! के सम)। BEFORE HON’BLE SHRI V. DURGA RAO, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं./ ITA No.358/Chny/2023 (िनधा रण वष / As sessment Year: 2014-15) Dinroze Estate 12A, Wellington Plaza, 90, Anna Salai,Chennai-600 002. बनाम / V s . ITO Non -Corporate Ward-9(5), Chennai. था यी ले खा सं. /जी आ इ आ र सं. /P A N / G IR N o . AAAAD- 1408 -J (अपीलाथ /Appellant) : (!"थ / Respondent) अपीलाथ कीओरसे/ Appellant by : Shri S. Venugopalan ( CA) - Ld.AR !"थ कीओरसे/Respondent by : Shri D.Hema Bhupal (JCIT)- Ld.Sr. DR सुनवाईकीतारीख/Date of Hearing : 25-07-2023 घोषणाकीतारीख /Date of Pronouncement : 09-08-2023 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2014-15 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 24-01-2023 in the matter of rectification intimation u/s 154 issued by Centralized Processing Centre, Bengaluru (CPC) on 10-07-2019.The assessee is assessed as an Association of Person (AOP). The return of the estate was filed considering the provisions of Sec. 161 of the Act. 2 ITA No.358/Chny/2023 The trust earns income primarily under the head ‘income from house property’. 2. The grievance of the assessee is application of correct rates of taxes. The assessee has computed tax at rates which are applicable to an individual assessee whereas CPC has taxed the returned income at Maximum margin rate of 30%. The assessee’s reasoning was that the assessee is a specified trust wherein the names of the beneficiaries are known and their shares are determinate. It was pointed out that similar rate was charged for AYs 2017-18 and 2018-19 against which the rectification of the assessee was allowed. Therefore, rejection of similar rectification in this year was not justified. In AYs 2011-12 to 2013-14 also, the rates adopted by the assessee were accepted. Reliance was also placed on the decision of Hon’ble Supreme Court in the case of CWT vs. Trustees of E.H. Nizam family (Remianidner Wealth) trust (108 ITR 555) in support of application of Sec. 161. It was held that though Trust had filed single return, the department has to pass order in the hands of the Trustees representing each beneficiary trust separately in respect of his share of income treating the status as an individual. In other words, the department has to pass that many number of assessments as there are beneficiaries. However, Ld. CIT(A) confirmed the intimation issued by CPC by relying on the provisions of Sec.166. Aggrieved, the assessee is in further appeal before us. 3. We find that the trust earns income primarily under the head ‘income from house property’. Therefore, the provisions of Sec.161 (1A) would have no applicability. Secondly, the option of direct assessment as envisaged by Sec.166 could not be applied while processing the return 3 ITA No.358/Chny/2023 of income since only prima-facie adjustments could be made u/s 143(1). Thirdly, in all the preceding as well as in subsequent years, the rates as adopted by the assessee has been accepted by the revenue which is evident from following tabulation as made by Ld. AR before us: - STATEMENT SHOWING THE RETURNS FILED AND REFUND GRANTED TREATING AS INDIVIDUAL S.No. Assessment Year Date of filing Ack No. Income from house property Refund Recd. taxing at normal rates 1 2007-08 03/10/2007 622163 114,858 Yes 2 2008-09 25/07/2008 620923 214,549 Yes 3 2009-10 28/07/2009 620975 149,836 Yes 4 2010-11 03/08/2010 621247 89,188 Yes 5 2011-12 27/07/2011 620460 97,729 Yes 6 2012-13 15/03/2013 1150313176943 104,373 Yes 7 2013-14 02/08/2023 1020813085359 90,666 Yes 8 2014-15 Subject matter of appeal before Hon’ble Tribunal 9 2015-16 31/08/2015 755113510310815 119,675 Yes 10 2016-17 26/07/2016 308760920260716 89,188 Yes 11 2017-18 04/08/2017 132535930040817 328,640 Demand raised on 21/11/2018 as AOP. Rectification filed on 11/3/2019 6/11/2019 Rectification passed and refund granted. 12 2018-19 24/07/2018 886706480240718 89,799 Demand raised on 11/01/2019 as AOP Rectification filed on 11/3/2019 6/11/2019 Rectification passed and refund granted. 13 2019-20 10/08/2019 787572220100819 99,604 Refund granted 14 2020-21 07/11/2020 706173790071120 15,028 Refund granted For all the aforesaid reasons, the computations made by CPC could not be accepted. The Ld. AO is directed to accept the rates of taxes as applied by the assessee. 4. The appeal stand allowed. Order pronounced on 9 th August, 2023. Sd/- Sd/- (V. DURGA RAO) (MANOJ KUMAR AGGARWAL) ाियक सद!/JUDICIAL MEMBER लेखासद! / ACCOUNTANT MEMBER 4 ITA No.358/Chny/2023 चे7ई Chennai; िदनांक Dated : 09-08-2023 DS आदेशकीTितिलिपअ&ेिषत/Copy of the Order forwarded to : 1. अपीलाथ /Appellant 2. !"थ /Respondent 3. आयकरआयु@/CIT 4. िवभागीय!ितिनिध/DR 5. गाडE फाईल/GF