Vijaya Durga Devi Trust, Pune V. Deputy Commissioner of Income-tax, CPC, Bangalore

ITA 494/PUN/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2843 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Appeal Filed On: 29-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Maximum Marginal Rate; Set aside
• Section: 154; 143(1)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER . / ITA NO.494/PUN/2019 / ASSESSMENT YEAR : 2015-16 VIJAYA DURGA DEVI TRUST, LAKAKI COMPOUND, MODEL COLONY, SHIVAJINAGAR, PUNE. PAN : AAATV0895L. . / APPELLANT V/S THE DY.COMMISSIONER OF INCOME TAX, CPC., BANGALORE. . / RESPONDENT ASSESSEE BY : SHRI C.H. NANIWADEKAR. REVENUE BY : SHRI M.K. VERMA. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE O RDER OF COMMISSIONER OF INCOME TAX (A) 10, PUNE DATED 24.01.20 19 FOR THE ASSESSMENT YEAR 2015-16. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS A RELIGIOUS TRUST STATED TO HAVE BEEN FORM ED IN 1968 AND WAS BEING HITHERTO ASSESSED IN THE STATUS OF AOP. AS SESSEE ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y 2015-2016 O N 29.07.2016 DECLARING TOTAL INCOME OF RS.71,590/-. THE RETURN WAS PROCE SSED U/S 143(1) OF THE ACT WHEREBY A DEMAND OF RS.27,140/- WAS R AISED ON THE / DATE OF HEARING : 03.06.2019 / DATE OF PRONOUNCEMENT: 10.06.2019 2 ITA NO.494/PUN/2019 ASSESSEE. THEREAFTER ASSESSEE RAISED OBJECTIONS AND THE APPLICATION WAS REJECTED VIDE ORDER DATED 20.12.2016 PASSED U/S 154 OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATT ER BEFORE LD.CIT(A) WHO VIDE ORDER DATED 24.01.2019 (IN APPEAL NO.PN/CIT(A)10/ITO EXMP WD1(1)/274/16-17) UPHELD THE ORDER OF AO. AGGRIEVED BY THE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN AP PEAL AND HAS RAISED THE FOLLOWING GROUNDS : 1. THE LEARNED CIT (APPEALS) ERRED ON FACTS AND IN LAW IN CHARGING TAX LIABILITY AT 30% FLAT RATE WITHOUT ALLOWING BASIC E XEMPTION OF RS.2,50,000/- IN CASE OF AOP WHICH IS NOT REGISTERED U/S 12A. I HAVE FILED THE RETURN IN FORM TYPE ITR-5 DECLARING TOTAL INCOME OF RS.71,589 /- HOWEVER THE TAX HAS BEEN WORKED OUT BY THE AO AT 30% FLAT RATE AND TOTA L DEMAND OF RS.27,138/- HAS BEEN RAISED BY THE AO (30% TAX OF R S.21,477/- IS CHARGED ALONG WITH CESS OF RS.644/- AND INTEREST OF RS.5,01 7/-). THE TAX IN THE PAST IS ALWAYS ASSESSED AS AN AOP. 2. THE POINT IS TO BE NOTED THAT THE INCOME ARISES FROM THE TRUST IS NOT FOR THE BENEFIT OF THE TRUSTEE BUT FOR THE MAINTENANCE AND UPKEEP OF SHRI VIJAYADURGA DEVI DEVASTHAN, AND ALL MATTERS CONNECT ED WITH AND INCIDENTAL THERETO, INCLUDING ALL RELIGIOUS, CULTUR AL ACTIVITIES AND PERFORMANCE OF FESTIVALS, TO KEEP THE PREMISES CLEA N, PROVISION OF LIGHTS, LAMPS ETC. 3. BOTH THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOG ETHER. 4. BEFORE ME LD AR REITERATED THE SUBMISSIONS MADE BEFORE LOWER AUTHORITIES AND FURTHER SUBMITTED THAT ASSESSEE IS A TR UST FORMED IN 1968 AND THE OBJECT OF THE TRUST INTER-ALIA WAS THE M AINTENANCE AND UPKEEP OF SHRI VIJAY DURGA DEVI DEVASTHAN, KERI, GOA. HE SUBMITTED THAT SOLE BENEFICIARY AS PER THE TRUST DEED IS THE DEITY A ND THAT THE DEITY BEING A JURISTIC PERSON, IT CAN HOLD PROPERTY AND BE IN RE CEIPT OF INCOME AND FOR THIS PROPOSITION HE RELIED ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF OFFICIAL TRUSTEE OF WEST BENGAL VS. CIT REPOR TED IN (1974) 93 ITR 348. HE THEREAFTER SUBMITTED THAT SINCE THE SOLE BENEFICIARY IS THE DEITY HAVING THE STATUS OF AN INDIVIDUAL, THE TAX RATES APPLICABLE TO 3 ITA NO.494/PUN/2019 INDIVIDUAL WOULD APPLY TO IT AND FOR WHICH HE RELIED ON THE D ECISION OF PUNE ITAT IN THE CASE OF ITO VS. SHRI HANUMAN MANDIR T RUST (2003) 78 TTJ 469. HE FURTHER SUBMITTED THAT THE LD.CIT(A) HAD ERR ED IN APPLYING THE PROVISIONS OF SEC.167B OF THE ACT TO THE CASE OF THE ASSESSEE. HE SUBMITTED THAT PROVISIONS OF SEC.167B ARE NOT APPLICABLE T O THE PRESENT FACTS BECAUSE SEC.167B WOULD BECOME APPLICABLE WHEN THE IN COME OF THE ASSOCIATION OR BODY ARE INDETERMINATE AND THEN IN SUCH A SITUATION THE TAX RATE APPLICABLE WOULD BE AT MAXIMUM MARGINAL RATE. HE S UBMITTED THAT IN THE PRESENT CASE SINCE THE ENTIRE INCOME BELONGE D TO ONLY SINCE PERSON, I.E. THE DEITY, PROVISIONS OF SEC.167B OF THE ACT ARE NOT APPLICABLE. HE THEREFORE SUBMITTED THAT THE ASSESSEE BE A LLOWED THE BASIC EXEMPTION LIMIT AS APPLICABLE TO AN INDIVIDUAL. HE THEREFORE SU BMITTED THAT THE ORDER OF LOWER AUTHORITIES BE SET ASIDE. LD DR O N THE OTHER HAND SUPPORTED THE ORDER OF LOWER AUTHORITIES. 5. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE M ATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT THE TRUST HAS BEE N CREATED IN THE YEAR 1968 AND AS PER THE TRUST DEED, THE ENTIRE INCOME IS TO BE USED FOR THE UPKEEP OF DEITY. IT IS ALSO AN UNDISPUTED FACT THAT TH E DEITY IS THE SOLE BENEFICIARY OF THE TRUST. IT IS ALSO A FACT THAT THERE IS NO DISPUTE WITH RESPECT TO THE STATUS OF THE ASSESSEE AND THE INCOME RETURNED BY THE ASSESSEE. THE ONLY DISPUTE IS WHETHER THE TAX HAS TO B E COMPUTED ON THE BASIS OF TAX RATES APPLICABLE TO AN INDIVIDUAL OR THE PROVISIO NS OF SEC.167B WOULD APPLY. THE PERUSAL OF SEC.167B OF THE AC T REVEALS THAT THE PROVISION APPLIES TO AN ASSOCIATION OR PERSONS OR BOD Y OF INDIVIDUALS WHERE ITS INCOME IS INDETERMINATE OR UNKNOWN THEN THE TA X SHALL BE CHARGED AT THE MAXIMUM MARGINAL RATE. IN THE PRESENT CASE, IT IS A FACT 4 ITA NO.494/PUN/2019 THAT THE DEITY IS THE SOLE BENEFICIARY AND IT IS NOT A CASE WHERE THE SHARE OF ITS INCOME IS UNKNOWN OR INDETERMINATE. IN SUCH A SITUAT ION I AM OF THE VIEW THAT PROVISIONS OF SEC.167B WOULD NOT BE APPLICA BLE AND SINCE THE DEITY IS A JURISTIC PERSON AND HAVING THE STATUS OF A N INDIVIDUAL, AS HELD BY HONBLE APEX COURT IN THE CASE OF OFFICIAL TRUSTEE O F WEST BENGAL (SUPRA) THE TAX RATES AND THE SLABS AS APPLICABLE TO AN IN DIVIDUAL WOULD APPLY. I THEREFORE HOLD SO. I THEREFORE DIRECT THAT THE TAX SLAB AS APPLICABLE TO INDIVIDUAL BE APPLIED TO THE ASSESSEE. THUS, THE GROUNDS OF ASSESSEE ARE ALLOWED. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 10 TH DAY OF JUNE, 2019. SD/-- ( ANIL CHATURVEDI ) ' / ACCOUNTANT MEMBER PUNE; DATED : 10 TH JUNE, 2019. YAMINI #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-10, PUNE. THE CIT (EXEMPTIONS), PUNE. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // / 012%3&4 / SR. PRIVATE SECRETARY ) &' , / ITAT, PUNE.