Samvardhan, Ghaziabad V. ITO (Exemption), Ghaziabad

ITA 6896/DEL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2002 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 16-11-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: VANSHIKA TANEJA
• Keywords: Maximum Marginal Rate
• Section: 12AA; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I-2+SMC, NEW DELHI BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER ITA NO. 6896/DEL/2017 : ASSTT. YEAR : 201 4-15 SAMVARDHAN, 56, CHATTA MOHALLA, DELHI GATE, GHAZIABAD VS INCOME TAX OFFICER, EXEMPTION WARD, GHAZIABAD (APPELLANT) (RESPONDENT) PAN NO. A A KTS6545E ASSESSEE BY : MS. VANSHIKA TANEJA, ADV. REVENUE BY : SH. PRADEEP SINGH GAUTAM, SR. DR DATE OF HEARING: 27.02.2020 DATE OF PRONOUNCEMENT: 06.05.2020 ORDER PER DR. B.R.R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF LD. CIT (A), GHAZIABAD DATED 31.08.201 7. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE: 1. THAT THE ORDER OF THE LD. CIT (A) DATED 31.08.2 017 IS BAD IN LAW AND ON FACTS. 2. THAT THE LD. ASSESSING OFFICER HAS ERRED IN LAW IN NOT ISSUING ANY SHOW CAUSE NOTICE BEFORE MAKING ADDITIO N. 3. THAT THE LD. CIT (A) HAS ERRED IN UPHOLDING THE ADDITION OF RS.1,55,480/- BY MERELY RELYING ON THE ORDER OF LD. AO AND WITHOUT RECORDING HIS OWN SATISFACTIO N IN RELATION TO REJECTION OF THE CLAIM OF THE APPELLANT . 4. THE LD. CIT (A) HAS ERRED IN APPLYING THE PROVIS IONS OF SECTION 167B(2) OF THE ACT REGARDING APPLICABILITY OF MAXIMUM MARGINAL RATE OF TAX DESPITE THE FACT THAT APPELLANT TRUST IS COVERED UNDER CLAUSE (I) OF THE FIRST SCHEDULE OF THE FINANCE ACT. ITA NO. 6896/DEL/2017 SAMVARDHAN 2 3. DURING THE YEAR, THE ASSESSEE TRUST RECEIVED DON ATION OF RS.1,26,200/- AND LIFE MEMBERSHIP FEE OF RS.29,280/ - HAS BEEN ADDED TO THE INCOME OF THE ASSESSEE ON THE GROUNDS THAT THE ASSESSEE IS NOT ELIGIBLE FOR THE DEDUCTION AS THE A PPLICATION FOR REGISTRATION U/S 12AA OF THE INCOME TAX ACT, 1961 H AS BEEN REJECTED BY THE LD. CIT(EXEMPTION), LUCKNOW ON 22.0 6.2015. HAVING REJECTED THE AO TAXED THE AMOUNT AT THE MAXI MUM MARGINAL RATE APPLICABLE TO AOP. THE LD. CIT (A) CO NFIRMED THE ACTION OF THE ASSESSING OFFICER ON THE GROUNDS THAT THE BENEFITS OF THE PROVISIONS OF SECTION 167B(2) ARE NOT APPLIC ABLE TO THE ASSESSEE. THE PROVISIONS OF SECTION 167B READS AS U NDER: 167B. (1) WHERE THE INDIVIDUAL SHARES OF THE MEMBE RS OF AN ASSOCIATION OF PERSONS OR BODY OF INDIVIDUALS (OTHER THAN A COMPANY OR A CO-OPERATIVE SOCIETY OR A SOCIE TY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 18 60 (21 OF 1860) OR UNDER ANY LAW CORRESPONDING TO THAT ACT IN FORCE IN ANY PART OF INDIA) IN THE WHOLE OR ANY PAR T OF THE INCOME OF SUCH ASSOCIATION OR BODY ARE INDETERMINAT E OR UNKNOWN, TAX SHALL BE CHARGED ON THE TOTAL INCOME O F THE ASSOCIATION OR BODY AT THE MAXIMUM MARGINAL RATE : PROVIDED THAT, WHERE THE TOTAL INCOME OF ANY MEMBER OF SUCH ASSOCIATION OR BODY IS CHARGEABLE TO TAX AT A RATE WHICH IS HIGHER THAN THE MAXIMUM MARGINAL RATE, TAX SHALL BE CHARGED ON THE TOTAL INCOME OF THE ASSOCIA TION OR BODY AT SUCH HIGHER RATE. (2) WHERE, IN THE CASE OF AN ASSOCIATION OF PERSONS OR BODY OF INDIVIDUALS AS AFORESAID [NOT BEING A CASE FALLING UNDER SUB-SECTION (1)], (I) THE TOTAL INCOME OF ANY MEMBER THEREOF FOR THE PREVIOUS YEAR (EXCLUDING HIS SHARE FROM SUCH ASSOCI ATION OR BODY) EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO TAX IN THE CASE OF THAT MEMBER UNDER THE FINANCE ACT OF THE RELEVANT YEAR, TAX SHALL BE CHAR GED ON THE TOTAL INCOME OF THE ASSOCIATION OR BODY AT THE MAXIMUM MARGINAL RATE; (II) ANY MEMBER OR MEMBERS THEREOF IS OR ARE CHARGE ABLE TO TAX AT A RATE OR RATES WHICH IS OR ARE HIGHER TH AN THE MAXIMUM MARGINAL RATE, TAX SHALL BE CHARGED ON THAT ITA NO. 6896/DEL/2017 SAMVARDHAN 3 PORTION OR PORTIONS OF THE TOTAL INCOME OF THE ASSO CIATION OR BODY WHICH IS OR ARE RELATABLE TO THE SHARE OR S HARES OF SUCH MEMBER OR MEMBERS AT SUCH HIGHER RATE OR RA TES, AS THE CASE MAY BE, AND THE BALANCE OF THE TOTAL IN COME OF THE ASSOCIATION OR BODY SHALL BE TAXED AT THE MA XIMUM MARGINAL RATE. EXPLANATION.FOR THE PURPOSES OF THIS SECTION, THE INDIVIDUAL SHARES OF THE MEMBERS OF AN ASSOCIATION OF PERSONS OR BODY OF INDIVIDUALS IN THE WHOLE OR ANY PART OF THE INCOME OF SUCH ASSOCIATION OR BODY SHALL BE DEE MED TO BE INDETERMINATE OR UNKNOWN IF SUCH SHARES (IN RELATION TO THE WHOLE OR ANY PART OF SUCH INCOME) A RE INDETERMINATE OR UNKNOWN ON THE DATE OF FORMATION O F SUCH ASSOCIATION OR BODY OR AT ANY TIME THEREAFTER. ] 4. HAVING HEARD THE ARGUMENTS OF BOTH THE PARTIES A ND ON PERUSAL OF THE RECORD, WE FIND THAT IN THE ABSENCE OF REGISTRATION U/S 12AA, THE LD. CIT (A) HAS RIGHTLY TREATED THE AMOUNT TO MAXIMUM MARGINAL RATE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 167B(2) OF THE IT ACT. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/05/2020. SD/- SD/- (SUCHITRA KAMBLE) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED: 06/05/2020 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR