SARASWAT HITWARDHAK MANDAL, MUMBAI V. ITO 18 (3)(4), MUMBAI

ITA 6944/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8353 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 05-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR
• Assessee Lawyers: SIDDHARTH SINKAR
• Keywords: Charitable institution; Maximum Marginal Rate; Question of law
• Section: 260A; 12A; 12AA; 143(1); 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI BEFORE SHRI PAWAN SINGH (JM) & SHRI S.RIFAUR RAHMA N(A.M.) ITA NO. 6944/MUM/2018(ASSESSMENT YEAR : 2012-13) SARASWAT HITWARDHAK MANDAL, 1 ST FLOOR, SARASWAT BHAWAN, CHATRAPATI SHIVAJI LANE, MAHIM, MUMBAI 400 016. PAN : AAGTS 2691 M VS ITO-18(3)(4), MUMBAI. APPELLANT RESPONDEDNT APPELLANT BY SHRI SIDDHARTH SINKAR, CA RESPONDENT BY SHRI V. VINOD KUMAR, SR DR DATE OF HEARING 16-01-2020 DATE OF PRONOUNCEMENT 21-01-2020 O R D E R PER PAWAN SINGH, JM : 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LEARNED CIT(A)-48, MUMBAI DATED 28-09-2018 FOR ASSESSMENT Y EAR 2012- 13. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- (A) AS PER THE INTIMATION U/S 143(1) OF THE INCOME TAX ACT, 1961 PASSED BY THE ASSESSING OFFICER, THE INCOME WAS ASSESSED A S PER RETURN OF INCOME FILED BY THE ASSESSEE AT RS. 19,47,230/- BUT THE TA X WAS COMPUTED AT MAXIMUM MARGINAL RATE @ 30%. THIS WAS INCORRECT, IN VALID AND NOT JUSTIFIED. (B) THE ASSESSING OFFICER ERRED IN CALCULATION O F INCOME TAX INCLUDING INTEREST OF RS. 6,63,365/- ON RETURNED INCOME EVEN THOUGH THE STATUS OF THE ASSESSEE IS MENTIONED AS A CHARITABLE TRUST IN THE RETURN OF INCOME. I.T.A. NO. 6944/MUM/2018 ASSESSMENT YEAR: 2012-13 SARASWAT HITWARDHAK MANDAL 2 (C) THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONSIDERING ONLY NEW REGISTRATION CERTIFICATE NO. 47339 SANCTIO NED U/S 12A OF THE INCOME TAX ACT, 1961 DATED 30 TH APRIL, 2015. THE OLD REGISTRATION CERTIFICATE NO. INS/3105 SANCTIONED U/S 12A OF THE INCOME TAX ACT, 1961 DATED 8 TH AUGUST, 1975 WAS NOT AT ALL CONSIDERED BY THE COMMISSIONER OF INCOME TAX (APPEALS). COPY OF REGIS TRATION CERTIFICATE ISSUED U/S 12A IS ENCLOSED HEREWITH. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CHARITABLE TRUST REGISTERED WITH CHARITY COMMISSIONER MUMBAI AND IS ALSO REGISTERED UNDER SECTION (U/S) 12A OF INCOME-TAX AC T. THOUGH THE ASSESSEE WAS HAVING REGISTRATION U/S12A, HOWEVER, T HE ASSESSEE NOT CLAIMED EXEMPTION UNDER SECTION 11 FROM SEVERAL YEA RS. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED RETURN OF INCOME ON 26.07.2012 DECLARING INCOME OF RS. 19,47,230/- AND PAID A TAX ON DECLARED INCOME OF RS. 4,69,004/-. THE RETURN WAS P ROCESSED U/S 143(1) AND THE ASSESSEE WAS TAXED MAXIMUM MARGINAL RATE AND NOT AS PER INCOME TAX SLABS. ON APPEAL BEFORE COMMISSIO NER OF (APPEAL), THE ASSESSEE URGED THAT WHILE FILING RET URN OF INCOME, THE ASSESSEE HAS NOT CLAIMED EXEMPTION U/S 11, EVEN THO UGH THE ASSESSEE WAS ENTITLED. IT WAS FURTHER STATED THAT W HILE FILING RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, THE ASSESS EE OFFERED ITS INCOME TO TAX CONSIDERING THE STATUS OF ASSESSEE AS INDIVIDUAL. THE MADE RELIANCE ON THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF I.T.A. NO. 6944/MUM/2018 ASSESSMENT YEAR: 2012-13 SARASWAT HITWARDHAK MANDAL 3 DIT(EXEM) VS. SHARADABEN BHAGUBHAI MAFATLAL PUBLIC CHARITABLE TRUST 247 ITR 1 (BOMBAY ). IT WAS FURTHER STATED T HAT ASSESSING OFFICER TREATED THE ASSESSEE AS ASSOCIATION OF PERS ON (AOP) AND HAS APPLIED TAX RATE AS MAXIMUM MARGINAL RATE ON THE IN COME OFFERED BY ASSESSEE. THE CONTENTION THAT ASSESSEE WAS NOT A CCEPTED BY LD. CIT(A) BY TAKING VIEW THAT THERE IS NO REGISTRATION U/S 12AA FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THE REGISTRATI ON CERTIFICATE RELIED BY THE ASSESSEE IS APPLICABLE W.E.F. ASSESSM ENT YEAR 2015-16. THUS, FURTHER AGGRIEVED THE ASSESSEE HAS FILED PRES ENT APPEAL BEFORE US. 3. WE HAVE HEARD LEARNED AUTHORISED REPRESENTATIVE (LD AR) OF THE ASSESSEE AND LEARNED DEPARTMENTAL REPRESENTATIVES ( LD.DR) FOR THE REVENUS AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. AR OF THE ASSESSEE SUBMITS THAT THE ASSESSEE IS A C HARITABLE TRUST CARRYING ITS EDUCATIONAL AND MEDICAL ACTIVITIES FO R THE BENEFIT OF SARASWAT COMMUNITY. THE TRUST IS REGISTERED WITH CH ARITY COMMISSIONER MUMBAI ON 29.12.1976. WHILE FILING RET URN OF INCOME, THE ASSESSEE OFFERED ITS INCOME CONSIDERING ITS STATUS AS INDIVIDUAL. THE ASSESSEE HAS NOT CLAIMED EXEMPTION U/S 11. THE LD. AR SUBMITS THAT THE HON'BLE JURISDICTION HIGH COURT IN THE CASE OF DIT (EXEM) VS. SHARADABEN BHAGUBHAI MAFATLAL PUBLIC CHARITABLE I.T.A. NO. 6944/MUM/2018 ASSESSMENT YEAR: 2012-13 SARASWAT HITWARDHAK MANDAL 4 TRUST (SUPRA), THE HONBLE BOMBAY HIGH COURT WHILE CONSIDERING THE QUESTION OF LAW WHETHER THE ASSESSEE TRUST WAS ASSESSABLE AS AN INDIVIDUAL AND CONSEQUENTLY ENTITLED TO DEDUCTION U NDER SECTION 80L OF THE ACT QUESTION ALLOWED THE ISSUE IN AFFIRMATIV E I.E. IN FAVOUR OF THE ASSESSEE. ACCORDINGLY, THE THE LD. AR SUBMITS T HAT IN VIEW OF THE JURISDICTIONAL HIGH COURT, THE ASSESSEE IS ENTITLED TO BE TREATED AS INDIVIDUAL FOR THE PURPOSE OF TAX RATE. 4. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUPP ORTED THE ORDER OF LOWER AUTHORITIES. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PAR TIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISP UTE THAT ASSESSEE IS TRUST. FURTHER WHILE FILING RETURN OF INCOME, THE A SSESSEE HAS NOT CLAIMED EXEMPTION U/S 11. THE ASSESSEE WAS TREATED AS AOP BY ASSESSING OFFICER AND TAXED AT MARGINAL RATE. THE A CTION OF ASSESSING OFFICER WAS OFFERED BY LD. CIT(A). BEFORE US, THE LD. AR OF THE ASSESSEE VEHEMENTLY RELIED UPON THE DECISION OF HON'BLE JURISDICTION HIGH COURT IN THE CASE OF DIT(EXEM) V S. SHARADABEN BHAGUBHAI MAFATLAL PUBLIC CHARITABLE TRUST (SUPRA), WHEREIN THE HON'BLE JURISDICTIONAL HIGH COURT WHILE CONSIDERING THE QUESTION OF LAW WHETHER TRUST WAS ASSESSABLE AS AN INDIVIDUAL A ND CONSEQUENTLY ENTITLED TO DEDUCTION UNDER SECTION 80L. HON'BLE HI GH COURT PASSED I.T.A. NO. 6944/MUM/2018 ASSESSMENT YEAR: 2012-13 SARASWAT HITWARDHAK MANDAL 5 THE FOLLOWING ORDER. FOR BETTER APPRECIATION OF FAC TS THE QUESTION OF LAW, FACTS AND THE SUBMISSION OF PARTY ARE EXTRAC TED BELOW: 10. THE ASSESSEE TRUST IS A PUBLIC CHARITABLE TRUS T. IT CAME IN EXISTENCE AFTER 1 ST JUNE, 1973. THE ASSESSEE FILED ITS RETURN OF INCOM E ON 31 ST OCTOBER, 1993. THE RETURN WAS FILED AS AOP UNDER PR OTEST. THE AO, ACCORDINGLY, ASSESSED THE ASSESSEE AS AOP AND NOT A S AN INDIVIDUAL. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL. THE APPELLATE AUTHORITY REJECTED THE CONTENTION OF THE ASSESSEE T HAT THE TRUST SHOULD HAVE BEEN ASSESSED AS IN INDIVIDUAL AND NOT AS AN A OP. THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80L. THIS WAS REJEC TED BY THE AO AND THE FIRST APPELLATE AUTHORITY ON THE GROUND THAT TH E ASSESSEE WAS AN AOP AND AS AN AOP, THE ASSESSEE WAS NOT ENTITLED TO CLA IM DEDUCTION UNDER SECTION 80L. THE MATTER WAS CARRIED IN APPEAL TO TH E TRIBUNAL WHICH FOLLOWED THE JUDGMENT OF THE DIVISION BENCH OF THIS COURT IN THE CASE OF CIT VS MARSONS BENEFICIARY TRUST AND ORS., FOLLOWIN G THE SAID JUDGMENT, THE TRIBUNAL HELD THAT THE ASSESSEE WAS ASSESSABLE AS AN INDIVIDUAL AND NOT AS AN AOP. THAT, THE ASSESSEE WAS ENTITLED TO D EDUCTION UNDER SECTION 80L. BEING AGGRIEVED BY THE DECISION OF THE TRIBUNA L, THE DEPARTMENT HAS COME IN APPEAL UNDER SECTION 260A OF THE INCOME TAX ACT. ARGUMENTS ON QUESTION NO. 1 11. MR. DESAI, LEARNED SENIOR COUNSEL FOR THE DEPAR TMENT CONTENDED THAT THE ASSESSEE TRUST SHOULD BE ASSESSEE AS AN INDIVID UAL. HE RELIED UPON SECTION 2(31) OF THE INCOME TAX ACT. HE CONTENDED T HAT SECTION 2(31) DEFINES A PERSON TO INCLUDE AN INDIVIDUAL, A HINDU UNDIVIDED FAMILY, A COMPANY, A FIRM, AN AOP OR A BODY OF INDIVIDUALS WH ETHER INCORPORATED OR NOT. HE CONTENDED THAT SECTION 80L DID NOT APPLY TO AN AOP. IT APPLIED ONLY TO INDIVIDUALS. HE CONTENDED THAT A PUBLIC TRU ST CANNOT COME UNDER THE CATEGORY OF INDIVIDUAL UNDER SECTION 2(31) BECA USE SECTION 2(31) REFERS TO ONLY AN INDIVIDUAL AS AN NATURAL PERSON. HE CONTENDED THAT TRUST IS NOT A NATURAL PERSON. THEREFORE, HE CONTENDED TH AT A TRUST CANNOT BE AN INDIVIDUAL. HE CONTENDED THAT PROVISIONS OF SECTION 160 TO 162 HAVE NO APPLICATION TO THIS CASE. HE CONTENDED THAT THE WOR D INDIVIDUAL HAS NOT BEEN DEFINED IN THE ACT. HE CONTENDED THAT THE ASSE SSEE TRUST HAD I.T.A. NO. 6944/MUM/2018 ASSESSMENT YEAR: 2012-13 SARASWAT HITWARDHAK MANDAL 6 ADMITTED IN THE FORM OF ITS RETURN THAT IT IS AN AO P. IN THE CIRCUMSTANCES, THE TRIBUNAL ERRED IN COMING TO THE CONCLUSION THAT THE ASSESSEE WAS ASSESSABLE AS AN INDIVIDUAL. HE CONTENDED THAT THE JUDGMENT OF THE DIVISION BENCH OF THIS COURT IN CIT VS MARSONS BENE FICIARY TRUST AND ORS., HAS NO APPLICATION TO THIS CASE. HE CONTENDED THAT THE SAID JUDGMENT WAS UNDER SECTION 161 AND SECTION 164 OF THE INCOME TAX ACT. HE CONTENDED THAT THE SAID TWO SECTIONS CANNOT APPLY T O A PUBLIC TRUST. HE CONTENDED THAT SECTION 80L APPLIED TO INDIVIDUALS. THAT, THE SAID SECTION DID NOT APPLY TO AOP. HENCE, THE ASSESSEE WAS NOT E NTITLED TO CLAIM DEDUCT IN UNDER SECTION 80L. HE CONTENDED THAT UNDE R IDENTICAL CIRCUMSTANCES, IN THE CASE OF CIT VS G.B.J. SETH AN D C.O.J. SETH, THE MADHYA PRADESH HIGH COURT HAS HELD THAT SINCE THE A SSESSEE. IN THAT MATTER, HAD NEVER DISPUTED THEIR STATUS AS AN AOP., THE TRIBUNAL WAS RIGHT IN ASSESSING THE ASSESSEES AS AN AOP. HE CONTENDED THAT IN THIS MATTER ALSO, THE ASSESSEES FILED THEIR RETURN AS AOP. THER EFORE, THEY WERE STOPPED FROM CLAIMING STATUS OF INDIVIDUAL UNDER TH E ACT. MR. F.B. ANDHYARUJINA, ON THE OTHER HAND, CONTENDED THAT TRU STEES OF THE PUBLIC CHARITABLE TRUSTS HAVE TO BE ASSESSED IN THE CAPACI TY OF AN INDIVIDUAL. HE CONTENDED THAT AN AOP IS AN ASSOCIATION OF PERSONS WHO HAVE COME TOGETHER FOR A COMMON PURPOSE OF EARNING INCOME. HE CONTENDED THAT IN THE PRESENT CASE THE BENEFICIARIES HAVE NOT COME TO GETHER WITH SUCH COMMON PURPOSE. THEY HAVE NOT SET UP THE TRUST. THE Y HAVE NOT AUTHORIZED THE TRUSTEES TO CARRY ON BUSINESS. THE T RUSTEES DERIVE THEIR AUTHORITY FROM THE SETTLER AND NO FROM THE BENEFICI ARIES. THAT, ALL KINDS OF INCOME OF A TRUST HAVE TO BE ASSESSED UNDER SECTION 161(1) OF THE ACT. THAT, WHETHER ASSESSMENT IS MADE ON THE TRUSTEES UN DER SECTION 161(1), THE TAX IS LEVIED UPON AND RECOVERABLE FROM A TRUST EE IN A LIKE MANNER AND TO THE SAME EXTENT AS IT WOULD BE LEVIABLE AND RECO VERABLE FROM THE PERSON REPRESENTED BY HIM. ON OTHER WORDS, INCOME W HICH COMES TO THE SHARE OF A BENEFICIARY HAS TO BE ASSESSED AS IF IT WAS THEN INCOME OF THE BENEFICIARY AND TAX HAS TO BE LEVIED ACCORDINGLY. H E CONTENDED THAT THE PLAIN READING OF SECTIONS 160 TO 162 OF INCOME TAX ACT WHICH SHOW THAT A REPRESENTATIVE ASSESSEE HAS EITHER TO BE AN INDIV IDUAL OR ARTIFICIAL JURIDICAL PERSON WHO IS EQUATED WITH AN INDIVIDUAL. UNDER SECTION I.T.A. NO. 6944/MUM/2018 ASSESSMENT YEAR: 2012-13 SARASWAT HITWARDHAK MANDAL 7 160(1)(IV), IT IS THE TRUSTEE WHO IS THE REPRESENTA TIVE ASSESSEE. THE TRUSTEE, THEREFORE, HAS TO BE AN INDIVIDUAL OR A GROUP OF IN DIVIDUALS. HE RELIED UPON THE JUDGMENT OF THIS COURT IN CIT VS MARSONS B ENEFICIARY TRUST. HE ALSO RELIED UPON THE JUDGMENT OF THE MADRAS HIGH CO URT IN THE CASE OF CIT VS VENU SURESH SANJAY TRUST AND OTHERS,. HE ALS O RELIED UPON THE JUDGEMENT OF THE SUPREME COURT IN THE CASE OF CIT V S SODRA DEVI. FINDINGS ON QUESTION NO. 1 12. IN THE CASE OF CIT VS RAMESH MAHESH SANJAY TRUS T AND OTHERS, THE FACTS WERE AS FOLLOWS. THE ASSESSEE WAS A PRIVATE T RUST. IT WAS A DISCRETIONARY TRUST. THE SHARES OF THE BENEFICIARIE S WERE NOT ASCERTAIN ABLE. THE ISSUE THAT AROSE FOR CONSIDERATION WAS, W HETHER THE ASSESSEE WAS ELIGIBLE FOR RELIEF UNDER SECTION 80L OF THE ACT. T HE AO WAS OF THE VIEW THAT THE ASSESSEE WAS AN AOP BECAUSE THERE WAS MORE THAN ON BENEFICIARIES WHOSE SHARE IN THE TRUST WAS NOT DEFI NITE. HE DENIED THE BENEFIT OF SECTION 80L. HE RELIED UPON SECTION 164. ON APPEAL, THE FIRST APPELLATE AUTHORITY ACCEPTED THE PLEA OF AN ASSESSE E. ON APPEAL, THE TRIBUNAL FOUND THAT SECTION 164 WAS NOT AN INDEPEND ENT SECTION. THAT, SECTION 164 DID NOT DETERMINE THE STATUS OF AN ASSE SSEE. THAT, IT MERELY IMPOSED A LIABILITY AT THE SAME RATE OF TAX AS AN A OP. THEREFORE, THE TRIBUNAL FOUND THAT THE ASSESSEE WAS THE REPRESENTA TIVE ASSESSEE AND THAT SUCH REPRESENTATIVE ASSESSEE HAS TO BE AN INDIVIDUA L OR AN ARTIFICIAL JURIDICAL PERSON EQUATED WITH AN INDIVIDUAL. THE TR USTEE ACTS FOR EACH INDIVIDUAL BENEFICIARY. HE IS RESPONSIBLE FOR THE T AX LIABILITY OF SUCH AN INDIVIDUAL. THEREFORE, THE ASSESSMENT IS TO BE MADE ON THE TRUSTEE AS AN INDIVIDUAL IN HIS REPRESENTATIVE CAPACITY. THAT FAC T THAT BENEFICIARIES ARE A GROUP OF INDIVIDUALS DOES NOT MEAN THAT THE LIABILI TY OF THE ASSESSEE IS OF AOP. THIS JUDGMENT OF THE TRIBUNAL WAS UPHELD BY TH E MADRAS HIGH COURT IN THE ABOVE JUDGMENT. THE MADRAS HIGH COURT HELD THAT THE DETERMINATION OF THE TOTAL INCOME DEPENDED ON VARIO US PROVISIONS OF THE INCOME TAX ACT WHICH TOOK INTO CONSIDERATION DEDUCT IONS TO BE PROVIDED UNDER SECTION 80L OF THE ACT. THAT, THE CHARGE OF T AX COMES INTO PLAY AFTER THE INCOME HAS BEEN DETERMINED IN THE MANNER STATED ABOVE. THE COURT FOUND THAT THE TRUSTEE WAS AN INDIVIDUAL AND FROM HIS INDIVIDUAL INCOME, HE WAS ENTITLED TO DEDUCTION UNDER SECTION 80L OF THE ACT. ON I.T.A. NO. 6944/MUM/2018 ASSESSMENT YEAR: 2012-13 SARASWAT HITWARDHAK MANDAL 8 THE INCOME SO COMPUTED, THE TAX HAS TO BE CHARGED. THEREFORE, THE ASSESSEE WAS ENTITLED TO DEDUCTION UNDER SECTION 80 L OF THE ACT. ACCORDINGLY, IT WAS HELD THAT THE TRIBUNAL WAS RIGH T IN GRANTING THE RELIED UNDER SECTION 80L OF THE ACT. IN THE CASE OF CIT VS VENUE SURESH SANJAY TRUST AND OTHERS (SUPRA), THE MADRAS HIGH COURT HAS HELD THAT A DISCRETIONARY TRUST IS NOT AN HUF OR AN AOP. SUCH A TRUST WOULD BE ENTITLED TO DEDUCTION UNDER SECTION 80L, AS IT IS A N INDIVIDUAL. THE TERM INDIVIDUAL DOES NOT MEAN A SINGLE LIVING HUMAN BEIN G. IT CAN INCLUDE A BODY OF INDIVIDUALS CONSTITUTING A UNIT FOR THE PUR POSES OF THE ACT. EVEN THOUGH THE ASSESSMENT OF INCOME IS IN THE HANDS OF THE TRUST, IT HAS TO BE MADE IN THE SAME MANNER AND TO THE SAME EXTENT AS I T WOULD HAVE BEEN MADE IN THE HANDS OF THE BENEFICIARIES. THEREFORE, IT WAS HELD THAT THE REPRESENTATIVE ASSESSEE IN THE CASE OF A DISCRETION ARY TRUST MUST BE REGARDED AS AN INDIVIDUAL AND IT WOULD BE ENTITLED TO THE BENEFIT OF DEDUCTIONS UNDER SECTION 80L OF THE ACT. IN THAT MA TTER ALSO, THE ASSESSEE WAS A PUBLIC TRUST. IT WAS A DISCRETIONARY TRUST AS THE SHARES OF THE BENEFICIARIES WERE NOT ASCERTAINABLE. IN THE CASE O F CIT MADHYA PRADESH VS SODRA DEVI ((SUPRA)), THE SUPREME COURT WAS CONS IDERING THE SCOPE OF SECTION 16(3) OF THE INCOME TAX ACT, 1922: IN THE S AID JUDGMENT, THE SUPREME COURT HAS HELD THAT THE WORD ASSESSEE WAS WIDE ENOUGH TO COVER NOT ONLY AN INDIVIDUAL BUT ALSO HUF, COMPANY, LOCAL AUTHORITY, FIRM AND AOP OR THE PARTNERS OF THE FIRM OR THE MEM BERS OF THE ASSOCIATION INDIVIDUAL. THAT, THE WORD INDIVIDUAL HAS NOT BEEN DEFINED IN THE ACT. THAT THE WORD INDIVIDUAL DID NOT MEAN ONLY A HUMAN BEING BUT IT INCLUDED A GROUP OF PERSONS FORMING A UNIT. IN THE CASE OF CIT VS MARSONS BENEFICIARY TRUST, THE DIVISION BENCH OF TH IS COURT HAS HELD THAT ALL KINDS OF INCOME OF A TRUST HAVE TO BE ASSE SSED UNDER SECTION 161(1). THAT, THE TRUSTEES ARE AUTHORIZED TO CARRY ON BUSINESS UNDER A DEED OF TRUST. THEY DO NOT DERIVE THEIR AUTHORITY F ROM THE BENEFICIARIES. THEY DERIVE THEIR AUTHORITY FROM THE SETTLER UNDER THE DEED OF TRUST. THE BENEFICIARIES ARE MERELY RECIPIENTS OF THE INCOME E ARNED BY THE TRUST. THEY HAVE NOT COME TOGETHER FOR A COMMON PURPOSE TO EARN INCOME. THEREFORE, THEY CANNOT BE CONSIDERED AS AOP OR A BO DY OF INDIVIDUALS. IN THE SAID JUDGMENT, THE DIVISION BENCH OF THIS COURT REJECTED THE I.T.A. NO. 6944/MUM/2018 ASSESSMENT YEAR: 2012-13 SARASWAT HITWARDHAK MANDAL 9 CONTENTION OF DEPARTMENT THAT THE BENEFICIARIES CON STITUTED AOP. THE TRUSTEES DID NOT CARRY ON BUSINESS ON BEHALF OF THE BENEFICIARIES JUST AS THE RECEIVERS. THE BENEFICIARIES ARE MERELY RECIPIENTS OF THE INCOME EARNED BY THE TRUST. ACCORDINGLY, IT WAS HELD THAT THE TRU STEES WERE NOT ASSESSABLE AS AOP. IN VIEW OF THE ABOVE JUDGMENT, THE TRIBUNAL WAS RIGHT IN COMING TO THE CONCLUSION THAT THE ASSESSEE TRUST OUGHT TO HAVE BEEN ASSESSED IN THE STATUS OF AN INDIVIDUAL. THE JUDGMENT OF THE MA DHYA PRADESH HIGH COURT IN THE CASE OF CIT VS G.B.J. SETH AND C.O.J. SETH, HAS NO APPLICATION TO THE FACTS OF THIS CASE. IN THE MATTE R, THE ASSESSEES WERE EXECUTORS OF THE WILL. THEY WERE ASSESSED IN RESPEC T OF THE INCOME OF THE ESTATE OF THE DECEASED IN THE STATUS OF AN AOP. REL IEF UNDER SECTION 80L WAS DENIED. THE ABOVE CONTENTIONS WERE NOT ADVANCED . IT WAS CONTENDED ON BEHALF OF THE ASSESSEES THAT THE ASSESSEES COULD NOT HAVE BEEN ASSESSED AS AN AOP. HOWEVER, THAT QUESTION WAS NOT REFERRED TO THE HIGH COURT. THE HIGH COURT, THEREFORE, DID NOT GO INTO THE QUES TION. THE QUESTION DID NOT ARISE FOR DETERMINATION. HENCE THE JUDGMENT HAS NO APPLICATION. 13. ACCORDINGLY QUESTION NO. 1 IS ANSWERED IN THE A FFIRMATIVE I.E. IN FAVOUR OF THE ASSESSEES AND AGAINST THE DEPARTMENT. 6. CONSIDERING THE DECISION OF HONBLE BOMBAY HIGH COU RT, WHEREIN THE TRUST WAS TREATED AS INDIVIDUAL, THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO TAX THE ASSESSEE BY TREATING INDIVID UAL INSTEAD OF AOP. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15-01- 2020. SD/- SD/- (S.RIFAUR RAHMAN) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIALMEMBER MUMBAI, DT : 15 TH JANUARY, 2020 I.T.A. NO. 6944/MUM/2018 ASSESSMENT YEAR: 2012-13 SARASWAT HITWARDHAK MANDAL 10 BISWAJIT, SR. P.S. COPY TO : 1. APPELLANT 2. RESPONDENT ITO 18(3)(4), MUMBAI. 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI