ABHISEK EDUCATIONAL AND CHARITABLE TRUST,BHUBANESWAR vs. INCOME TAX OFFICER, EXEMPTION WARD, BHUBANESWAR, PRATYAKSHA KAR BHAWAN,

Shri K.C. Jena, K.C. Jena, ld AR appeared for the assessee and Shri the assessee and Shri Charan Dass, Sr. DR appeared for the revenue. DR appeared for the revenue.

It was submitted by ld AR that there are It was submitted by ld AR that there are three issues involved issues involved in assessee’s appeal, first issue being non assessee’s appeal, first issue being non-granting of depreciation, second granting of depreciation, second

In reply, ld Sr DR submitted that admittedly the assessee is not registered u/s.12A of the Act and in view of the provisions of section 32 of the Act, depreciation is liable to be allowed to the assessee. In regard to the applicability of provisions of section 167B of the Act, it was submitted by ld AR that individual shares of members of the Association of Persons are indeterminative and unknown and, therefore, tax is liable to be paid on the total income of the AOP at maximum marginal rate. In regard to the issue of non-granting of the benefit of TDS, ld Sr DR submitted that he had no objection if the issue is restored to the file of the Assessing Officer for verification as to whether the said income has been offered to tax by the assessee when computing its total income and the Assessing Officer could draw appropriate conclusion.

We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the assessee is an AOP and Trust registered under “The Charitable ad Religious Trust Act 1920”. As the assessee is not registered u/s.12A of the Act, obviously, the income of the assessee will have to be assessed as if the assessee is running the business of imparting education. In such circumstances, its income and expenditure account has not to be prepared but profit and loss account that has to be prepared in the case of the assessee. The provisions of section 32 of the Act makes incumbent on the Assessing Officer to allow the depreciation to the assessee whether the assessee claims it or not. This being so, the P a g e 3 | 5 disallowance of depreciation as made in the intimation and upholding the same in the rectification order u/s.154 of the Act is found to be erroneous. Consequently, the Assessing Officer is directed to re-compute the income of the assessee under the head “business” and allow the depreciation to the assessee in accordance with law.

Coming to the issue of application of regular rate of tax or maximum marginal rate as mentioned earlier, the assessee is not registered u/s.12A of the Act, individual shares in the Association of Persons is indeterminative and unknown and consequently, in view of the provisions of section 167B of the Act, maximum marginal rate is applicable and the action of the Assessing Officer in applying the maximum marginal rate to compute the tax liability of the assessee is upheld.

Coming to the issue of non-granting of the benefit of TDS, the issue is restored to the file of the Assessing Officer for readjudication. The Assessing Officer shall verify as to whether the corresponding income in relation to TDS as shown in the 26AS statement has been included by the assessee for computing the income for the impugned assessment year for which income has been included in computation of total income of the assessee for the impugned assessment year, then the corresponding TDS is to be allowed. This is to be verified in accordance with law by the Assessing Officer. In these circumstances, this part of the ground of the assessee stands partly allowed for statistical purposes. P a g e 4 | 5

In the result, appeal of the assessee stands partly allowed for statistical purposes.