ABHISEK EDUCATIONAL AND CHARITABLE TRUST,BHUBANESWAR vs. INCOME TAX OFFICER, EXEMPTION WARD, BHUBANESWAR, PRATYAKSHA KAR BHAWAN,
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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,
Before: BEFORE SHRI GEORGE MATHANMANISH AGARWAL
IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER MEMBER AND MANISH AGARWAL MANISH AGARWAL, ACCOUNTANT MEMBER , ACCOUNTANT MEMBER ITA No.346/CTK/2024 Assessment Year : 2017-18 Abhisek Abhisek Educational Educational and and Vs. Income Income Tax Tax Officer, Officer, Charitable Trust, MIG Charitable Trust, MIG-B-18, Exemption Exemption Ward, Ward, Nayapalli, Bhubaneswar Nayapalli, Bhubaneswar Bhubaneswar. PAN/GIR No. No.AACTA 5203 D (Appellant (Appellant) .. ( Respondent Respondent) Assessee by : Shri K.C.Jena,CA Revenue by : Shri Charan Dass, Sr DR , Sr DR Date of Hearing : 19/11/20 2024 Date of Pronouncement : 19/11/20 024 O R D E R Per Bench
This is an This is an appeal filed by the assessee against the order of the ld appeal filed by the assessee against the order of the ld CIT(A), NFAC, Delhi dated CIT(A), NFAC, Delhi dated 21.6.2024 in Appeal No.CIT(A),Bhubaneswar No.CIT(A),Bhubaneswar- 1/14814/2019-20 20 for the assessment year 2017-18.
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
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issue being against the action of the ld CIT(A) in confirming the order of the Assessing Officer levying tax at Maximum Marginal Rate and third issue being non-granting of TDS credit. It was submitted by ld AR that the assessee is an Association of Persons (AOP) being a Trust which is doing the activity of imparting education. It is agreed by ld AR that the assssee is not registered u/s.12A of the Act and, therefore, not eligible for exemption u/s.11 of the Act. It was the submission that the assessee had filed its return of income and intimation came to be issued, wherein, the assessee’s claim of depreciation had been disallowed and tax had been levied at Maximum Marginal Rate and credit for TDS had not been allowed in full. It was the submission that as the assessee was not registered u/s.12A of the Act, the income of the assessee is to be assessed as if the assessee was running business and as per the provisions of section 32, it was compulsorily incumbent upon the Assessing Officer to allow the depreciation. It was the further submission that as the assessee is registered under “The Charitable Religious Trust Act, 1920”, in view of the provisions of section 167B of the Act, maximum marginal rate was not be applied and regular tax rate is to be applied. It is the further submission that as per 26AS statement, TDS was clearly shown in respect of interest from Bank of Baroda and Karnataka Bank Limited and same has not been granted to the assessee.
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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
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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
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In the result, appeal of the assessee stands partly allowed for statistical purposes.
Order dictated and pronounced in the open court on 19/11/2024.
Sd/- sd/- (Manish Agarwal) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 19/11/2024 B.K.Parida, SPS (OS) Copy of the Order forwarded to : The Appellant : Abhisek Educational and 1. Charitable Trust, MIG-B-18, Nayapalli, Bhubaneswar 2. The respondent: Income Tax Officer, Exemption Ward, Bhubaneswar. 3. The CIT(A)- NFAC, Delhi 4. Pr.CIT, Bhubaneswar-1 5. DR, ITAT, 6. Guard file. //True Copy// By order
Sr.Pvt.Secretary ITAT, Cuttack
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