GOLDEN SPORTS AND RECREATION CLUB,MADURAI vs. ITO, NCW-1(7), MADURAI

ITA 2022/CHNY/2026Status: DisposedITAT Chennai28 September 2026AY 2023-244 pages
AI SummaryAllowed

What were the facts?

The assessee, Golden Sports and Recreation Club, a society registered under the Tamil Nadu Societies Registration Act, 1975, and assessable as an AOP, filed its return of income for Assessment Year 2023-24 declaring a total income of Rs. 9,66,300/-. The Assessing Officer (AO) invoked Section 167B of the Income Tax Act, 1961, and computed tax at a flat rate of 30%. The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], who confirmed the AO's order. The assessee then filed an appeal before the Income Tax Appellate Tribunal (ITAT), Chennai Bench, challenging the CIT(A)'s confirmation of the AO's action.

What did the Tribunal hold?

The Tribunal held that the assessee is a society registered under the Tamil Nadu Societies Registration Act, 1975, and is assessable as an AOP. The Tribunal noted that the Ld. CIT(A) confirmed the tax computed under Section 167B by applying a flat rate of 30%. Citing the order in KMR Educational Society v. ACIT (supra), the Tribunal reiterated its view that Section 167B has no application to societies registered under the Societies Act or similar laws. Therefore, the application of Section 167B in the present case was held to be not applicable. The Tribunal directed the AO to compute the tax at rates applicable to an individual or HUF, allowing the basic exemption limit and thereafter applying the applicable slab rates. The disallowance/adjustment made by the AO and confirmed by the Ld. CIT(A) was deemed unjustified. The order of the Ld. CIT(A) was set aside, and the grounds raised by the assessee were allowed.

What were the issues?

1. Whether the Ld. CIT(A) was justified in confirming the addition made by the AO on account of invoking the provisions of Section 167B of the Income Tax Act, 1961, in the facts and circumstances of the case. Assessee's contentions: The assessee argued that an AOP is taxable at rates applicable to an individual or HUF, with the basic exemption limit available, and the balance income taxable at slab rates. The AO's application of a flat rate of 30% under Section 167B without allowing the basic exemption limit was unjustified. The assessee relied on the decision in KMR Educational Society v. ACIT (2015) 55 taxmann.com 218 (Hyderabad–Trib.), which held that Section 167B has no application to societies registered under the Societies Act or similar laws. The assessee prayed to quash the 30% slab rate application. Revenue's contentions: The Ld. DR relied on the order of the Ld. CIT(A).

Which sections of the Income-tax Act were involved?

Section 167B

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Before: Shri Inturi Rama Rao & Shri S.S. Viswanethra Ravi

Hearing: 28.07.2026Pronounced: 28.09.2026

PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:

This appeal filed by the assessee is directed against the order dated 04.02.2026 passed by the Ld. Commissioner of Income Tax (Appeal), ADDL/JCIT (A)-1, Pune for the assessment year 2023-24. 2. The assessee raised five grounds of appeal, amongst which the only issue that emanates for consideration is as to whether the Ld. CIT(A) is justifie

The order continues below.

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