M/S. PARSEE GYMKHANA,MUMBAI vs. ACIT-CIRCLE 18(2), MUMBAI

This appeal in A.Y.2014-15 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-53, Mumbai in appeal No.CIT(A)-53/IT-376/ACIT-18(2)/2018-19 dated 18/06/2019 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 05/12/2016 by the ld. Asst. Commissioner of Income Tax 18(2), Mumbai (hereinafter referred to as ld. AO).

The only effective issue to be decided in the instant appeal is that whether the income of the assessee club would be taxable at maximum marginal rate u/s.167B of the Act or at slab rates applicable to Association Of Persons (AOP).

We have heard rival submissions and perused the materials available on record. We find that the assessee formed Members Club on 25/02/1885. The assessee is managing a Gymkhana namely “Parsee Gymkhana” located at New Marine Lines, Mumbai. The assessee filed its return of income for the A.Y.2014-15 on 24/07/2014 electronically declaring total income of Rs.1,36,86,560/- in the status of AOP wherein the tax rate was automatically picked up to be chargeable at maximum marginal rate by the income tax return filing software. The ld. AR pleaded that till A.Y.2010-11, where the returns were filed manually before the Income Tax department, the assessee club had been offering income to tax at slab rates applicable to AOP and which was accepted by the department. However, commencing from A.Y.2011-12 onwards, when electronic filing was made mandatory, once the status of the assessee is accepted as AOP, the ld. AR pleaded that the return filing software automatically taxes the income to be chargeable at maximum chargeable rate. The ld. AR also stated that in the A.Y.2014-15, assessment was completed u/s.143(3) of the Act wherein assessee was charged tax only at slab rates and provisions of Section 167B of the Act were not made applicable. Accordingly, the ld. AR pleaded that this appeal may be restored back to the file of the ld. AO to decide in light of assessment framed for the A.Y.2014-15 in the hands of the assessee. The ld. DR fairly agreed to the said proposition of the ld. AO. Considering the facts of the case and arguments advanced hereinabove by the parties, we deem it fit to restore this issue to the file of the ld. AO for denovo adjudication in accordance with law.

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