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Facts
The assessee, a society registered under the Societies Registration Act and Section 12A of the Income Tax Act, was assessed at the maximum marginal rate of tax. The CIT(A) upheld this action, relying on Section 164(3) of the Act.
Held
The Tribunal held that Section 164 of the Act was not applicable to the assessee. The assessee should be assessed under Section 11 of the Income Tax Act as a charitable institution.
Key Issues
Whether Section 164 of the Income Tax Act is applicable to a society registered under the Societies Registration Act and Section 12A of the Income Tax Act, or if it should be assessed under Section 11.
Sections Cited
164(3), 164, 12A, 11
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PHYSICAL HEARING आदेश/Order
The present appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals [in short referred to as CIT(A)] dated 29.04.2024 relating to assessment year 2019-20.
The assessee in this appeal is aggrieved by the action of the CIT(A) in upholding the action of the A.Y. 2019-20 2 Assessing Officer of charging the assessee Trust/Society at maximum marginal rate of tax.
A perusal of the impugned order of the CIT(A) revealed that the ld. CIT(A) has relied upon the provision of Section 164(3) of the Act by treating the assessee Society as assessable in a representative capacity and where the shares of the beneficiaries of income were in- determinate.
The ld. Counsel for the assessee, however has demonstrated that the provisions of said Section 164 of the Act were not applicable in the case of the assessee.
That the assessee is a Society registered under Societies Registration Act, 1860 and has also been registered as a charitable institution under Section 12A of the Income Tax Act. That the provisions of Section 164 were not applicable in the case of the assessee, rather the assessee is liable to be assessed as per the provisions of Section 11 of the Income Tax Act as applicable to the charitable institutions registered under Section 12A of the Income Tax Act.
ITA No. 732/Chd-2024 A.Y. 2019-20 3
The ld. DR could not rebut the aforesaid facts on the file.
In view of this, the impugned order of the CIT(A) is set aside and the matter is restored to the Assessing Officer with a direction to assess the income of the assessee by treating the assessee as a Society which has been registered under Societies Registration Act as well as, as a charitable institution under Section 12A of the Income Tax Act and by applying provisions/deductions as admissible under section 11 of the Income Tax Act.
The appeal of the assessee is treated as allowed for statistical purposes.
Order pronounced on 17 t h April, 2025.