MEHTA SAKARCHAND KALIDAS TRUST,AHMEDABAD vs. THE ACIT CPC , BANGLORE

The assessee is a charitable Trust and is registered under Bombay Public Charitable Trust Act. The return of income of the Trust was filed on 30.03.2018 declaring total income of Rs.84,600/-. In the said return, credit was claimed for the TDS of Rs.8,000/-. On the said return of come, an intimation under Section 143(1) of the Income Tax Act, 1961 was issued thereby determining total income at Rs.84,600/-. However, the credit for the TDS of Rs.8,000 has not been allowed and tax payable including interest is determined at Rs.35,810/- (Tax Rs.26,141/- plus interest Rs.9,669).

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.

The Ld. AR submitted that the assessee is a Charitable Trust and the return was processed under Section 143(1) on 15.03.2019 wherein the total income assessed at Rs.84,600/- but while computing tax liability tax was levied at maximum magical rate without allowing the basic tax exemption limit of Rs.2,50,000/- and tax liability of Rs.35,810/- was determined consisting of tax of Rs.26,141/- and interest of Rs.9,669/-. Even credit for TDS of Rs.8,000/- was not allowed. The assessee filed appeal before the CIT(A) wherein it was contended by the assessee that since there was no contravention of the provisions of Section 13(1), the proviso to Section 164(2) of the Act was not applicable so that tax cannot be imposed at maximum marginal rate. The Ld. AR submitted that the assessee relied upon the orders passed by the CIT(A) for Assessment Years 2013-14, 2014-15 & 2016-17. The Ld. AR also submitted that the adjustment made in the tax computation by charging tax at

The Ld. DR submitted that assessee is not a Charitable Trust and, therefore, the Assessing Officer has rightly applied the maximum marginal rate.

I have heard both the parties and perused all the relevant material available on record. It is pertinent to note that in the earlier Assessment Years i.e. 2013-14, 2014- 15 & 2016-17 the CIT(A) has directed the Assessing Officer to verify the submissions of the assessee and determine the tax at the appropriate rate instead of maximum marginal rate if admissible as per the provisions of Income Tax Act. In the present year also the CIT(A) has not given any reason as to why the maximum marginal rate has to be applied in assessee’s case and simplicitor directed the Assessing Officer to verify and grant credit for TDS of Rs.8,000/-. The submissions of the assessee have to be verified by the Assessing Officer after taking into account all the details. Therefore, I direct the Assessing Officer to verify the same and accordingly adjudicate the matter as per provisions of law. Needless to say the assessee be given opportunity of hearing by following principles of natural justice.

In the result, appeal filed by the assessee is partly allowed for statistical purpose.