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Facts
Fantex Educational Society filed appeals against NFAC orders for AY 2017-18 and 2018-19, where it was treated as an AOP and taxed at the maximum marginal rate, resulting in a demand of Rs. 43,297/- on an income of Rs. 1,09,970/-. The assessee contended that the NFAC and CPC erred by not appreciating Section 167B and not examining its true status, leading to an incorrect tax calculation.
Held
The Tribunal observed that the assessee was taxed at the maximum marginal rate by treating it as an AOP, without properly considering Section 167B and without the CPC examining its status. Therefore, the matter was remanded to the jurisdictional Assessing Officer (JAO) to ascertain the assessee's correct status and recompute the tax. The appeals were allowed for statistical purposes.
Key Issues
Whether the assessee, a society, was correctly treated as an Association of Persons (AOP) and taxed at the maximum marginal rate under the Income Tax Act, 1961, without proper consideration of Section 167B and examination of its status by the CPC/NFAC.
Sections Cited
Section 167B, Section 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI
Before: Sh. Kul BharatDr. B. R. R. Kumar
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeals have been filed by the assessee against the orders of National Faceless Appeal Centre (NFAC), Delhi dated 30.01.2023. 2. Since, the issue involved in both the appeals are similar, they were heard together and being adjudicated by a common order. In 851/Del/2023, following grounds have been raised by the assessee:
“1. On the facts and in the circumstances of the case and in law the NFAC erred in treating the society formed under the Societies Registration Act, 1860 as AOP taxable at maximum marginal rate of tax without appreciating the provisions of Section 167B. 2. On the facts and in the circumstances of the case and in law the NFAC erred in passing the order under section 250 & 852Del/2023 2 Fantex Educational Society without considering the submission made by the appellant on 20.01.2023. 3. The appellant prays that the liability of Rs.43,297/- made in respect of income tax and interest thereon, on the income of Rs.1,09,970/- be deleted.” 3. We have perused the material available on record.
At the outset, it was brought to our notice that the assessee has been taxed at marginal rate of tax without appreciating the provisions of Section 167B of the Income Tax Act, 1961 by treating the assessee has AOP. It was submitted that the CPC did not examine the issue status of the assessee.
Hence, in the interest of justice, we remand the matter to the file of JAO to ascertain the status and compute the tax accordingly.
In the result, the appeals of the assessee are allowed for statistical purpose. Order Pronounced in the Open Court on 15/03/2024.