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Facts
The assessee, Fantex Educational Society, filed appeals against orders from the National Faceless Appeal Centre (NFAC) dated 30.01.2023. The grievance was that the society was treated as an Association of Persons (AOP) and taxed at the maximum marginal rate without appreciating the provisions of Section 167B of the Income Tax Act, 1961. The appellant sought deletion of a tax liability of Rs.43,297/- on an income of Rs.1,09,970/-.
Held
The Income Tax Appellate Tribunal noted that the issue regarding the assessee's status and the application of Section 167B was not properly examined by the CPC. Consequently, the tribunal remanded the matter to the Jurisdictional Assessing Officer (JAO) to properly ascertain the status of the assessee and re-compute the tax.
Key Issues
Whether the NFAC/CPC erred in treating the Fantex Educational Society as an AOP taxable at the maximum marginal rate without considering Section 167B of the Income Tax Act, 1961.
Sections Cited
Section 167B
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.