SHREE VISHWAKARMA SUTRADHAR SAMPATI TRUST,BIKANER vs. INCOME TAX OFFICER, EXEMPTION, BIKANER

ITA 305/JODH/2024Status: DisposedITAT Jodhpur28 March 2025AY 2017-2018Bench: DR. MITHA LAL MEENA (Accountant Member), DR. S. SEETHALAKSHMI (Judicial Member)1 pages
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What did the Tribunal hold?

The Tribunal held that while exemption under Section 11 is indeed not available without 12AA registration, the tax on the surplus should not be at MMR. Instead, it should be taxed as per Section 164(2) at the rates applicable to an Association of Persons (AOP) or an individual, with initial exemptions available.

What were the facts?

The assessee, a charitable trust, filed its return claiming exemption under Section 11. However, it lacked registration under Section 12AA, leading the Assessing Officer to deny exemption and tax the surplus at the Maximum Marginal Rate (MMR). The CIT(A) upheld this decision.

What were the issues?

The primary issue was whether the tax on the income of an unregistered charitable trust should be at MMR or at the normal rates applicable to an AOP/individual. The secondary issue concerned the denial of exemption under Section 11 due to lack of 12AA registration.

Which sections of the Income-tax Act were involved?

Section 11,Section 12AA,Section 164(2),Section 13(1)(c),Section 13(1)(d)

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Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, JODHPUR BENCH ‘SMC’, JODHPUR

Before: DR. MITHA LAL MEENA, AM & DR. S. SEETHALAKSHMI, JM

For Appellant: Shri Amit Kothari (CA)
For Respondent: Shri Karni Dan, Addl. CIT
Hearing: 04/02/2025

PER DR. S. SEETHALAKSHMI, J.M. This is an appeal filed by the assessee against the order of ld. Addl./JCIT (A)-4, Bangaluru dated 16.03.2024 passed under section 250 of the I.T. Act, 1961, for the assessment year 2017-18. The assessee has raised the following grounds of appeal :-

1.

That order passed by the CIT (Appeal) u/s 250 of the Income Tax Act, 1961 for the AY 17-18 is bad in law and on the facts.

2.

The CIT (Appeal) has wrongly countenanced to the arbitrary finding recorded in the assessment order by the Assessing Officer in facts and circumstances of the case. Therefore computing the income of the trust at Rs. 1,92,751/- instead of 1,04,581/- is not correct in the facts and circumstances of the cas

The order continues below.

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