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2017 (10) TMI 375 - AT - Income TaxIncome exempt to assessee having 12A registration - income brought to tax by the Assessing Officer at maximum marginal rate confirmed by CIT-A - determination of status of appellant - Held that:- The appellant had not applied 85% of the surplus amount for the purposes of trust, it had also admitted that permission was not sought for accumulation of the surplus amount u/s. 11(2) of the Act. Consequently, Assessing Officer determined the taxable income at ₹ 71,840/- on the ground that 85% of the income was not utilized for charitable purposes during the relevant Assessment Year. Hon’ble Madras High Court in the case of Anasuya Muthanna Vs. CIT (1996 (4) TMI 15 - MADRAS High Court ) held that where share of beneficiary is unknown and undeterminate, the assessee trust is subject to maximum marginal rate, In my view, appellant trust is discretionary trust. Hence, it is liable to be assessed as per the provisions of Sec.164(1). Assessing Officer’s action of charging maximum marginal rate is in order - Decided against assessee.
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