Case Laws
Acts
Notifications
Circulars
Classification
Forms
Manuals
Articles
News
D. Forum
Highlights
Notes
🚨 Important Update for Our Users
We are transitioning to our new and improved portal - www.taxtmi.com - for a better experience.
⚠️ This portal will be discontinued on 31-07-2025
If you encounter any issues or problems while using the new portal,
please
let us know via our feedback form
so we can address them promptly.
Home
2022 (10) TMI 824 - AT - Income TaxAssessment of trust/AOP - trust to be assessed in the status of AOP - Levying tax at the maximum marginal rate instead of rates applicable to individuals - exemption u/s 11 denied on no registration u/s. 12A - HELD THAT - On careful reading of sub-section (2) of section 164 we note that in the case of relevant income which derived from property held under trust wholly for charitable or religious purposes the said income is not exempt u/s. 11 of the Act is to be treated the income of association of persons. Admittedly for having no registration u/s. 12A of the Act the CPC Bangalore denied exemption u/s. 11 of the Act but however applied maximum marginal rate. Admittedly the exemption u/s. 11 was denied for not having registration u/s. 12A of the Act and there is no specific mention of that a violation u/s. 13(1)(c) and (d) of the Act. Therefore find force in the arguments of ld. AR that there was no violation u/s. 13(1)(c) and (d) of the Act for denial of exemption u/s. 11 but exemption u/s. 11 denied only for not having registration u/s. 12A of the Act. Therefore in my opinion that proviso is not applicable as relied on by the ld. DR. Admittedly the trustees are not entitled to any share in the income of the assessee as it is meant for charitable or religious purposes. Therefore the tax rates in such cases are at the rate ordinarily applicable to an association of persons and not at the maximum marginal rate. In the light of above finding of Tribunal of Shri Hanuman Mandir Trust 2002 (2) TMI 357 - ITAT PUNE we note that the assessee is a religious trust and the income derived from property of the said trust utilized to the deity and there is not dispute with regard to the said fact as it was contended by the ld. AR that the entire income goes to the deity who is the assessee. Therefore these findings are applicable to the facts on hand and hold that the assessee is assessable under the status of AOP as per the rates applicable to an individual. Further in the case of Vijaya Durga Devi Trust 2019 (6) TMI 1047 - ITAT PUNE which is also a religious trust assessed in the status of AOP which is evident from para 2 of the said decision. The Tribunal held the income of the said trust is to be computed on the basis of tax rates applicable to an individual if the entire income is utilized for the upkeep of deity. As discussed above there is no dispute with regard to the income of the assessee in the present case is used for deity i.e. assessee. Therefore the income should be taxed at the rate applicable to the individual. Therefore the order of CIT(A) is not justified and it is set aside. Thus the ground raised by the assessee is allowed.
|