9911796707
TMI Blog2024 (4) TMI 933X X X X Extracts X X X X X X X X Extracts X X X X ..... fact of the case is that, in this case assessee filed return of income for the assessment year 2017-18 on 08.07.2017 and processing u/s 143(1) was completed on 23.04.2018 at total income of Rs. 3,98,410/- and as per system demand of Rs. 98,297/- was created. The ld. AR of the assessee filed a rectification application on 05.01.2021 and requested that:- "The assessee has received intimation order u/s 143(1) in which the CPC raised a demand of Rs. 98,297/-. But as per their submission the assessee is eligible for the basic exemption of Rs. 2,50,000/- as it is not the charitable or religious trust/institution. So, the provisions of audit u/s 12A(1)(B) of the I.T. Act also not applicable. Under Section 12A(1)(B) of the Act audit is applicable only for charitable or religious trust/institution not to any other trust. The trust has not taken any other exemption u/s 12A of the Act, hence eligible for basic exemption of Rs. 2,50,000/-." The facts of the case are examined and contention of the ld. AR of the assessee considered but found not acceptable. On verification it is seen that there is no prima facie error in the order which the assessee has sought to be rectified. As seen from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not allowed to it. However, in course of the current proceedings it is argued in the written submission that it is a case of "DISCRETIONARY TRUST CREATED BY WILL "where the share of beneficiaries not determinate and the provisions of section 164(1)(1) of Act would apply. It is further contended that the AO was wrong in invoking the provisions of section 167B(2) of Act and applying Maximum Marginal Rate on income of such trust due to filing of return form 5 & status "AOP", which is nothing but a Technical Error. The status of assesse has always been "ARTIFICIAL JURIDICAL PERSON" in terms of section 164(1) of Act & tax should have been levied by treating it as "INDIVIDUAL & not at Maximum Marginal Rate. Thus the A.O. was not justified in rejecting the rectification application. 5.1.2. The arguments of the appellant are not found to be acceptable due to the following reasons: 1. According to the information provided in the return the appellant AOP had four members having shares of 5%,5%, 70% & 20% respectively. Therefore, all of them had fixed and determinate shares. 2. Section 164 of the Act deals with 'Charge of tax where share of beneficiaries unknown'. Sub-sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the instant case, the AO was dealing with a petition for rectification u/s 154 and all the issues pointed out by the appellant were beyond the purview of the said section. 4. Assuming but not admitting that in the instant case, the appellant did not file the return as "DISCRETIONARY TRUST CREATED BY WILL "where the share of beneficiaries are not determinate and the provisions of section 164(1)(i) of Act would apply, it remains an undeniable fact that these claims were not made either in the return of income or by filing a revised return. Hon'ble Supreme Court held in Goetze India Ltd. v. CIT [2006] 157 Taxman 1 (SC) that an assessee could not make a claim for deduction other than by filing a revised return. Even though this is not a case where any claim of deduction is involved, however, the principle enunciated in the said case in so far as that the assessee cannot make a new claim other than by filing a revised return would mutatis mutandis apply to the present case as well. 5.2. Therefore, having regard to the facts and circumstances of the case, in the light of the above discussions and respectfully following the principle enunciated in the decision of Hon'ble Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . So there is no share of beneficiaries whether known or unknown as the assessee is trust so charging the assessee as per the provisions of section 164(1) as held by the ld. CIT(A) is incorrect and the relevant facts has not been appreciated and since there is specific provision in section 164(2) the tax should be charged based on that specific section applicable to the trust assessee. The ld. AR of the assessee also submitted that considering the facts of the case even the provision of section 167B will not applicable and the ld CIT(A) has not appreciated the facts of the case of the assessee. When there is specific provision for charging the tax the general provision cannot be made applicable. Thus, we hold that when the provision of section 164(2) specially deals to charge the tax of those trust where the whole or any part of the relevant income is not exempt under section 11 and 12, the relevant provision of the Act is reiterated herein below : Provision of section 164(2) of the Act (2) In the case of relevant income which is derived from property held under trust wholly for charitable or religious purposes, or which is of the nature referred to in sub-clause (iia) of claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery individual other than the individual referred to in items (II) and (III) of this Paragraph or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, not being a case to which any other Paragraph of this Part applies. Even the revenue department website also advise that the tax rate of the trust is as applicable to the Individual and the screen shot of the same is reproduced herein below as to strengthen the discussion so record: Considering that aspect of the matter we are of the considered view that the decision of the ld. CIT(A) to charge the assessee u/s. 164(1) is not correct it should be charged based on the specific provision of the Act u/s. 164(2) of the Act and the tax rate as applicable to that 164(2) will apply to the rate of the AOP/Individual and the initial exemption is also available to such assessee. Based on these observations the ground no. 2 raised by the assessee is allowed. 12. As regards the ground no. 1 raised by the assessee the bench noted that the ld. CIT(A) has not granted the benef ..... X X X X Extracts X X X X X X X X Extracts X X X X
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