Section 167B of Income Tax Act Not Applicable to Societies Under Andhra Pradesh Societies Registration Act, Tribunal Rules.

The Tribunal concluded that section 167B of the Income Tax Act does not apply to societies registered under the Andhra Pradesh Societies Registration Act, 2001. This decision was based on the similarity of this Act to the Societies Registration Act, 1860. Consequently, the Tribunal allowed the assessee's appeal, overturning the CIT(A)'s decision, and set aside the application of the maximum marginal rate under section 167B to the assessee society.

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The appeal before the Appellate Tribunal concerned the application of section 167B of the Income Tax Act to a society registered under the Andhra Pradesh Societies Registration Act, 2001 for the assessment year 2008-09. The core legal issue was whether the maximum marginal rate under section 167B applied to the assessee society.The Assessing Officer had initially determined the income of the assessee at Rs. 83,71,683 and applied the maximum marginal rate under section 167B through a rectification order passed under section 154 of the IT Act. The assessee contended that section 167B did not apply to a society registered under the Societies Registration Act and challenged the Assessing Officer's order before the CIT(A).The CIT(A) upheld the application of section 167B by the Assessing Officer, noting that the individual shares of the society members were indeterminate as per the Memorandum of the Society. The CIT(A) also highlighted the lack of response from the assessee to the notice issued under section 154, indicating no objection to the proposed modification. Consequently, the CIT(A) dismissed the assessee's appeal.Upon appeal to the Tribunal, the learned AR argued that the Assessing Officer's order was erroneous in fact and law, emphasizing that section 167B did not apply to the assessee society. The Tribunal considered the relevant legal framework, including section 167B, and the Andhra Pradesh Societies Registration Act, 2001. The Tribunal noted that the Andhra Pradesh Societies Registration Act, 2001 was similar to the Societies Registration Act, 1860, and the society in question was registered under the former Act. Therefore, the Tribunal concluded that section 167B did not apply to societies registered under such Acts, allowing the assessee's appeal.In summary, the Tribunal held that the provisions of section 167B did not apply to a society registered under the Andhra Pradesh Societies Registration Act, 2001. The Tribunal's decision was based on the similarity between the Andhra Pradesh Societies Registration Act, 2001 and the Societies Registration Act, 1860, and the registration status of the assessee society. Consequently, the Tribunal allowed the assessee's appeal, overturning the CIT(A)'s decision and setting aside the application of the maximum marginal rate under section 167B to the assessee society.

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