Rate of tax in the case of chamber of commerce registered u/s 25 of co.Act

[GOPAL HARLALKA]

Chamber of commerce is registered u/s 25 of the Co. Act 1956, Chamber is not registered u/s 12A of the Incometax.

There is surplus of income over expenditure. A.O has calculated tax at maxium marginal rare i.e. 30%

Is A.O. correct. There is circular no.320 dated 11/01/1982 . According to the circular tax will payable at rate

ordinarily applicable to the total income of an A.O.P. and not at the maxium marginal rate.

AI Summary

Tax Dispute: Chamber of Commerce Faces 30% Tax Rate Despite Circular Suggesting Lower A.O.P. Rate Under Companies Act. A chamber of commerce, registered under Section 25 of the Companies Act 1956 but not under Section 12A of the Income Tax Act, has a surplus of income over expenditure. The Assessing Officer (A.O.) has applied the maximum marginal tax rate of 30%. However, a circular (No. 320 dated 11/01/1982) suggests that the tax should be applied at the rate ordinarily applicable to the total income of an Association of Persons (A.O.P.), not the maximum marginal rate.