TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 910
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....ey were heard together and are disposed of by this common and consolidated order. 2. Brief facts of the case as taken from ITA No.1478/Hyd/2018 are that the assessee therein is a trust formed for the benefit of a sole beneficiary. It filed its returns of income for the relevant A.Ys and the returns were initially processed u/s 143(1) of the Act. Thereafter, the AO perused the record and observed that the assessee is an AOP and was required to be charged u/s 167B of the Act, whereas, the individual tax rates were wrongly charged. Observing that this is a mistake apparent from the record, he issued a notice u/s 154 of the Act on 4.12.2017 to rectify the said mistake. 3. The assessee filed its letter dated 27.12.2017 stating that since the d....
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....r ought to have seen that the issue of changing the tax slab was debatable and thus the order could not be rectified u/s.154. 4. The Appellate Commissioner ought not to have confirmed the order of the A.O in determining the tax rate u/s.167B ignoring the fact that the appellant is a specific trust for the benefit of an individual and the share being determinate. 5. The Appellate Commissioner ought to have exercise his powers by determining the Appellant in the status of an individual, notwithstanding the fact that the Appellant itself has declared to be an AOP. 6. Any other grounds which the appellant may urge either at or before the date of hearing". 3. As regards the validity of the proceedings u/s 154, the learned Counsel for the ....
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....stake apparent from the record which could be reviewed u/s 154 of the Act. In support of his contention he placed reliance upon the following case law: i) T.S. Balaram ITO vs. Volkart Bros. 82 ITR 50 (S.C) ii) IInd Additional ITO vs. Atmala Nagaraju - 46 ITR (S.C) iii) CIT vs. Keshri Metal P Ltd- 237 ITR 165 (S.C) 5. Further, he submitted that the assessee being a Trust and beneficiary being a single person and the Trustees not being the beneficiaries, the AOP has to be taxed at individual tax rates only. In support of this contention, he placed reliance upon the following case law: i) CIT vs. Indira Balakrishna 39 ITR 546 (S.C) ii) COT vs. Marsons Beneficiary Trust - 188 ITR 224 (Bombay) iii) CIT vs. Shree Krishna Bandar Trust....
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....tion of persons or body of individuals as aforesaid not being a case falling under sub- section (1) (i) the total income of any member thereof for the previous year (excluding his share from such association or body) exceeds the maximum amount which is not chargeable to tax in the case of that member under the Finance Act of the relevant year, tax shall be charged on the total income of the association or body at the maximum marginal rate; (ii) any member or members thereof is or are chargeable to tax at a rate or rates which is or are higher than the maximum marginal rate, tax shall be charged on that portion or portions of the total income of the association or body which is or are relatable to the share or shares of such member or me....
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.... Mahesh Kumar Khetan was not part of the assessment records of the assessee, but the same is referred to by the AO in the order u/s 154. Therefore, the AO had clearly verified the record of Mr. Mahesh Kumar Khetan to come to the conclusion that his income exceeded the maximum limit of the income which is not chargeable to tax. The learned DR had placed reliance upon the judgment of the Hon'ble Supreme Court in the case of CIT vs. Keshri Metal (P) Ltd (Supra) wherein the Hon'ble Supreme Court had held that reference to a document outside the control and law is impermissible while applying the provisions of section 154 of the Act. The relevant paragraph is reproduced hereunder for ready reference: "6.We have heard learned Counsel. W....
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....hat the original assessments were in accordance with law though in our opinion the High Court was not justified in going into that question. In Satyanarayan Laxminarayan Hegde and ors. v. Millikarjun Bhavanappa Tirumale(1) this Court while Spelling out the scope of the power of a High Court under Art. 226 of the Constitution ruled that an error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions cannot be said to be an error apparent on the face of the record. A decision on a debatable point of law is not a mistake apparent from the record-see Sidhamappa v.. Commissioner- of Income-tax, Bombay(2). The power of the officers mentioned in S. 154 of the Income-tax Act, 1961 to c....