TaxTMI 
TaxTMI 
2020 (1) TMI 919
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.... u/s 12A of the Income Tax Act, 1961 dated 30th April, 2015. The old registration certificate No. INS/3105 sanctioned u/s 12A of the Income Tax Act, 1961 dated 8th August, 1975 was not at all considered by the Commissioner of Income Tax (Appeals). Copy of Registration Certificate issued u/s 12A is enclosed herewith." 2. Brief facts of the case are that the assessee is a charitable trust registered with Charity Commissioner Mumbai and is also registered under section (u/s) 12A of Income-tax Act. Though the assessee was having registration u/s12A, however, the assessee not claimed exemption under section 11 from several years. For the year under consideration, the assessee filed return of income on 26.07.2012 declaring income of Rs. 19,47,230/- and paid a tax on declared income of Rs. 4,69,004/-. The return was processed u/s 143(1) and the assessee was taxed maximum marginal rate and not as per Income Tax slabs. On appeal before Commissioner of (Appeal), the assessee urged that while filing return of income, the assessee has not claimed exemption u/s 11, even though the assessee was entitled. It was further stated that while filing return of income for the year under consideration, ....
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....e us, the ld. AR of the assessee vehemently relied upon the decision of Hon'ble Jurisdiction High Court in the case of DIT(Exem) vs. Sharadaben Bhagubhai Mafatlal Public Charitable Trust (supra), wherein the Hon'ble Jurisdictional High Court while considering the question of law whether trust was assessable as an individual and consequently entitled to deduction under section 80L. Hon'ble High Court passed the following order. For better appreciation of facts the question of law, facts and the submission of party are extracted below: "10. The assessee trust is a public charitable trust. It came in existence after 1st June, 1973. The assessee filed its return of income on 31st October, 1993. The return was filed as AOP under protest. The AO, accordingly, assessed the assessee as AOP and not as an individual. Being aggrieved the assessee carried the matter in appeal. The Appellate Authority rejected the contention of the assessee that the trust should have been assessed as in individual and not as an AOP. The assessee had claimed deduction under section 80L. This was rejected by the AO and the First Appellate Authority on the ground that the assessee was an AOP and as a....
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....he Tribunal was right in assessing the assessees as an AOP. He contended that in this matter also, the assessees filed their return as AOP. Therefore, they were stopped from claiming status of individual under the Act. Mr. F.B. Andhyarujina, on the other hand, contended that trustees of the public charitable trusts have to be assessed in the capacity of an individual. He contended that an AOP is an association of persons who have come together for a common purpose of earning income. He contended that in the present case the beneficiaries have not come together with such common purpose. They have not set up the trust. They have not authorized the trustees to carry on business. The trustees derive their authority from the settler and no from the beneficiaries. That, all kinds of income of a trust have to be assessed under section 161(1) of the Act. That, whether assessment is made on the trustees under section 161(1), the tax is levied upon and recoverable from a trustee in a like manner and to the same extent as it would be leviable and recoverable from the person represented by him. ON other words, income which comes to the share of a beneficiary has to be assessed as if it was t....
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.... 80L of the Act. That, the charge of tax comes into play after the income has been determined in the manner stated above. The court found that the trustee was an individual and from his individual income, he was entitled to deduction under section 80L of the Act. On the income so computed, the tax has to be charged. Therefore, the assessee was entitled to deduction under section 80L of the Act. Accordingly, it was held that the Tribunal was right in granting the relied under section 80L of the Act. In the case of CIT vs Venue Suresh Sanjay Trust and others (supra), the Madras High Court has held that a discretionary Trust is not an HUF or an AOP. Such a trust would be entitled to deduction under section 80L, as it is an individual. The term individual does not mean a single living human being. It can include a body of individuals constituting a unit for the purposes of the act. Even though the assessment of income is in the hands of the trust, it has to be made in the same manner and to the same extent as it would have been made in the hands of the beneficiaries. Therefore, it was held that the representative assessee in the case of a discretionary trust must be regarded as an in....