TaxTMI 
TaxTMI 
TaxTMI 
2020 (8) TMI 9
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.... as on facts in confirming the assessment order made by Ld. AO by not allowing the basic exemption provided to the assessee because: a. The society is registered under Society Registration Act 1960 where members are fixed being owners of 99 farm units and so not indeterminate. b. Society is registered as AJP accordingly PAN is allotted as AJP thereby status of the assessee is AJP and assessment made in the status of AOP is bad in law. c. Both the lower authorities failed to appreciate that section 167B is not applicable to the societies registered under the society registration act and it is specifically excluding societies even under sub-section (2) with the opening words itself in brackets. d. Both the lower authorities also faile....
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....he association claimed its functioning on the concept of mutuality without indulging in any business activity. For the year under consideration, the assessee filed return of income on 20-7-2013 declaring total income of Rs. 37,080/-. The Assessing Officer in the assessment order dated 29-1-2016, however, assessed interest income of Rs. 1,39,820/- from nonmembers as taxable. The Assessing Officer held the status of the assessee as Association of Persons (AOP) as against claim of the assessee as Artificial Juridical Person (AJP) and applied maximum marginal rate of tax after invoking section 167B of the Income-tax Act, 1961 (in short 'the Act'). On further appeal, the Ld. CIT(A) in his order dated 13-6-2016 upheld the status of the as....
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....ciety registered under the Societies Registration Act 1860. He also raised the issue that assessee has been allotted PAN under the status of Artificial Juridical Person (AJP) and, therefore, assessment of the same by the Assessing Officer as well as Ld. CIT(A) as AOP is not justified. According to him, the provisions of section 167B are applicable only in case of Association of Person or Body of Individuals and assessee being not either of them, the provision of section 167B are not applicable. 4. The learned DR, on the other hand, also appeared through videoconferencing and relied on the order of the Ld. CIT(A). 5. We have heard both the parties on the issue in dispute and perused the material available on record. We find that before the....
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.... of the assessee. 5.2 We find that the Ld. CIT(A) in the impugned order has reproduced, the provision of section 167B of the Act and, thereafter, proceeded to hold that, in the case of the assessee provision of section 167B (2) are applicable. The section 167B(2) prescribe that in case of any Association of Person (not being a case falling under sub-section 1 of 167B ), if total income of the any member of the Association of Person (excluding the share from such Association) exceeds the maximum amount, which is not chargeable to tax under the Finance Act of the relevant year, the tax shall be charged on the total income of the Association at maximum marginal rate. In view of the provision, the Learned CIT(A) held that income of the members....
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....of 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 members at such higher rate or rates, as the case may be, and the balance of the total income of the association or body shall be taxed at the maximum marginal r ate. Explanation.-For the purposes of this section, the individual shares of the members of an association of persons or body of individuals in the whole or any part of the income of such association or body shall be deemed to be indeterminate or unknown if such shares (in relation to the whole or any part of such in....