TaxTMI 
TaxTMI 
2022 (10) TMI 824
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....er and to pass a consolidated order for the sake of convenience. 3. First, we shall take up appeal in ITA No. 1677/PUN/2019 for A.Y. 2014-15. 4. The only issue is to be decided is as to whether the CIT(A) justified in confirming the order of CPC, Bangalore of levying tax at the maximum marginal rate instead of rates applicable to individuals. 5. Heard both the parties and perused the material available on record. I note that the assessee is a religious trust but no registration u/s. 12A of the Act was available to the year under consideration. Therefore, the assessee filed return of income declaring a total income of Rs.9,95,188/-. According to the ld. AR, the CPC, Bangalore mechanically proceeded to apply tax rate at maximum marginal ra....
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.... of the trust. Further, the new income accretions thereto by way of acquisition, donations, gift or by any other source shall be called trust properties. Therefore, it is not disputed by the ld. DR that the income so declared is not derived from the properties held by the assessee. As discussed above since there is no dispute with regard to deriving of income from property held under trust which is wholly for charitable or religious purposes, in my opinion, shall be treated as income of the association of persons in the absence of any registration u/s. 12A of the Act at tax rate available to the association of persons. I note that the ld. DR vehemently contested that proviso to sub-section (2) of section 164 is applicable which clearly stat....
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....of 1984 wherein it was held that the earlier Circular No. 320 dated 11-01-1982 superceded by Circular No. 387 of 1984. Further, he held if the shares of beneficiaries of a trust are not indeterminate/specified or unknown the income of the said trust has to be taxed at maximum marginal rate by taking support from Circular No. 387 of 1984. The ld. AR argued that the CIT(A) conveniently taking some portion of the said circular and held maximum rate of tax is applicable to the assessee. He submits that the CIT(A) has to read the entire Circular No. 387 of 1984 as a whole, but not, taking those portions which are not applicable to the assessee. He drew my attention to full text of the said circular at page 3 of the paper book. On perusal of the ....
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....h categories of persons or investments made in contravention of the provisions of the Income Tax Act under Clause (b) and (c), respectively. Therefore, in my opinion, the said Circular No. 387 of 1984 is not applicable to the assessee, as rightly pointed by the ld. AR that the CIT(A) without considering the Point No. 28.1 applied conveniently as if there was a violation of conditions mentioned in Point No. 28.2. 8. Further, the ld. AR placed on record orders of this Tribunal in the case of Shri Hanuman Mandir Trust reported in 84 ITD 83 (Pune- Trib.)(SMC) and in the case of Vijaya Durga Devi Trust in ITA No. 494/PUN/2019. On perusal of the order in the case of Shri Hanuman Mandir Trust (supra) which held the income derived from property he....
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....ax the assessee at the maximum marginal rate, because maximum marginal rate could be applied only if there was failure on the part of the trust under Section 13(1)(c) or 13(1)(d) of the Act which is not the reason for denying benefits of Section 11 in the present case. In view of the above legal position, I hold that Section 164(2) applies and the tax is to be calculated on the AOP on the minimum marginal rate." 9. In the light of above finding of Tribunal in SMC Bench in the case of Shri Hanuman Mandir Trust (supra), I note that the assessee is a religious trust and the income derived from property of the said trust utilized to the deity and there is not dispute with regard to the said fact as it was contended by the ld. AR that the enti....