2024 (6) TMI 1421

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....e for the year under appeal was filed declaring total income at Rs.76,26,863/- and claimed exemption u/s.12A of the Act. The same was processed vide order u/s.143(1) of the Act dated 26.03.2019 by the CPC Bangalore, wherein a demand is created by not allowing the exemption available to it. Thereafter an application u/s.154 of the Act was filed for rectification of the said order, wherein it was stated by the assessee that its gross receipts were of Rs.3,69,28,893/- and exempt of income over expenditure is of Rs.76,26,864/-, which is more than 17% of the gross receipts. While processing the return CPC Bangalore has taxed the entire excess income over expenditure of Rs.76,26,863/- instead of taxing the excess amount of 15% of the gross receip....

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....vied. Thus, the prayer of the assessee that set off of application excess made in preceding years is to be allowed to the assessee or alternatively taxable income be restricted to Rs.9,43,500/-. 5. On the other hand, ld. Sr. DR vehemently supported the orders of the lower authorities and submitted that when the assessee has failed to apply 85% of the gross receipts, remaining amount should be taxed at the maximum marginal rate and the CPC has made no error, therefore, this case is not under the purview of mistake apparent on record. He, therefore, prayed for confirmation of the orders of the lower authorities. 6. We have considered the rival submissions. It is seen that the assessee has made two claims. First, it had applied more than 8....

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....t of the relevant income of a charitable or religious trust which forfeits exemption by virtue of the provisions of the Income-tax Act in regard to investment pattern or use of the trust property for the benefit of the settlor, etc., contained in section 13(1)(c) and (d) of that Act, the said rate will not apply to the business profits of such trusts which are otherwise chargeable to tax. In other words, where such a trust contravenes the provisions of section 13(1)(c) or (d) of the Act, the maximum marginal rate of income-tax will apply only to that part of the income which has forfeited exemption under the said provisions. 7. Further, by Finance Act, 2023, Section 115BBI has been inserted to the statute which provides a special rate of ....