2025 (9) TMI 1700

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.... No. Addl./JCIT(A)-1, Kolkata/10008/2021-22 and Addl./JCIT(A)-1, Kolkata/10043/2022-23 arising out of the appeals before it against the intimation dated 13.10.2022, 15.06.2023 and 14.02.2024 u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred as 'the Act') by the CPC, Bengaluru (hereinafter referred to as the Ld. AO). 2. The appeals were heard together as they have common questions of law and fact and what comes up is that the assessee's return were processed u/s 143(1) of the Act by denying the refund claimed on the basis that the ld. AO has levied tax on the entire income of the assessee at a flat rate 30% instead of normal slab rate applicable and surcharge has been levied @ 37% instead of assessee's claim of 15% and, further....

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....he Act. The return of income has been filed in the status of Association of Persons and the assessments have been completed on that basis from year to year. It appears that tax authorities have erred in considering the members of the AOP as trustees. In similar circumstances, similarly situated assessee have been benefitted by the coordinate Bench decision in Vidhya Trust vs. DCIT, ITA No.131/Del/2025 and in Rose Trust vs. DCIT, ITA No.3036/Del/2024. As for the sake of convenience, the findings in Vidhya Trust (supra)'s case which were also relied in Rose Trust (supra) are reproduced below:- "7. Considered the rival submissions and material placed on record. We observe that in the current assessment year, lower authorities have app....

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.... a case falling under subsection (1), where individual shares of members are not indeterminate or unknown, in other words, the shares of members is known and fixed is also not applicable to facts of the appellant for the reason mentioned supra. Hence, the rate of MMR under both sub sections (1) and (2) of 1678 is not applicable to appellant' case. 7.2.7. It is pertinent to refer to the Circular of the C8DT in No. 320, dated 11.01.1982. The said circular is reproduced as under: "Circular: No. 320 [F. No. 131(31)/81-TP (Pt.)], dated 11-1- 1982SECTION 167A ASSESSMENT WHERE SHARES OF MEMBERS UNKNOWN) 911. Whether the section is applicable to income received by trustees on behalf of provident funds created exclusiv....

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....usiness or profession are concerned, they will continue to be charged to tax in the manner prescribed by section 164(1)(iv) of the Income-tax Act, as hitherto. Similarly, in the cases of registered societies, trade and professional associations, social and sports clubs, charitable or religious trusts, etc., where the members or trustees are not entitled to any share in the income of the association of persons, the provisions of new section 167 A will not be attracted and, accordingly, tax will be payable in such cases at the rate ordinarily applicable to the total income of an association of persons and not at the maximum marginal rate". 7.2.8. In view of the above, the appeal of the appellant is allowed and AO is directed to tax t....