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TMI Blog2020 (1) TMI 919X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 19,47,230/- but the tax was computed at maximum marginal rate @ 30%. This was incorrect, invalid and not justified. (b) The Assessing Officer erred in calculation of income tax including interest of ₹ 6,63,365/- on returned income even though the status of the assessee is mentioned as a charitable trust in the return of income. (c) The Commissioner of Income Tax (Appeals) erred in considering only new registration certificate No. 47339 sanctioned 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 file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is entitled to be treated as individual for the purpose of tax rate. 4. On the other hand, the ld. DR for the Revenue supported the order of lower authorities. 5. We have considered the rival submissions of the parties and perused the material available on record. There is no dispute that assessee is trust. Further while filing return of income, the assessee has not claimed exemption u/s 11. The assessee was treated as AOP by Assessing Officer and taxed at marginal rate. The action of Assessing Officer was offered by Ld. CIT(A). Before 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 charitab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns Beneficiary Trust and Ors., has no application to this case. He contended that the said judgment was under section 161 and section 164 of the Income Tax Act. He contended that the said two sections cannot apply to a public trust. He contended that section 80L applied to individuals. That, the said section did not apply to AOP. Hence, the assessee was not entitled to claim deduct in under section 80L. He contended that under identical circumstances, in the case of CIT vs G.B.J. Seth and C.O.J. Seth, the Madhya Pradesh High Court has held that since the assessee. In that matter, had never disputed their status as an AOP., the 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or an artificial juridical person equated with an individual. The trustee acts for each individual beneficiary. He is responsible for the tax liability of such an individual. Therefore, the assessment is to be made on the trustee as an individual in his representative capacity. That fact that beneficiaries are a group of individuals does not mean that the liability of the assessee is of AOP. This judgment of the Tribunal was upheld by the Madras High Court in the above judgment. The Madras High Court held that the determination of the total income depended on various provisions of the Income Tax Act which took into consideration deductions to be provided under section 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the income earned by the trust. Accordingly, it was held that the trustees were not assessable as AOP. In view of the above judgment, the Tribunal was right in coming to the conclusion that the assessee trust ought to have been assessed in the status of an individual. The judgment of the Madhya Pradesh High Court in the case of CIT vs G.B.J. Seth and C.O.J. Seth, has no application to the facts of this case. In the matter, the assessees were executors of the will. They were assessed in respect of the income of the estate of the deceased in the status of an AOP. Relief under section 80L was denied. The above contentions were not advanced. It was contended on behalf of the assessees that the assessees could not have been assessed as an AOP. However, that question was not referred to the High Court. The High Court, therefore, did not go into the question. The question did not arise for determination. Hence the judgment has no application. 13. Accordingly question No. 1 is answered in the affirmative i.e. in favour of the assessees and against the department. 6. Considering the decision of Hon ble Bombay High Court, wherein the trus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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