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TMI Blog2020 (8) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled to the benefit of exemption from the minimum amount and liable to the incidence of maximum marginal rate income of section 167B(ii) of the Act. CIT(A) on the issue in dispute is well reasoned. A society registered under the Societies Registration Act, 1860, has been excluded from the provision of section 167B9(1). Thus, in case of any society, which though has been held as Association of Person and income of such Association is indeterminate; such society will be excluded from invoking of maximum marginal rate. But, the provision of section 167B(2) are applicable in case of Association of persons not being a case falling under sub-section 1. Unambiguous provisions of 167B(2), if income of any member (other than the share of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies 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 failed to appreciate that rates of income tax applicable to co-operative societies cannot be applied on the societies registered under societies registration act 1860. e. Both the lower authorities have not appreciated that section 167B is applicable to the AOPs and BOIs engaged in the business whose shares are indeterminate but societies registered under society registration act, company and co-operative societies have been specifically excluded 2. The Ld. CIT(A) has erred in law as well as on facts in confirming the income assessed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessee as AOP. Against the said order of the Ld. CIT(A), the assessee before the Income-tax Appellate Tribunal (in short 'the Tribunal') raised the only issue that irrespective of the status of the assessee held by the Assessing Officer as AOP, the assessee being registered under Societies Registration Act, 1860 provision of section 167B were not applicable. The Tribunal in its order dated 12-4-2017 restored the matter back to the file of the Assessing Officer to examine the applicability of section 167B in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 Tribunal in first round of the proceeding, the assessee did not dispute assessing of the assessee in the status of AOP and the only issue which was disputed was of applicability of section 167B and taxing at maximum marginal rate. The relevant part of the order of the Tribunal is reproduced as under: 5. The Learned CIT(Appeals) held that the assessee is to be taxed as AOP because AJP is only to be deemed have an existence only where does not covered in any other clauses of section 2(31). Before us the only limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 being in the slab of maximum rate of tax, the society is not entitled to the benefit of exemption from the minimum amount and liable to the incidence of maximum marginal rate income of section 167B(ii) of the Act. 5.3 In our opinion, the finding of the Learned CIT(A) on the issue in dispute is well reasoned. A society registered under the Societies Registration Act, 1860, has been excluded from the provision of section 167B9(1). Thus, in case of any society, which though has been held as Association of Perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 income) are indeterminate or unknown on the date of formation of such association or body or at any time thereafter. 5.4 In view of the clear and unambiguous provisions of 167B(2), if income of any member (other than the share of such Association) is higher than the basic exemption limit of the relevant year, the income of the Association is chargeable at the maximum marginal rate. 5.5 Before us, the assessee has not disputed the finding of the Learned CIT(A) that income of its member during the year under consideration exceeds ..... X X X X Extracts X X X X X X X X Extracts X X X X
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