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TMI Blog2016 (12) TMI 1845X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) - As in the course of processing the returns, the Assessing Officer changed the status of the assessee as AOP and levied tax under Section 164(1) of the Act at maximum marginal rate - HELD THAT:- The assessee admittedly filed their returns of income electronically and the same were processed under Section 143(1) of the Act. Section 143(1) of the Act enables the Assessing Officer to make prima facie adjustment on the basis of the material available on record. Changing of status is something outside the purview of the prima facie adjustment under Section 143(1) of the Act. Therefore, this Tribunal is of the considered opinion that changing of status of the assessees cannot be made while processing return under Section 143(1) of the Act. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levy of tax at maximum marginal rate under Section 164(1) of the Act are debatable issue, therefore, it cannot be a subject matter of proceeding under Section 143(1) of the Act. In other words, according to the Ld. representative, if the Assessing Officer intends to change the status of the assessees and levy tax at maximum marginal rate under Section 164(1) of the Act, he has to take necessary step to scrutinize the matter after giving opportunity to the assessee by issuing a notice. In the guise of making prima facie adjustment, the status of the assessee and rate of tax cannot be changed at all. 3. Placing reliance on the judgment of Bombay High Court in W.P.No.2424 of 2016 in Shapoorji Pallonji and Co. Pvt. Ltd. v. DCIT, a copy of whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e option to assess the beneficial interest either in the hands of the trustee in a representative capacity or assessee directly in the hands of the beneficiary. In both the cases, what was taxed was the interest of the beneficiary for the trust properties and not the corpus of the trust properties. Therefore, according to the Ld. D.R., the CIT(Appeals) found that there is uncertainty in the trust and vesting of income in the hands of the future beneficiaries, hence, the shares of allocation are treated as indefinite and uncertain, therefore, the income of the Trusts is liable for taxation at maximum marginal rate under Section 164(1) of the Act. 5. We have considered the rival submissions on either side and perused the relevant material av ..... X X X X Extracts X X X X X X X X Extracts X X X X
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