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TMI Blog2023 (1) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... [something which is not disputed before us by the revenue] then, as indicated hereinabove, the maximum marginal rate of tax could not have been applied to the appellant/assessee. Whether the CIT(A), having concluded that the provisions of Sections 11 and 12 of the Act were not applicable to the appellant/assessee in the AY in issue , he ought to have then gone on to rule on what was, really, an alternate ground, i.e., should gross receipts, simpliciter, be brought to tax . In other words, should gross receipts or the taxable income arrived at, after adjusting deductible expenses be subjected to tax? - Concerning this aspect as well, according to us, CIT(A) side-stepped the contention, although, a specific ground had been raised by the appellant/assessee in the appeal filed before the CIT(A). Respondent cannot but accept that in the succeeding AY i.e., AY 2015-16, CPC has brought to tax that amount which constitutes excess of income over expenditure i.e., from gross receipts, deductible expenses have been adjusted. We are also of the view that since the return of the appellant/assessee was processed under Section 143(1) of the 1961 Act, if there were any doubts, scrutin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Appellant has been incorrectly taxed at the maximum marginal rate ignoring the specific and unambiguous provisions of the law? (iii) Whether in the facts and circumstances of the case, the Tribunal erred in not appreciating that the alterations made were neither prima facie adjustments nor apparent from information on record in the return and thus were not permissible under the ambit of Section 143(1) of the Act? 2. The broad facts required to be noticed to adjudicate the instant appeal, are the following: 2.1. The appellant before us i.e., the assessee had filed its return for the aforementioned AY i.e., AY 2014-15, at which point in time, it had declared income amounting to Rs.2,39,350/-. 2.2. The return filed by the appellant/assessee was processed by the Centralized Processing Centre, Bangalore [in short, CPC ] under Section 143(1) of the Income Tax Act, 1961 [in short, 1961 Act ]. The CPC pegged the taxable income of the appellant/assessee at Rs.13,41,461/-. While doing so, expenses incurred by the appellant/assessee towards activities carried out by it, amounting to Rs.3,22,837/- were disallowed. These activities involved holding Gurupurab and Kirt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant/assessee was that it was entitled to claim exemption under Section 11 and 12 of the 1961 Act, having regard to the first proviso to Section 12A(2) of the Act. 7.1. Mr Agarwal, in this context, states that there is no dispute about the fact that the appellant/assessee had applied for registration under Section 12AA of the 1961 Act on 27.11.2015 and therefore, the provisions of Section 11 and 12 of the 1961 Act would kick in only in AY 2016-17 and thereafter. 7.2. In other words, the argument was that, for the AY in issue i.e., AY 2014-15, the appellant/assessee could not claim exemption under Section 11 and 12 of the Act, which is what has been held by the CIT(A) and confirmed by the Tribunal. 8. We have heard the learned counsel for the parties and perused the record. 8.1 The record, as presently made available to us, shows that the appellant/assessee was registered as a society as far back as on 10.02.1978 under the 1860 Act. A copy of the said certificate is available on record and is marked as Annexure A-2. 8.2. If this position is correct, then on a plain reading of Section 167B of the Act, one can only conclude that the maximum marginal rate cannot be mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ..The assessing officer erred in law and on fact, in assessing the income of the assessee society at maximum marginal rate instead of applying slab rate applicable in case of AOP. Thus necessary directions should be given to compute tax by applying slab rates on the assessee .. [Emphasis is ours] 10. Clearly, the assertion made by the appellant/assessee in one of the grounds taken in the appeal was that it was constituted as a society. If this position is correct, [something which is not disputed before us by the revenue] then, as indicated hereinabove, the maximum marginal rate of tax could not have been applied to the appellant/assessee. 11 This brings us to the other aspect of the matter i.e., as to whether the CIT(A), having concluded that the provisions of Sections 11 and 12 of the Act were not applicable to the appellant/assessee in the AY in issue, he ought to have then gone on to rule on what was, really, an alternate ground, i.e., should gross receipts, simpliciter, be brought to tax . In other words, should gross receipts or the taxable income arrived at, after adjusting deductible expenses be subjected to tax? 11.1. Concerning this aspect as well, ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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