9911796707
TMI Blog2024 (6) TMI 1049X X X X Extracts X X X X X X X X Extracts X X X X ..... ot so, and neither has any been stated by the Revenue at any stage. The language of the provision is unambiguously clear, so that an assessee is not entitled to, save where an option is specifically exercised in its respect, and before expiry of the time allowed for furnishing the return of income u/s. 139(1) of the Act, accumulate or set aside for application in excess of 15% of it s income from the property held under trust. That is to say, it is necessarily to, save where an option is specifically exercised in its respect which is not so in the instant case, apply 85% of it s income for charitable purposed during the relevant year. The assessee, as afore-said, having not done so, it s income is accordingly to be limited thereto, i.e., 85 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same in disposal of the appeal. Application of section 167B - prescribing the maximum marginal rate - Section 167B, as a reading of the provision would show, is only where the shares of the beneficiaries of the trust are not known. The assessee, registered as a charitable trust, is a public body and, accordingly, there is no question of it s beneficiaries being individual members, whose shares have therefore to be defined. The application thereof in the instant case is wholly misconceived. The matter in fact stands clarified by the Board per it s Circular No. 320, dated 11/01/1982, also binding on the Revenue. The tax rate accordingly is to be computed as per the normal rates as applicable to Association of Persons. The same, in our view, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome for the relevant year on 14.09.2018, disclosing income at Rs. 87,430, i.e., after deducting 15% of it s gross income of Rs. 1,02,862, returning nil tax liability thereon. The same was processed u/s. 143(1)(a) of the Act, denying the same and computing the tax liability on the returned gross income at Rs. 30,858. The assessee moved a rectification application on 12.11.2019, disputing the said adjustment to it s returned income. The said application is not on record for us to ascertain if the assessee had also disputed the tax rate applied in determining it s tax liability on the assessed income. The rectification order, which is in the form of a statement, reiterates the Revenue s stand, so that the assessee, unsuccessful in the first, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous year of the person in receipt of the income (a) income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of fifteen per cent of the income from such property; (b) to (d) 4.3 The issue arising, in fine, is the applicability of section 11(1)(a) of the Act in the absence of any application of its income for it s objects by the assessee, a charitable trust, during the relevant year. We see no reason for it being not so, and neither has any been stated by the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be, held under trust in part, by any amount (i) for the reason that the whole or any part of the income has not been received during that year, or (ii) for any other reason, then (a) in the case referred to in sub-clause (i), so much of the income applied to such purposes in India during the previous year in which the income is received or during the previous year immediately following as does not exceed the said amount, and (b) in the case referred to in sub-clause (ii), so much of the income applied to such purposes in India during the previous year immediately following the previous year in which the income was derived as does not exceed the said amount, may, at the option of the person in receipt of the income (such option to be ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that leads to the impugned demand, is the tax rate applied, which has been by the Revenue at the maximum marginal rate, duly raised by the assessee per its grounds of appeal before us. The assessee surely did not raise this issue before the ld. CIT(A), whose adjudication accordingly does not include the same. We, nevertheless, consider the same, being a legal issue, with the relevant facts available on record, adjudicating the same in disposal of the appeal, upon hearing Smt. Devi, the ld. Sr. DR. 4.6 We again find no reason for application of section 167B of the Act, prescribing the maximum marginal rate in the instant case, which is one of a charitable trust. Section 167B, as a reading of the provision would show, is only where the shares ..... X X X X Extracts X X X X X X X X Extracts X X X X
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