KMR Educational Society,, Hyderabad v. ACIT, Central Circle-1,, Hyderabad

ITA 1300/HYD/2014 | 2008-2009
Pronouncement Date: 26-11-2014 | Result: Allowed

Appeal Details

RSA Number 130022514 RSA 2014
Assessee PAN AABTK3012F
Bench Hyderabad
Appeal Number ITA 1300/HYD/2014
Duration Of Justice 4 month(s) 22 day(s)
Appellant KMR Educational Society,, Hyderabad
Respondent ACIT, Central Circle-1,, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 26-11-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 26-11-2014
Assessment Year 2008-2009
Appeal Filed On 04-07-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI P.M. JAGTAP ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN JUDICIAL MEMBER ITA NO. 1300/HYD/2014 ASSESSMENT YEAR 2008-09 M/S. KMR EDUCATIONAL SOCIETY HYDERABAD PAN: AABTK3012F VS THE ASST. CIT CENTRAL CIRCLE-1 HYDERABAD APPLICANT RESPONDENT APPELLANT BY: SRI S. RAMA RAO RESPONDENT BY: SRI RAMAKRISHNA BANDI DATE OF HEARING: 12.11.2014 DATE OF PRONOUNCEMENT: 26.11.2014 ORDER PER ASHA VIJAYARAGHAVAN JM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-I HYDERABAD DATED 28.4.2014 FOR A.Y. 2008-0 9. 2. THE ASSESSEE IS A SOCIETY REGISTERED UNDER THE ANDH RA PRADESH SOCIETIES REGISTRATION ACT 2001. FOR THE ASSESSMEN T YEAR 2008-09 THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 153A ON 30.12.2010 DETERMINING THE INCOME AT RS. 83.71.6 83. THE ASSESSING OFFICER WORKED OUT THE TAX PAYABLE ACCORDING TO THE RATES APPLICABLE FOR ANY OTHER ASSOCIATION OF PERSONS. THE ASSESSING OFFICER THEREAFTER ISSUED A NOTICE U/S 154 AND RECTIFIED THE ASSESSMEN T BY PASSING AN ORDER U/S 154 OF THE IT ACT ON 2.8.2011. ACCORDING TO THE ASSESSING OFFICER THE RATE APPLICABLE TO AOP AND INDIVIDUALS IS NOT APPLICABLE TO THE ASSESSEE AND THE MAXIMUM MARGINAL RATE IS AP PLICABLE IN VIEW OF THE PROVISIONS OF S. 167B OF THE ACT. AGGRIEVED THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) AND SUBMITTED TH AT SEC. 167B HAS NO APPLICATION TO THE SOCIETY REGISTERED UNDER THE SOCIETIES ACT OR ANY OTHER SOCIETY FORMED IN ACCORDANCE WITH THE SIM ILAR LAWS. THE 2 ITA NO. 1300/HYD/2014 M/S. KMR EDUCATIONAL SOCIETY ======================= ASSESSEE SUBMITTED THAT THE ORDER OF THE ASSESSING OFFICER PASSED U/S 154 IS WRONG. 3. DURING THE COURSE OF APPEAL PROCEEDINGS THE AR OF THE ASSESSEE HAS SUBMITTED THAT IN THE ORDER U/S. 154 THE ASSESSING OFFICER TAXED THE ASSESSEE AT THE MAXIMUM MARGINAL RATE IN VIEW OF S. 167B OF THE ACT. IT WAS FURTHER SUBMITTED THAT THE SAID SECTION CLEARLY MENTIONS THAT IT DOES NOT APPLY TO A SOCIETY REGIST ERED UNDER THE SOCIETIES REGISTRATION ACT. COPIES OF CERTIFICATE OF REGISTRATION AND MEMORANDUM OF THE SOCIETY WERE ALSO FILED. HE FURT HER SUBMITTED THAT THESE DOCUMENTS INDICATE THAT IT IS A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT 2001 THEREFORE THE PR OVISIONS OF S. 167B OF THE ACT HAVE NO APPLICATION. 4. THE CIT(A) HELD THAT THE PROVISIONS OF S. 167B ARE APPLICABLE TO A SOCIETY IF THE INDIVIDUAL SHARES OF THE MEMBERS A RE INDETERMINATE OR UNKNOWN ON THE DATE OF FORMATION OR AT ANY TIME THE REAFTER AND IN THE INSTANT CASE EVEN THOUGH THE ASSESSEE SOCIETY CLAIMED THAT THE SOCIETY IS REGISTERED AND FILED MEMORANDUM OF THE S OCIETY IT DOES NOT SPELL OUT THE INDIVIDUAL SHARES OF THE MEMBERS OF T HE SOCIETY. THE CIT(A) OBSERVED THAT FROM THE PROVISIONS OF S. 167B IT IS CLEAR THAT IF THE INDIVIDUAL SHARES OF THE MEMBERS OF THE SOCIETY ARE INDETERMINATE MAXIMUM MARGINAL RATES ARE APPLICABL E. FURTHER THE CIT(A) NOTED THAT BEFORE PASSING ORDER U/S. 154 ON 2.8.2011 THE ASSESSING OFFICER HAS ISSUED A NOTICE U/S. 154 ON 1 3.7.2011 FOR WHICH THERE WAS NO REPLY FROM THE ASSESSEE AND THEREFORE THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE SOCIETY H AS NO OBJECTION FOR THE PROPOSED MODIFICATION AND PASSED ORDER U/S. 154 APPLYING MAXIMUM MARGINAL RATES. THE CIT(A) HELD THAT SINCE THE PROVISIONS OF S. 167B ARE RIGHTLY APPLIED BY THE ASSESSING OFF ICER HE DID NOT SEE ANY REASON TO INTERFERE IN THE ACTION OF THE ASSESS ING OFFICER. ACCORDINGLY THE GROUND RAISED BY THE ASSESSEE IN T HIS REGARD WAS DISMISSED BY HIM. 3 ITA NO. 1300/HYD/2014 M/S. KMR EDUCATIONAL SOCIETY ======================= 5. BEFORE US THE LEARNED AR SUBMITTED THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS BOTH ON FACTS AND IN LAW. THE AO ERRED IN HOLDING THAT THE PROVISIONS OF S. 167B OF THE AC T ARE APPLICABLE TO THE ASSESSEE. THE ASSESSING OFFICER ERRED IN ARRIV ING AT THE TAX PAYABLE AND THE INTEREST PAYABLE BY THE ASSESSEE BY APPLYING THE PROVISIONS OF S. 154 WHEN NO SUCH ORDER IS TO BE PA SSED BY THE ASSESSING OFFICER. 6. THE LEARNED DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED MATERIAL AVAILABLE ON RECORD. SECTION 167B OF THE ACT READS AS UNDER: '167B. (1) WHERE THE INDIVIDUAL SHARES OF THE MEMBE RS OF AN ASSOCIATION OF PERSONS OR BODY OF INDIVIDUALS (OTHER THAN A COMPANY OR A CO-OPERATIVE SOCIETY OR A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT 1860 (21 OF 1860) OR UNDER ANY LAW CORRESPONDING TO THAT ACT IN FORCE IN ANY PART OF INDIA) IN THE WHOL E OR ANY PART OF THE INCOME OF SUCH ASSOCIATION OR BODY ARE INDETERMINATE OR UNKNOWN TAX SHALL BE CHARGED ON THE TOTAL INCOME OF THE ASSOCIATION OR BODY AT THE MAXIMUM MARGINAL RATE:' 8. THE LEARNED COUNSEL SUBMITTED COPIES OF THE FOLLOWI NG BARE ACTS: A) SOCIETIES REGISTRATION ACT 1860 B) ANDHRA PRADESH SOCIETIES REGISTRATION ACT 2001 9. THE LEARNED COUNSEL SUBMITTED THAT FROM THE PREAMBL E TO THE SAID ACTS IT CAN BE SEEN THAT BOTH THE LAWS RELATE TO THE REGISTRATION OF SOCIETIES PROMOTING ART FINE ARTS CHARITY CRA FTS ETC. THE PURPOSE OF BOTH THE ACTS IS SAME. SECTION 32 OF THE ANDHRA PRADESH SOCIETIES REGISTRATION ACT 2001 REPEALED APPLICATION OF THE PROVISIONS OF THE SOCIETIES REGISTRATION ACT 1860 IN THE STATE OF AND HRA PRADESH. 10. SUB-SECTION (2) OF S. 32 MENTIONS THAT IF THE SOCIE TY HAS DONE ANY ACT UNDER THE SOCIETIES REGISTRATION ACT 1860 I T WOULD BE DEEMED 4 ITA NO. 1300/HYD/2014 M/S. KMR EDUCATIONAL SOCIETY ======================= TO HAVE BEEN TAKEN UNDER THE ANDHRA PRADESH SOCIETI ES REGISTRATION ACT 2001. IN SECTION 2 DEFINITIONS DEFINES 'M EMORANDUM MEANS THE MEMORANDUM OF ASSOCIATION OF A SOCIETY AS ORIG INALLY FRAMES OR AN ALTERED FROM TIME TO TIME IN PURSUANCE OF THE PR OVISIONS OF THIS ACT OR THE SOCIETIES REGISTRATION ACT 1860. 11. IT WAS FURTHER SUBMITTED THAT FROM READING OF THE P ROVISIONS OF BOTH THE ACTS THE ANDHRA PRADESH SOCIETIES REGISTR ATION ACT IS SIMILAR TO THE SOCIETIES REGISTRATION ACT OF 1860. IT WAS SUBMITTED THAT THE SOCIETIES REGISTRATION ACT 1860 WAS IN EXISTENCE IN THE ENTIRE BRITISH INDIA AND AFTER FORMATION OF STATES EACH STATE HAS ENACTED ITS OWN ACT REPEALING THE SOCIETIES REGISTRATION ACT 1860. THE RESPECTIVE STATE ACT PROVIDED A SAVING CLAUSE AND RATIFIED THE ACTION TAKEN BY THE SOCIETIES UNDER THE SOCIETIES REGISTRATION ACT 1860. 12. WE HAVE GONE THROUGH THE ACT BOTH 1860 AND 2001 AND THE SUBMISSIONS OF THE LEARNED COUNSEL. WE FIND THAT T HE A.P. SOCIETIES REGISTRATION ACT 2001 IS CORRESPONDING TO THE SOCI ETIES REGISTRATION ACT 1860. THE LEARNED COUNSEL HAS SUBMITTED COPY OF CERTIFICATE OF REGISTRATION AND MEMORANDUM OF THE SOCIETY WHICH IN DICATE THAT IT IS A SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATI ON ACT 2001. HENCE THE PROVISIONS OF S. 167B HAVE NO APPLICATION TO TH E SOCIETY REGISTERED UNDER THE SOCIETIES ACT OR ANY OTHER SOCIETY FORMED IN ACCORDANCE ON SIMILAR LINES. HENCE APPEAL OF THE ASSESSEE IS ALLO WED. 13. IN THE RESULT ASSESSEE'S APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 26 TH NOVEMBER 2014 SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER HYDERABAD DATED THE 26 TH NOVEMBER 2014 TPRAO 5 ITA NO. 1300/HYD/2014 M/S. KMR EDUCATIONAL SOCIETY ======================= COPY TO: 1. M/S. KMR EDUCATIONAL SOCIETY C/O. SRI S. RAMA RAO FLAT NO. 102 SHRIYA'S ELEGANCE H. NO. 3-6-643 ST. NO. 9 HIMAYATNAGAR HYDERABAD-500 029. 2. THE ASST. CIT CENTRAL CIRCLE - 1 AAYAKAR BHAVAN BASHEERBAGH HYDERABAD. 3. THE CIT(A) - I HYDERABAD. 4. THE CIT (CENTRAL) HYDERABAD. 5. THE DR A - BENCH ITAT HYDERABAD.