Vijayawada Sri Lakshmi Narasimha Ramanuja Kutam Trust

IN THE INCOME TAX APPELLATE TRIBUNAL
VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM
BEFORE SHRI V. DURGA RAO, HON'BLE JUDICIAL MEMBER
ITA No. 60/VIZ/2017

(Asst. Year : 2010-11)
M/s. Vijayawada Sri Lakshmi Vs. ACIT, Circle-1(1),

Narasimha Ramanuja Kutam Vijayawada.
Trust, Managing Trustee :
Ch. Sita Rama Chandra Murthy,
D.No. 11-11-09, Vatturi vari St.,
Vijayawada.
PAN No. AAATV 1602 P

(Appellant) (Respondent)
Assessee by : None
Department By : Shri R.S. Aravindaksham - Sr.DR
Date of hearing : 14/09/2017.

Date of pronouncement : 06/10/2017.
ORDER
This is an appeal filed by the assessee against the order of
Commissioner of Income Tax (Appeals), Vijayawada, dated 28/09/2016
for the Assessment Year 2010-11.
2. Facts are in brief that the assessee is a trust granted registration
under section 12A of the Act on 04/02/1998. The activity of the trust is
to assist and serve the devotees visiting the Ranganadha Temple at
Srirangam and to conduct some religious festivals. The assessee-trust
is claiming its income exempt under section 11 & 12 of the Act. The
source of income of the assessee-trust is mainly from rent receipts and

2
ITA No. 60/VIZ/2017
(M/s. Vijayawada Sri Lakshmi Narasimha Ramanuja Kutam Trust)
interest from bank. The total receipts during the previous year relevant
to the assessment year is of ₹ 1,17,414/- and the assessee-trust has
not spent 85% of its receipts for the object of the society and there was
surplus of income of ₹ 71,837/- as per income & expenditure statement
which is brought to tax at maximum marginal rate and accordingly
assessment is completed.
3. Being aggrieved, assessee carried the matter in appeal before the
ld. CIT(A). It was submitted before the ld. CIT(A) that the income
brought to tax by the Assessing Officer maximum marginal rate is not
correct and the entire income is exempt being assessee having 12A
registration. The ld. CIT(A) after considering the explanation of the
assessee and also by considering all the details, he confirmed the order
of the Assessing Officer by observing as under:-
“6. I have perused the submission of the appellant. The income

derived from property held under trust wholly for charitable or religious
purposes is exempt provided 85% of its income derived from the
property held under trust is applied to such purposes in India (as per
Sec. 11(1)(a) & 11(1)(b) of the IT Act.)
6.1 The details of appellant’s income and expenditure account for
Assessment Year 2010-11 are as follows:-
Rental receipt received by appellant ₹ 1,15,440

Add: Interest on bank S.B. A/c ₹ 1,974
Total gross receipt of income ₹ 1,17,414
Less: Municipal taxes paid ₹ 14,775
Other expenditure like puja/salary/
Electrical charges ₹ 30,802
Total expenditure ₹ 45,577
Surplus of income over expenditure ₹ 71,837/- (₹ 1,17,414 (-) ₹ 45,577)
6.2 Thus it is evident that the appellant had not applied 85% of the
surplus amount for the purposes of trust, it had also admitted that
permission was not sought for accumulation of the surplus amount u/s.
11(2) of the Act. Consequently, Assessing Officer determined the
taxable income at Rs.71,840/- on the ground that 85% of the income
3
ITA No. 60/VIZ/2017
was not utilized for charitable purposes during the relevant

Assessment Year.
6.3 Appellant in its petition us 154 of the Act dated 30/04/2013
claimed that it did not seek permission for accumulation of income by
filing an application in Form No.10 on the belief that its gross income
itself is below taxable income and hence not liable to tax. This claim of
appellant is not in accordance with the provisions of IT Act. In the
case of trusts, any surplus of income over expenditure is taxable if 85%
of such surplus was not utilized for the objects of the trust during
relevant previous year and permission for accumulation of the surplus
was not sought as per provisions of Sec.11(2) of the Act
6.4 As conditions stipulated in the provisions of the Act are not
complied with by appellant, I am in agreement with the view of
Assessing Officer that surplus of income over expenditure (i.e.)
Rs.71,840/- is to be brought to tax
6.5 Appellant in his rectification petition dated 30.04,2013 claimed
that it had to be taxed as an AQP at normal slab rates of income tax. It
claimed this as a mistake apparent from record. In my view,
determination of status of appellant (either AOP or otherwise) requires a
long-drawn process of reasoning on points on which there will be two
opinions. It is not a mistake apparent on record.
6.6 Hon’ble Madras High Court in the case of Anasuya Muthanna Vs.
CIT (1998) 232 ITR 561 (Mad) held that where share of beneficiary is
unknown and undeterminate, the assessee trust is subject to maximum
marginal rate, In my view, appellant trust is discretionary trust. Hence,
it is liable to be assessed as per the provisions of Sec.164(1). Assessing
Officer’s action of charging maximum marginal rate, in my view, is in
order.”
4. I have gone through the assessment order and also the order of
the ld. CIT(A). The ld. CIT(A) has considered each and every aspect of
the issue raised by the assessee and accordingly decided the appeal. I
find no reason to interfere with the order passed by the ld. CIT(A). In
view of the above, the appeal filed by the assessee is dismissed.
5. In the result, appeal filed by the assessee is dismissed.
Order Pronounced in open Court on this 06th day of October, 2017.
Sd/-
(V. DURGA RAO)
Judicial Member
Dated : 06 t h October, 2017.
4
ITA No. 60/VIZ/2017
vr/-
Copy to:
1. The Assessee - M/s. Vijayawada Sri Lakshmi Narasimha

Ramanuja Kutam Trust, Managing Trustee : Ch. Sita Rama
Chandra Murthy, D.No. 11-11-09, Vatturi vari St., Vijayawada.
2. The Revenue – ACIT, Circle-1(1), Vijayawada.
3. The CIT(Exemptions), Hyderabad.
4. The CIT(A), Vijayawada.
5. The D.R., Visakhapatnam.
6. Guard file.
By order
(VUKKEM RAMBABU)
Senior Private Secretary,
ITAT, Visakhapatnam.

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IN THE INCOME TAX APPELLATE TRIBUNAL

VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM

BEFORE SHRI V. DURGA RAO, HON'BLE JUDICIAL MEMBER

ITA No. 60/VIZ/2017

M/s. Vijayawada Sri Lakshmi Vs. ACIT, Circle-1(1),

PAN No. AAATV 1602 P

Date of hearing : 14/09/2017.

This is an appeal filed by the assessee against the order of

Commissioner of Income Tax (Appeals), Vijayawada, dated 28/09/2016

for the Assessment Year 2010-11.

2. Facts are in brief that the assessee is a trust granted registration

to assist and serve the devotees visiting the Ranganadha Temple at

Srirangam and to conduct some religious festivals. The assessee-trust

source of income of the assessee-trust is mainly from rent receipts and

to the assessment year is of ₹ 1,17,414/- and the assessee-trust has

surplus of income of ₹ 71,837/- as per income & expenditure statement

which is brought to tax at maximum marginal rate and accordingly

3. Being aggrieved, assessee carried the matter in appeal before the

brought to tax by the Assessing Officer maximum marginal rate is not

registration. The ld. CIT(A) after considering the explanation of the

of the Assessing Officer by observing as under:-

“6. I have perused the submission of the appellant. The income

Rental receipt received by appellant ₹ 1,15,440

was not utilized for charitable purposes during the relevant

view of the above, the appeal filed by the assessee is dismissed.

5. In the result, appeal filed by the assessee is dismissed.

Order Pronounced in open Court on this 06th day of October, 2017.

1. The Assessee - M/s. Vijayawada Sri Lakshmi Narasimha

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