The Pune ITAT, in a recent ruling, held that the tax rates applicable to individuals are also applicable to deities under the income tax law.
The assessee is a Trust formed in 1968 and the object of the Trust inter-alia was the maintenance and upkeep of Shri Vijay Durga Devi Devasthan, Keri, Goa. Before the Tribunal, the assessee claimed that the sole beneficiary as per the Trust Deed is the Deity and that the Deity being a juristic person, it can hold property and be in receipt of income and for this proposition he relied on the decision of Hon’ble Apex Court in the case of Official Trustee of West Bengal Vs. CIT. it was also claimed that since the sole beneficiary is the Deity having the status of an “individual”, the tax rates applicable to individual would apply to it. In support of their contentions, they relied on the decision in ITO Vs. Shri Hanuman Mandir Trust. It was also submitted that in the present case since the entire income belonged to only since person, i.e. the Deity, provisions of Sec.167B of the Act are not applicable and therefore, the assessee be allowed the basic exemption limit as applicable to an individual.
After hearing the rival contentions, the Tribunal observed that the trust has been created in the year 1968 and as per the trust deed, the entire income is to be used for the upkeep of Deity. It is also an undisputed fact that the Deity is the sole beneficiary of the Trust.
“It is also a fact that there is no dispute with respect to the status of the assessee and the income returned by the assessee. The only dispute is whether the tax has to be computed on the basis of tax rates applicable to an individual or the provisions of Sec.167B would apply. The perusal of Sec.167B of the Act reveals that the provision applies to an association or persons or body of individuals where its income is indeterminate or unknown then the tax shall be charged at the maximum marginal rate. In the present case, it is a fact that the Deity is the sole beneficiary and it is not a case where the share of its income is unknown or indeterminate. In such a situation I am of the view that provisions of Sec.167B would not be applicable and since the Deity is a juristic person and having the status of an individual, as held by Hon’ble Apex Court in the case of Official Trustee of West Bengal (supra) the tax rates and the slabs as applicable to an individual would apply. I therefore hold so. I therefore direct that the tax slab as applicable to individual be applied to the assessee,” the Tribunal said.
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