No Evidence to Prove Status as Private Beneficiary Trust: ITAT Rejects claim to Tax in Individual Manner [Read Order]

The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) has held that the claim of the assessee to be taxed individually is not sustainable when no evidence to prove their status as a private beneficiary trust.

The assessee challenged the order dated 01-08-2021 passed u/s. 250 of the Income-tax Act, 1961 Commissioner of Income-tax, Appeals CIT(A), National Faceless Appeal Centre (NFAC). 

The assessee, Ramgopal Thirani, a Trust, filed its return of income declaring income at Rs.1,57,340/-. The Centralized Processing Center (CPC) assesses the income at Rs.1,57,340/-, but charges tax thereon by treating the assessee as a charitable trust. 

The claim of the assessee that it was a Private Beneficiary Trust and was required to file its return of income on ITR-5, but inadvertently it filed ITR-7, which was meant for charitable trust claiming exemption(s).

It was contended by the assessee that it tried to file a revised return, but failed to do it and the rectification application filed thereafter could not bring any relief claimed. The assessee contended that they were a Private Beneficiary Trust with the determinate percentage of share and are liable to be taxed in the manner of an individual. Further stated that since the income of the assessee trust was less than the prescribed limit of income, not chargeable to tax as in the case of an individual no tax was payable. 

The Tribunal bench comprising Shri Rajpal Yadav, Vice President and Shri Manish Borad, Accountant Member observed that the assessee failed to file any evidence to establish that it was a private beneficiary trust with a determinate percentage of share.

Remanding the matter, the Tribunal restored the issues raised in the appeal to the CIT(A) for fresh adjudication with a liberty to the assessee to file the necessary evidence(s) to prove that it was a private beneficiary trust with the determinate income percentage of share. The appeal of the assessee was allowed for statistical purposes.

Shri Anindya Kumar appeared for the Respondent while none appeared for the appellant.

To Read the full text of the Order CLICK HERE

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