The Bar Association City Civil Court Hyderabad Vs ITO (ITAT Hyderabad)
The assessee society appealed against the CIT(A)’s order dated 12.02.2026 arising from an assessment made under Sections 147, 144 and 144B of the Income-tax Act. The Assessing Officer initiated reassessment proceedings after noticing substantial financial transactions and non-filing of the return of income. As the assessee did not file its return despite notices under Sections 148 and 142(1), the AO completed the assessment on the basis of available records and determined the income at Rs.33,09,635, taxing it at the Maximum Marginal Rate (MMR) of 30%.
Before the Tribunal, the assessee contended that it was a society registered under the Societies Registration Act, 1860 and, therefore, although treated as an Association of Persons (AOP), it could not be subjected to tax at the Maximum Marginal Rate under Section 167B. The assessee also claimed credit of TDS amounting to Rs.1,00,547.
The Tribunal observed that the AO had computed tax at the Maximum Marginal Rate by treating the assessee as an AOP with indeterminate or unknown shares but had overlooked that the assessee was registered under the Societies Registration Act, 1860. During the hearing, the assessee produced its Registration Certificate dated 04.03.1972, evidencing registration with the Registrar of Societies, Hyderabad. The Tribunal held that, under Section 167B, the Maximum Marginal Rate was not applicable to such a registered society. It set aside the CIT(A)’s order and directed the AO to determine the tax liability at the rates applicable to an individual in accordance with law.
