Merchant Association Vs ITO (ITAT Pune)
The Income Tax Appellate Tribunal (ITAT), Pune Bench (SMC), decided an appeal filed by The Merchant Association against the order of the Addl./JCIT(A), Faridabad passed under Section 250 of the Income-tax Act for Assessment Year 2024-25. The principal issue was whether the assessee’s total income should be taxed at the Maximum Marginal Rate (MMR) or at the normal rates applicable under the Income-tax Act.
The assessee is a society registered under the Societies Registration Act, 1860. It filed its return of income on 12.07.2024 declaring total income of Rs. 5,33,260. The return was processed under Section 143(1) on 28.12.2024, applying the Maximum Marginal Rate and raising a tax demand of Rs. 1,86,290. The assessee thereafter filed a rectification application under Section 154, which was rejected on 27.02.2025.
The assessee challenged the rectification order before the Commissioner (Appeals). The Commissioner (Appeals) considered the grounds of appeal and statement of facts but confirmed the application of the Maximum Marginal Rate and dismissed the appeal. Aggrieved by that order, the assessee preferred the present appeal before the Tribunal.
Before the Tribunal, the assessee submitted that the Commissioner (Appeals) had erred in confirming the Assessing Officer’s action. According to the assessee, Section 167B was wrongly applied despite the assessee being a society registered under the Societies Registration Act, 1860. The assessee relied on the return of income filed in ITR-5, its registration certificate under Section 3 of the Societies Registration Act, 1860, and several judicial decisions. The Departmental Representative supported the order of the Commissioner (Appeals).
