ANMOL TRUST,PUNE V. INCOME-TAX OFFICER 1(1), PUNE, PUNE

ITA 656/PUN/2025

AI Insights

The case involves Anmol Trust appealing against the order of the Additional Joint Commissioner of Income-Tax (Appeals), Udaipur, which upheld the intimation order under section 143(1) of the Income-tax Act, 1961. The intimation order was challenged for incorrectly applying a surcharge of 37% on the trust's income, which was below the threshold for such a surcharge. The Tribunal examined the applicability of the surcharge based on the income tax slab rates prescribed in the Finance Act and referenced the decision in Araadhya Jain Trust case, which clarified the correct application of surcharge on trust incomes.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312468 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2023-2024
• Other Referred Cases: Araadhya Jain Trust Vs. ITA/173/2025 taxmann.com 343 (Mumbai ITAT SB)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILESH SRIVASTAVA
• Assessee Lawyers: RAJAT SONI
• Keywords: Opportunity of being heard; Maximum Marginal Rate
• Section: 234B

Judgement Text

"आयकर अपीलीय अधिकरण \"एस एम सी\" न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL \"SMC\" BENCH, PUNE BEFORE Dr. MANISH BORAD, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No. 656/PUN/2025 धििाारण वषा / Assessment Year: 2023-2024 Anmol Trust, 203, Turning Point, Viman Nagar, Pune- 411014 Maharashtra PAN-AAFTA8612B Vs ITO 1(1), Pune Appellant Respondent Assessee by : Shri Rajat Soni Revenue by : Shri Akhilesh Srivastava, Additional CIT Date of hearing : 24.04.2025 Date of pronouncement : 30.04.2025 आदेश/ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : This appeal at the instance of assessee pertaining to Assessment Year 2023-24 is directed against the order passed by Additional/JCIT(A), Udaipur u/s 250 dated 16.01.2025 of the Income-tax Act, 1961 which in turn is arising out of order u/s 143(1) dated 18.12.2023. 2. Assessee has raised following grounds of appeal:- On the facts and circumstances of the case, the Appellant craves leave to prefer an appeal against the order under section 250 of the Act dated 15 January 2025, Issued by the Additional Joint Commissioner of Income-Tax (Appeals), Udaipur [the learned CIT(A)] pursuant to the appeal against Intimation order under section 143(1) of the Act dated 18 December 2023 on the following grounds, each of which is without prejudice to and independent of the others: 2 ITA No. 656/PUN/2025 On the facts and in the circumstances of the case and in law, the learned CIT(A): General 1. erred in upholding the impugned intimation order under section 143(1) of the Act dated 18 December 2023, Invalidity of the intimation order under section 143(1) of the Act: 2. falled to appreciate that it is judicially settled that no adjustments under section 143(1) of the Act can be made on debatable issues and therefore, the impugned intimation order under section 143(1) of the Act computing the Maximum Marginal Rate of Tax @42.74% [tax @30% (+) surcharge 37% (+) cess 24%] as against 31.20% [tax 30% (+) cess @4%) is bad-n-law and liable to be quashed; 3. failed to appreciate that adjustments made under section 143(1) of the Act without providing the Appellant with an opportunity of being heard goes to the root of the matter making the intimation order under section 143(1) bad-in-law and liable to be quashed, Arguments on merits: 4. erred in upholding the action of the CPC in considering the Appellant's status as 'Association of Person' as against \"Individual\"; 5. failed to appreciate that during the year under consideration, the Appellant's income being only Rs. 3,48,040/- was below the threshold for application of surcharge; 6. without prejudice to the above, ought to have restricted the Maximum Marginal Rate of Tax to 35.88% [tax @30% (+) surcharge @15% (+) cess @4%] since the Appellant's income consisted solely of dividend Income on which surcharge is capped @15% in terms of Paragraph A, Part I of the First Schedule to the Finance Act, 2022; Levy of interest under section 234B of the Act 7. erred in upholding the levy of interest under section 234B of the Act amounting to Rs. 3,552/- as against Rs. 1,068/- computed by the Appellant in its return of income: Levy of interest under section 234C of the Act: 8. erred in upholding the levy of interest under section 234C of the Act amounting to Rs. 4,983/- as against Rs. 2,949/- without appreciating that the interest under section 234C of the Act has to be computed on the returned income; The Appellant craves leave to add, alter, vary, omit, substitute or amend any or all of the above grounds of appeal, at any time before or at the time of the appeal, so as to enable the Hon'ble Income-tax Appellate Tribunal to decide this appeal according to law. 3. The only grievance of the assessee is that Ld. CIT(A) erred in affirming the action of the CPC levying surcharge of 37% on the tax calculated on the income of appellant trust at maximum marginal rate. Reliance placed on the decision of Hon'ble Mumbai ITAT special bench in the case of Araadhya Jain Trust Vs. ITA/173/2025 taxmann.com 343 (Mumbai ITAT SB) in which 3 ITA No. 656/PUN/2025 it has been held that in case of profit, Trust whose income is charged at maximum chargeable rate, surcharge is to be paid on income tax i.e. with to reference to slab rates prescribed in finance Act under heading (Surcharge on Income Tax) appearing in Para A, Part 1, first schedule. 4. On the other hand Ld. DR supported the order of the lower authorities. 5. We have heard rival contentions and perused the record placed before us. We observe that the assessee is a private and discretionary trust and income for the year is Rs. 3,48,040/- for A.Y. 2023-24. Assessee has paid the tax at the Maximum Marginal Rate of 30% and further adding Education Cess paid total tax liability of Rs. 1,08,588/- However the return of income which was filed on 19.07.2023 was processed by CPC calculating the tax liability adding surcharge @ 37% at Rs. 38,632/- on the tax liability of Rs. 1,04,412/- and then adding education cess and higher education cess. 6. As per the income tax rates slab 37% of surcharge is leviable in case income of the assessee exceeds Rs. 5,00,00,000/- Special bench in case of Araadhya Jain Trust (Supra) has held that where the income of private district trust is chargeable to tax at maximum marginal rate, surcharge has to be computed on the income having reference to the slab rates prescribed in the Finance Act under the heading Surcharge on Income Tax appearing in Para A, Para 1 first schedule applicable to the relevant assessment year. Respectfully following the ratio laid down by Hon'ble special bench (supra) we are inclined to hold that since the surcharge is leviable when the income of an assessee exceeds Rs. 50,00,000/- and the maximum rate of surcharge of 37% is leviable if income exceeds Rs. 5 crore and 4 ITA No. 656/PUN/2025 therefore as the income of the assessee is only Rs. 3,48,040/- CPC grossly erred in leving surcharge of 37% on the assessee. Therefore considering the income of the assessee no surcharge was leviable for the year under consideration on tax payable by the assessee. Effective grounds of appeal No. 2 & 3 raised by the assessee are allowed. Remaining grounds are either general or consequential in nature and needs no adjudication. 7. In the result, appeal of the assessee is allowed. Order pronounced on this 30th day of April, 2025. Sd/- Sd/- (ASTHA CHANDRA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/ Pune; दििांक / Dated: 30th April, 2025. Neeta आिेश की प्रधिधलधप अग्रेधषि / Copy of the Order forwarded to: 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. धवभागीय प्रधिधिधि, आयकर अपीलीय अधिकरण, \"SMC\" बेंच, पुणे / DR, ITAT, \"SMC\" Bench, Pune. 5. गार्ा फाइल / Guard File. आिेशािुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण, पुणे / ITAT, Pune. 5 ITA No. 656/PUN/2025 S.No. Details Date Remarks 1. Draft dictated on .04.2024 P.S. 2. Draft placed before author .04.2024 P.S. 3. Draft proposed & placed before the Second Member .04.2024 A.M./J.M. 4. Draft discussed/approved by Second Member .04.2024 A.M./J.M. 5. Approved Draft comes to the Sr. PS/PS .04.2024 P.S. 6. Kept for pronouncement on .04.2024 P.S. 7. Date of uploading of Order .04.2024 P.S. 8. File sent to Bench Clerk .04.2024 P.S. 9. Date on which the file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of Dispatch of order "