M/S. KOTHARI DESCENDENTS PRIVATE TRUST ,MUMBAI V. INCOME TAX OFFICER WARD 19(2)2, MUMBAI

ITA 3894/MUM/2024

AI Insights

The case involved M/s Kothari Descendents Private Trust appealing against the order of the Additional/Joint Commissioner of Income-tax (Appeals) - 1, Vadodara, which confirmed the Assessing Officer's (AO) action of computing a surcharge at 37% on dividend income, instead of the 15% as per the Finance Act. The trust, having filed its return declaring dividend income, faced an initial surcharge computation error by the CPC. Upon appeal and subsequent rectification request under Section 154 of the Income-tax Act, the CPC corrected the surcharge rate to 15%. The tribunal found that the rectification addressed all the grievances of the trust, leading to the dismissal of the appeal as infructuous.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 653204 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2023-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: DHARAN GANDHI
• Keywords: Rectification of order; Charitable institution; Maximum Marginal Rate
• Section: 154; 234B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI ANIKESH BANERJEE (JUDICIAL MEMBER) ITA No. 3894/MUM/2024 Assessment Year: 2023-24 M/s Kothari Descendents Private Trust Plot No. 30, Jivandeep Apartment, Station Road, Ambernath(E), Thane- 421501 Vs. ACIT, Central Circle-2, Thane Ashar IT Park,6th Floor, Wagale Industrial Estate, Thane- 400604 PAN NO. ABLFS5744F Appellant Respondent Assessee by : Mr. Dharan Gandhi Revenue by : Mr. Hemanshu Joshi, CIT-DR Date of Hearing : 17/06/2025 Date of pronouncement : 19/06/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 14.06.2024 passed by the Ld. Additional/ Joint Commissioner of Income-tax (Appeals) – 1, Vododara [in short „the Ld. CIT(A)‟] for assessment year 2023-24, raising following grounds: “1. The learned Addl/JCIT (A)- Vadodara has erred in confirming the action of AO CPC in computing surcharge @37% instead of 15% on the tax on Dividend Income. M/s. Kothari Descendents Private Trust 2 ITA No. 3894/MUM/2024 2. The learned Addl/JCIT (A) - Vadodara has erred in not applying Paragraph A-Part 1 to the first schedule to the finance act of the relevant year. 3. The learned Addl/JCIT (A) - Vadodara has erred in confirming levy of interest us 234B & 234C as a consequence. 4. The appellant submits that the revised intimation issued by the CPC on June 21, 2024, which calculates the surcharge on dividend income at 15%, should be upheld. 5. The Appellant craves leave to add, to amend, alter/delete and/or modify the above grounds of appeal on or before the final hearing.” 2. The brief facts, as emerging from the record, are that the appellant is a private non-charitable trust. The assessee filed its return of income on 27.07.2023, declaring total income of ₹80,15,749/-, comprising dividend income from Indian companies. The said return was processed by the Centralized Processing Centre (CPC) under Section 143(1) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”), and an intimation was issued on 18.12.2023. In the said intimation, the surcharge was erroneously computed at the rate of 37% instead of 15%, resulting in a consequential tax demand of ₹6,91,490/-. 2.1 Aggrieved by the said intimation, the assessee preferred an appeal before the learned Commissioner of Income Tax (Appeals), but did not succeed. Simultaneously, the assessee also filed an application under Section 154 of the Act before the CPC, seeking rectification of the surcharge computation. The assessee contended that in terms of Part I of the First Schedule to the Finance Act, M/s. Kothari Descendents Private Trust 3 ITA No. 3894/MUM/2024 where the total income consists solely of dividend income, the surcharge is liable to be levied at a rate not exceeding 15%, notwithstanding the applicability of the Maximum Marginal Rate (MMR). 2.2 Upon due consideration of the rectification request, the CPC accepted the claim of the assessee and issued a rectified intimation on 21.06.2024, correctly computing the surcharge at 15% and thereby granting the relief sought. 2.3 During the course of hearing before us, learned counsel for the assessee submitted that the entire grievance forming the subject matter of the present appeal stands redressed in full pursuant to the rectification order passed under Section 154 of the Act, and that no effective issue survives for adjudication. 2.4 In light of the above and since the relief sought by the assessee has already been granted by the CPC in its rectified order, we are of the considered view that the appeal has been rendered infructuous and requires no further adjudication. 5. In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on 19/06/2025. Sd/- Sd/- (ANIKESH BANERJEE) (OM PRAKASH KANT) JUDICIAL MEMBER ACCOUNTANT MEMBER M/s. Kothari Descendents Private Trust 4 ITA No. 3894/MUM/2024 Mumbai; Dated: 19/06/2025 Disha Raut, Stenographer Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai "