MANISHA TRUST ,ICHALKARANJI V. CPC BENGALURU , BENGALURU

ITA 1719/PUN/2024

AI Insights

The case involves two trusts, Manisha Trust and Neelabh Trust, appealing against the surcharge rates applied by the National Faceless Appeal Centre (NFAC), Delhi, for the Assessment Year 2022-23. The trusts contested the imposition of a 37% surcharge on their incomes, arguing that the correct rates were 15% and 25%, as per the applicable income slabs. The Tribunal referenced a decision by the Hon'ble Special Bench in the case of Aaradhya Jain Trust and others vs ITO, which supported the trusts' position. The Tribunal found that the NFAC had erred in law by applying the maximum surcharge rate without proper basis.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396379 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2022-2023
• Other Referred Cases: Aaradhya Jain Trust and others Vs ITO, ITA No. 4272/impugned/2024 and others dated 09.04.2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMNATH P
• Assessee Lawyers: SHEKHAR PATWARDHAN
• Keywords: Set aside; Rectification of order
• Section: 154

Judgement Text

"आयकर अपीलीय अधिकरण \"ए\" न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE Dr. MANISH BORAD, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1719&1751/PUN/2024 धििाारण वर्ा / Assessment Year: 2022-23 Manisha Trust, Vishnu Chambers, Shahu Corner, Ichalkaranji- 416115 Maharashtra PAN-AAATM1994P Vs NFAC, Delhi Appellant Respondent Neelabh Trust, 12, 489 Vishnu Chambers, Shahu Corner, Ichalkaranji- 416115 Maharashtra PAN-AAATN1997K Vs ITO, NFAC, Delhi Appellant Respondent Assessee by : Shri Shekhar Patwardhan Revenue by : Shri Ramnath P Murkunde Date of hearing : 15.05.2025 Date of pronouncement : 27.05.2025 आदेश/ORDER PER DR.MANISH BORAD, ACCOUNTANT MEMBER : These appeals at the instance of assessees pertaining to the A.Y. 2022-23 are directed against the order 2 ITA No.1719&1751/PUN/2024 passed by the National Faceless Appeal Centre (NFAC), Delhi u/s 250 of the Income Tax Act, 1961 dated 21.06.2024 and 28.06.2024 which in turn are arising out of order u/s 154 and 143(1) of the Act dated 14.06.2023 and 15.06.2023. 2. Assessee has raised following grounds of appeal in ITR 1719/PUN/2024:- 1. On the facts and in the circumstances of the case, Deputy Director of Income Tax, CPC Bengaluru is not correct calculating surcharge @37% on income of Rs. 1,09,45,570.00 at the time of passing intimation u/s 143(1) and rectification order u/s 154. 2. On the facts and in the circumstances of the case and in law, Assessing Authority is incorrect in leving 37% surcharge instead of 15% surcharge on Income Tax for income of Rs. 1,09,45,570.00. 3. Appellant may be allowed to Add / Modify the grounds of appeal. Assessee has raised following grounds of appeal in ITR 1751/PUN/2024:- 1) The Learned Commissioner of Income Tax Appeals NFAC hat erred in confirming the order passed U/S 143(1) by the National Faceless Assessment Center CPC Bengaluru wherein the surcharge was wrongly charged at 37% instead of 25% 2) The Learned Commissioner of Income Tax Appeals NFAC has erred in not adjudicating the fact that the adjustment made by the AO National Faceless Assessment Centre was beyond the scope of section 143(1)a as there was no arithmetical error in the return filed. 3) The learned Commissioner of Income Tax NFAC has erred in confirming the order passed u/s 143(1)(a) wherein an adjustment was made without Intimating the Appellant and that makes the order bad in law. 4) The appellant craves leave to add, alter, amend, and modify the aforesaid grounds of appeal at or any time before the hearing as may be advised from time to time. B) RELIEF CLAIMED 1) As the rate of surcharge applicable for the returned income of Rs. 3.12 crore being 25% the surcharge wrongly levied at 37% be restricted to 25% only. 2) The adjustment made was beyond the scope of section 143(1)a the order needs to be quashed. 3) The Order passed u/s 143(1)(a) being bad in law needs to be quashed. 3 ITA No.1719&1751/PUN/2024 4) Any other relief as deemed fit by the Authority Any other relief as deemed fit by the Authority 3. As the issues raised in both these appeals are common, these were heard together and are being disposed off with this consolidated order for sake of convenience and brevity. 4. The common issue raised in both these appeals is regarding the rate of surcharge applicable on both the assessees. 5. At the outset Ld. Counsel for the assessee submitted that the CPC erred in levying surcharge of 37% as against the rate of surcharge applicable at the rate of 15% and 25% on the assessees namely Manisha Trust and Neelabh Trust respectively. He submitted that the issue stands squarely covered in favour of the assesses by the judgement of Hon’ble Special Bench impugned in the case Aaradhya Jain Trust and others Vs ITO, ITA No. 4272/impugned/2024 and others dated 09.04.2025. Source (2025) 39 NYPTTJ 845 (impugned) (SP). 6. On the other hand Ld. DR failed to controvert the contentions made by Ld. Counsel for the assessee by placing any binding proceedings in the favour of revenue on this issue. 7. We have heard rival contentions and perused the record placed before us. The assessee before us namely Manisha Trust and Neelabh Trust declared a total income for A.Y. 2022- 23 at Rs. 1,09,45,574/- and Rs. 3,12,33,510/- respectively and in the return of income, tax has been paid by the assessee after adding surcharge of 15% and 25% respectively for the 4 ITA No.1719&1751/PUN/2024 above referred two Trusts. However the CPC while processing the returns has levied surcharge at the maximum rate of 37% 8. We observe that recently Hon’ble Special Bench in the case of Aradhya Jain Trust and others (Supra) has held that the surcharge on income tax is to be calculated as per the income slab provided in Para A Para 1, first schedule of the Finance Act. The surcharge is leviable if total income exceeds Rs. 50,00,000/- and thereafter for income exceeding Rs. 50 Lakh but upto Rs. 1 crore rate of surcharge is 10%, for the income exceeding Rs. 1 crore but not exceeding Rs. 2 crore, rate of surcharge is 15%, for the income exceeding 2 crore but not exceeding 5 crore, rate of surcharge is 25% and for the income exceeding Rs. 5 crore, rate of surcharge is 37% Hon’ble Special Bench also held that for the income earned by way of dividend including income referred u/s 111A, 112 and 112A of the Act, the rate of surcharge shall not exceed 15% 9. Examining the facts of the instant case in light of the above decisions, we find that both the assesses have no income from dividend and also did not have any income under provisions of section 111A, 112 and 112A of the Act. Further the income of assessee namely Manisha Trust and Neelabh Trust are at Rs. 1,09,45,574/- & Rs. 3,12,33,510/- and therefore as per the income slabs applicable for levying surcharge, the assessee namely Manisha Trust is required to pay 15% surcharge and other assessee namely Neelabh Trust is required to pay surcharge of 25% and we find that both the assessees have correctly calculated their tax liability in the income tax return by applying the correct rate of surcharge as applicable to them. We are therefore of the considered view that Ld. CIT(A) erred in confirming the action of the CPC levying surcharge of 37% which is not in accordance with law. 5 ITA No.1719&1751/PUN/2024 Thus finding of Ld. CIT(A) is set aside and the grounds of appeal raised by the assessee are allowed as per terms indicated herein above. 10. In the result, both the appeals of the assessee i.e. ITA No.1719&1751/PUN/2024 are allowed. Order pronounced on this 27th day of May, 2025. Sd/- Sd/- (ASTHA CHANDRA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/ Pune; दििांक / Dated: 27th May, 2025. Neeta आिेश की प्रधिधलधप अग्रेधर्ि / 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, \"ए\" बेंच, पुणे / DR, ITAT, \"A\" Bench, Pune. 5. गार्ा फाइल / Guard File. आिेशािुसार / BY ORDER, Senior Private Secretary आयकर अपीलीय अधिकरण, पुणे / ITAT, Pune. "