SHRI LAXMINARAYAN ALIAS BALAJI DEVASTHAN,BELGAUM V. ASSISTANT DIRECTOR OF INCOME TAX, CPC, BANGALORE

ITA 134/PAN/2024

AI Insights

The case involves Shri Laxminarayan alias Balaji Devasthan, an Association of Persons (AOP), who appealed against the order of the CIT(A) sustaining a surcharge of 37% on the tax payable for the Assessment Year 2021-22. The assessee had initially computed the surcharge at 15% based on the tax computed at 30% on the total income declared. However, the CPC adjusted the surcharge to 37% under the Maximum Marginal Rate, leading to a higher tax demand. The CIT(A) upheld this adjustment, prompting the assessee to appeal to the Tribunal. The Tribunal, after considering the submissions and evidences, decided to remand the matter back to the Assessing Officer for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705794 (ITAT-PANAJI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2021-2022
• Other Referred Cases: I.T.A no.4272/Mum/2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RIJULA UNIYAL.
• Assessee Lawyers: PRATIBHA
• Keywords: Maximum Marginal Rate

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH PANAJI BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER & SHRI G D PADMAHSHALI ACCOUNTANT MEMBER I T A. Nos.134/PAN/2024 (A.Y. 2021-22 ) Shri.Laxminarayan alias Balaji Devastan, Vithal Deo Galli Shahapur, Belgaum-590003, Karnataka. Vs . ADIT, CPC, Bangalore. . . PAN .No. AABAS4995A (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) Assessee by Smt.Pratibha.AR Revenue by Smt.Rijula Uniyal.Sr.DR सुनवाई कȧ तारȣख/Date of Hearing 26.06.2025 घोषणा कȧ तारȣख/Date of Pronouncement 30.06.2025 ORDER PER PAVAN KUMAR GADALE, JM: The appeal is filed by the assesse against the order of the ADDL/JCIT (A)-4 Kolkata passed u/sec 143(1) and u/sec 250 of the Act. The assesse has raised the grounds of appeal challenging the order of the CIT(A) sustaining the levy of surcharge @37% by the Assessing Officer/CPC. 2. The brief facts of the case are that, the assesse is a AOP. The assesse has filed the return of income for A.Y.2021-12 on 11-03-2022 disclosing a total income of Rs.1,76,72,890/- and computed the tax on total income 2 ITA. No.134/PAN/2024 Shri.Laxminarayan alias Balaji Devasthan. @30% and surcharge computed@15% on tax payable. Subsequently the return of income was processed under section 143(1) of the Act by the CPC accepting the returned income but the Surcharge was computed at Maximum Marginal Rate (MMR)@37% on the total tax payable and determined demand payable of Rs.14,47,420/- vide order dated 2-11-2022. 3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, statement of facts, and submissions but has confirmed the levy of surcharge @37% by the AO/CPC and dismissed the assesse appeal. Aggrieved by the order of the CIT(A), the assesse has filed an appeal before the Hon'ble Tribunal. 4. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the action of the Assessing Officer/CPC on the applicability of surcharge rate overlooking the facts and submissions of the assesse in the proceedings. The Ld.AR mentioned that where the total income is chargeable to tax at Maximum Marginal Rate (MMR), the surcharge has to computed on the income tax in reference to slab rates prescribed in the finance act. The Ld.AR also submitted that the assessee has a good case on merits and shall substantiate with the material evidences and prayed for an opportunity to explain before 3 ITA. No.134/PAN/2024 Shri.Laxminarayan alias Balaji Devasthan. the lower authorities and relied on the judicial decisions and factual paper book. Per Contra, the Ld.DR supported the order of the CIT(A). 5. We heard the rival submissions and perused the material on record. The sole crux of the disputed issue envisaged by the Ld.DR that the CIT(A) has erred in confirming the levy of surcharge @37% by the AO/CPC and sustaining the action of the A.O though the assesse has supported the submissions with the documentary evidences and explanations dealt at para5 of the order.Further the evidences in respect members of A.O.P, were uploaded and none of the members have taxable income in the A.Y.2021- 22. Evidences play a important role in decision making in the adjudicating proceedings which was not considered. The Ld.AR relied on the on the decision of the Honble Tribunal in I.T.A no.4272/Mum/2024 dated 9.04.2025 on similar issue, where the total income is chargeable to tax at Maximum Marginal Rate (MMR), the surcharge has to computed on the income tax in reference to slab rates prescribed in the finance act. The return of income was processed u/sec 143(1) of the Act and details with respect to taxable income of members are not verified. Therefore we considering the facts, circumstances, evidences and to meet the ends of justice, for limited purpose restore the disputed issue to the file of the Assessing Officer to adjudicate afresh on merits and the assessee should be provided adequate opportunity of hearing and shall 4 ITA. No.134/PAN/2024 Shri.Laxminarayan alias Balaji Devasthan. cooperate in submitting the information. And, we allow the grounds of appeal of the assessee for statistical purposes. 6. In the result, the appeal filed by the assesse is allowed for statistical purposes. Order pronounced in the open court on 30.06.2025. Sd/- Sd/- (GD PADMAHSHALI) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Panaji Dated: 30/06/2025 Copy of the Order forwarded to: 1. The Appellant, 2. The Respondent 3. The CIT(A)- 4. CIT 5. DR, ITAT, 6. Guard file. //True Copy// BY ORDER, (Asstt. Registrar)ITAT, Panaji 5 ITA. No.134/PAN/2024 Shri.Laxminarayan alias Balaji Devasthan. Date Initial 1. Draft dictated on PS 2. Draft placed before author PS 3. Draft proposed & placed before the second member PS 4. Draft discussed/approved by Second Member. PS 5. Approved Draft comes to the Sr.PS/PS PS 6. Kept for pronouncement on 7. File sent to the Bench Clerk 8. Date on which file goes to the AR 9. Date on which file goes to the Head Clerk. 10. Date of dispatch of Order. 11. Dictation Pad is enclosed "