SWATI SARAWAGI FAMILY TRUST,KOLKATA V. ACIT, CIRCLE-7(1), , KOLKATA

ITA 2433/KOL/2024

AI Insights

The case involves the Swati Sarawagi Family Trust appealing against the orders of the Addl/JCIT(A)-Prayagraj, which upheld the intimation orders issued by the CPC regarding the surcharge and interest applied on the Trust's income for the assessment years 2022-23 and 2023-24. The primary contention was the incorrect application of the surcharge rate and the subsequent interest charges. The Tribunal found that the surcharge should have been applied at 10% for AY 2022-23 and NIL for AY 2023-24, contrary to the higher rates applied by the lower authorities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298643 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2023-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Capital Gains; Maximum Marginal Rate
• Section: 250; 143(1)

Judgement Text

"आयकर अपीलीय अधिकरण कोलकाता 'ए' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘A’ BENCH, KOLKATA श्री प्रदीप क ुमार चौबे, न्याधयक सदस्य एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. Nos.: 2432 & 2433/KOL/2024 Assessment Years: 2022-23 & 2023-24 Swati Sarawagi Family Trust Vs. ACIT, Circle-7(1), Kolkata (Appellant) (Respondent) PAN: AAXTS0391P Appearances: Assessee represented by : Vinod Kr. Jain, FCA. Department represented by : Gautam Patra, Addl, CIT(DR). Date of concluding the hearing : April 15th, 2025 Date of pronouncing the order : April 25th, 2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: Both these appeals filed by the assessee are against separate orders of the Addl/JCIT(A)-Prayagraj [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2022-23 & AY 2023-24 dated 23.10.2024 & 14.11.2024, which have been passed against the intimation orders u/s 143(1) of the Act, dated 16.03.2023 & 18.12.2023, respectively. Page | 2 I.T.A. Nos.: 2432 & 2433/KOL/2024 Assessment Years: 2022-23 & 2023-24 Swati Sarawagi Family Trust. Page 2 of 5 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: AY 2022-23 “1. The Id. CIT(A), NFAC erred in law and on facts to affirm the order of the Assessing Officer, NFAC. 2. The Ld. CIT(A), NFAC erred in law to affirm the order of the Assessing Officer, NFAC in which surcharge applicable on income was clubbed with highest rate of income tax against the provisions given in chapter ii, 1st Schedule part 1 of Finance Act, 2022. 3. The Ld. CIT(A), NFAC erred in law to invoke the provision section 164 r.w.s 2(29C) of the Act in contrary to the facts of the case. 4. The Ld. CIT(A), NFAC erred in law to affirm order of the Assessing Officer, NFAC on interest u/s.234B and 234C of the Income Tax Act. 5. That the appellate craves leave to add, modify or amend the ground of appeal and to adduce additional evidence in support of ground of appeal at the time of hearing of the case.” AY 2023-24 “1. The Id. CIT(A), NFAC erred in law and on facts to affirm the order of the Assessing Officer, NFAC. 2. The Ld. CIT(A), NFAC erred in law to affirm the order of the Assessing Officer, NFAC in which surcharge applicable on income was clubbed with highest rate of income tax against the provisions given in chapter ii, 1st Schedule part 1 of Finance Act, 2023. 3. The Ld. CIT(A), NFAC erred in law to invoke the provision section 164 r.w.s 2(29C) of the Act in contrary to the facts of the case. 4. The Ld. CIT(A), NFAC erred in law to affirm order of the Assessing Officer, NFAC on interest u/s.234B and 234C of the Income Tax Act. 5. That the appellate craves leave to add, modify or amend the ground of appeal and to adduce additional evidence in support of ground of appeal at the time of hearing of the case.” Page | 3 I.T.A. Nos.: 2432 & 2433/KOL/2024 Assessment Years: 2022-23 & 2023-24 Swati Sarawagi Family Trust. Page 3 of 5 3. Brief facts of the case as culled out from Form No. 35 are that the assessee is a private specific family Trust. Some of the beneficiaries had income exceeding the maximum amount which was not chargeable to tax and the tax rate for the assessee was 30%. The assessee had total income of Rs. 24,78,407/- including dividend income, interest income from the bank and interest income from fixed deposit. The CPC calculated the surcharge at Rs. 2,75,102/- instead of ‘NIL’ in computing the tax liability. The CPC also charged consequential cess in excess by Rs. 11,004/- and interest of Rs. 25,795/-. Aggrieved with the assessment order the assessee filed an appeal before the Ld. CIT(A) who has dismissed the appeal of the assessee by upholding the intimation issued by the CPC. Aggrieved with the order of the Ld. CIT(A) the assessee has filed the appeal before this Tribunal. 4. Rival submissions were heard and the record and the submissions made have been examined. The Ld. AR contended that even though the assessee is a private specific Trust and the maximum marginal rate of tax was applicable, however, the surcharge was to be applied as per the Finance Act and depending upon the quantum of income. Since the assessee’s income did not exceed Rs. 1 Crore, therefore, surcharge @ 10% only should have been applied instead of 37% applied by the Ld. CIT(A). Further, if the assessee has capital gains, therefore, even otherwise the surcharge was to be limited to 15%. Since the beneficiaries are known and the shares are mentioned in the trust deed, therefore, the provisions of section 167B or section 164(1) of the Act are not applicable. The Ld. DR relies upon the order of the Ld. CIT(A). 5. We have considered the submissions made and find that the surcharge @ 10% only should have been applied as the income was Page | 4 I.T.A. Nos.: 2432 & 2433/KOL/2024 Assessment Years: 2022-23 & 2023-24 Swati Sarawagi Family Trust. Page 4 of 5 below Rs. 1 Crore. For A.Y. as the total income was only Rs. 24,78,407, therefore, no surcharge was leviable. Hence, the appeals are allowed for both the assessment years and the Ld. AO is directed to apply the surcharge @10% for A.Y. 2022-23 as the income did not exceed Rs. 1.0 Crore and apply NIL surcharge for A.Y. 2023-24 as the income did not exceed Rs. 50,000/-. Hence Ground Nos. 1, 2 and 3 are allowed. Ground No. 5 is general in nature and does not require any separate adjudication. Ground No. 4 is consequential in nature and the Ld. AO is directed to charge interest as per law on the tax levied. 6. In the result, both the appeals filed by the assessee are allowed. Order pronounced in the open Court on 25th April, 2025. Sd/- Sd/- [Pradip Kumar Choubey] [Rakesh Mishra] Judicial Member Accountant Member Dated: 25.04.2025 Bidhan (P.S.) Page | 5 I.T.A. Nos.: 2432 & 2433/KOL/2024 Assessment Years: 2022-23 & 2023-24 Swati Sarawagi Family Trust. Page 5 of 5 Copy of the order forwarded to: 1. Swati Sarawagi Family Trust, C/o. Jain Vinod K & Associates, 41 A, A.J.C. Bose Road, Suite No. 613, 6th Floor Kolkata, West Bengal, 700017. 2. ACIT, Circle-7(1), Kolkata. 3. Addl/JCIT(A)-Prayagraj. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "