CHOKSI SUBHDRABEN CHHOTALAL,SURAT vs. WARD 2(2)(1), SURAT

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA Nos.576 & 585/SRT/2026 (Assessment Years: 2009-10 & 2017-18) Choksi Subhdraben Chhotalal, ITO, Ward- 2(2)(1), 7, Amit Bunglow, 6 Floor, Vishwakarma Society, Aayakar Bhawan, Vs. Near Vishwakarma Temple, Near Majura Gate, Majura Gate, Opp. New Civil Hospital, Surat Surat PAN: AAAAC1467C (Appellant) : (Respondent) Assessee by : Shri Umesh Dalal, CA Respondent by : Shri Ashish Kumar, Sr. DR Date of Hearing : 16.06.2026 Date of Pronouncement : 30.07.2026 O R D E R PER : SUCHITRA KAMBLE, J M: These appeals filed by the assessee are against the orders passed by the Learned Commissioner of Income Tax (Appeals), ADDL/JCIT(A) [in short “CIT(A)”], Faridabad dated 24.12.2025 & 02.04.2026 for the Assessment Years (in short “AY”) 2009-10 & 2017-18 respectively.

ITA Nos.576 & 585/SRT/2026 Choksi Subhdraben Chhotalal 2. On the facts and circumstances of the case, the learned Commissioner of Income tax (Appeals) has erred in not considering the provisions of section 164. 3. On the facts and circumstances of the case, the learned Commissioner of Income tax (Appeals) has erred in not considering the Appellate order in its own case for AY 18-19, wherein the same has been decided in favor of the Appellant. 4. The appellant reserves right to add, alter, vary any or all grounds of appeal.” 3. The assessee is AOP regularly assessed to tax. The assessee filed return of income declaring income at Rs.9,24,968/-. The intimation was passed u/s 143(1) of the Income Tax Act, 1961 (in short “the Act”) on the same income. However, tax was levied at maximum marginal rate instead of normal rates applicable to individual. The assessee is AOP which was created on the basis of will. Late Subhadraben died few years back and return is filed as executor u/s 168 of the Act. As per section 168 of the Act, if there is one executor, it will be treated as individual, and if there are more than two executors, it will be treated as AOP. The assessee executed a will and there were more than two executors. As per the direction of the will, a private trust was created. As per the normal provision, the trust/AOP is assessed at maximum marginal rate. The assessee had filed copy of trust deed created by virtue of will of deceased and that was the only trust created by virtue of will. The AOP is chargeable at normal tax rate as per the proviso in of Section 164(1) of the Act. The Assessing Officer (in short “the AO”) treated the same as discretionary trust and charged the income at maximum marginal rate. This being a specific trust, the income thereon is liable to tax when it exceeds the maximum amount not chargeable to tax. However, the jurisdictional AO passed order u/s 154 of the Act rejecting our application. The assessee submitted copy of will in vernacular language as well as its English version before JAO but the Ld. AO has not considered the same and simply rejected the application. The assessee had also filed appellate order in its own case for A.Y. 2018-19 which was allowed by the Appellate authority but was disregarded by the JAO.

ITA Nos.576 & 585/SRT/2026 Choksi Subhdraben Chhotalal 5. The Ld. Authorised Representative (in short “Ld. AR”) for the assessee submitted that the assessee falls under Proviso (ii) to Section 164(1) of the Act. The relevant provisions are reproduced hereunder: “164. (1) Subject to the provisions of sub-sections (2) and (3), where] any income in respect of which the persons mentioned in clauses (iii) and (iv) of sub-section (1) of section 160 are liable as representative assessees or any part thereof is not specifically receivable on behalf or for the benefit of any one person or where the individual shares of the persons on whose behalf or for whose benefit such income or such part thereof is receivable are indeterminate or unknown (such income, such part of the income and such persons being hereafter in this section referred to as "relevant income", "part of relevant income" and "beneficiaries", respectively), [tax shall be charged on the relevant income or part of relevant income at the maximum marginal rate:] Provided that in a case where- (i) none of the beneficiaries has any other income chargeable under this Act exceeding the maximum amount not chargeable to tax in the case of association of persons or is a beneficiary under any other trust; or (ii) the relevant income or part of relevant income is receivable under a trust declared by any person by will and such trust is the only trust so declared by him or tax shall be charged on the relevant income or part of relevant income as if it were the total income of an association of persons. Thus, the appellant falls under exception and MMR is not applicable.”

5.1 The Ld. AR relied upon the order of the CIT(A) as well as following decisions and circular: 1. ITO V. Rajnikant Gulabdas Sheth Family Trust ITAT (Ahm- Trib) dated 02.01.1987. 2. Nathiben Kalidas Patel Family Trust V. ITO dated 25.04.2025 3. Circular no. 577 dated 04.09.1990 6. The Ld. Departmental Representative (in short “Ld. DR”) submitted that the AO was right while passing 154 order rejecting the assessee’s plea as there is no mistake apparent from the record as the assessee is a legal and AOP with undetermined shares, therefore section 167B of the Act overrides the assessee’s claim u/s 164 of the Act. The Ld. DR relied upon the assessment order and the order of the Ld. CIT(A).

ITA Nos.576 & 585/SRT/2026 Choksi Subhdraben Chhotalal 7. We have heard both the parties and perused all the relevant materials available on record. There is a delay of 42 days in filing the present appeal for which the assessee has filed an affidavit explaining the reason for delay. The delay appears to be genuine and hence the delay is condoned.

Order pronounced in the open court on 30.07.2026

Sd/- Sd/- (B.M. BIYANI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat; Dated: 30.07.2026 * Kishore, Sr. P.S. Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned

ITA Nos.576 & 585/SRT/2026 Choksi Subhdraben Chhotalal 4. DR, ITAT, Surat 5. Guard File By order,

Assistant Registrar/Sr.PS/PS ITAT, Surat Bench