SHAILENDRA GALA NAVNEET TRUST ,MUMBAI vs. DEPUTY DIRETOR OF INCOME TAX WARD 22(2)(1), MUMBAI

PER OM PRAKASH KANT, AM

These two appeals by the assessee are directed against, two separate order, both dated 08.06.2024 passed by the Ld.
Additional/Joint Commissioner of Income-tax (Appeals), Panchkula
(hereinafter shall be referred as “CIT(A)”) for assessment year 2022-
23 and 2023-24. As identical issue-in-dispute is involved in both these appeals, theref by way of this consol
2. The grounds ra year 2022-23 are rep
Ground No.
Intimation u
1. The learne intimation ord
Tax Act, 1961
to the Appel interest.
Ground No.
Rs.90,651/- lakhs
1. The learne on tax is not below the thre
2. The learned tax is applica outlined in the 3. Your Appe levied in the i and hence the Ground No.3
Payable agg
1. The learn
Payable as R computed as demand by R
2. Your Appe
Payable of Rs be deleted.
Shailen
ITA Nos. 43

fore, same were heard together a idated order for the sake of conv aised by the assessee in appeal produced as under:
1: Validity of the adjustments made u/s 143(1) ed CIT(A) erred in not quashing the im der passed under section 143(1) of the 1 as no opportunity of being heard was p llant before levying surcharge and ad
2: Incorrect levy of surcharge amoun despite total income being less t d CIT(A) erred in not appreciating that su applicable as the total income of the App eshold limit of Rs 50 lakhs.
d CIT(A) failed to appreciate that the surc able only if the total income is above 50
e First Schedule to Finance Act, 2021. ellant prays that the surcharge of Rs.9
impugned intimation order is incorrect, ba e same may please be deleted.
3: Mismatch in Tax Payable and Net regating to Rs.17,452/- ned CPC erred in considering the Net
Rs.1,17,700/- even though the Tax Pa
Rs.1,00,248/- thus resulting into inc
Rs.17,452/-.
llant Prays that the mismatch of the net s.17,452/- in the impugned intimation ma ndra Gala Navneet Trust
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355 & 4354/MUM/2024
and disposed off venience.
for assessment e in the mpugned e Income provided dditional nting to than 50
urcharge pellant is charge on lakhs as 90,651/- ad in law
Amount
Amount ayable is crease in t amount ay please

Ground No.4
234B amoun
1. The learne excess intere
Rs.6,552/-. Y levied in the i
2.1 The appellant/
Discretionary Trust e
Trust Act, 1882. Th
Assessment Year 202
of ₹8,16,680/-, con under the head "Inco processed by the Ce
143(1) of the Income
Act") vide intimation returned income, a d surcharge levied at under Section 234B o said intimation ord surcharge levied at assessee. The Ld. C
Aggrieved, the assess reproduced above.
3. The ground No assessee and therefor
Shailen
ITA Nos. 43

4: Incorrect levy of additional inte nting to Rs.6,552/- ed CIT(A) consequently erred in not dele est levied in the intimation order u/s Your Appellant prays that the excess intimation order may please be deleted.
assessee before us is an Irre established under the provision he appellant filed its return of 22–23 on 16.07.2022, declaring nsisting primarily of interest ome from Other Sources." The entral Processing Centre (CPC) e-tax Act, 1961 (hereinafter refe dated 16.03.2023. While the CP emand of ₹1,17,700/- was raise the rate of 37% and conseq of the Act. The assessee filed ap der before the Ld. CIT(A) c the maximum rate on the tax
CIT(A) rejected the contention o see is in appeal before us by way o. 1 of the appeal was not p re, same is dismissed as infruct ndra Gala Navneet Trust
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355 & 4354/MUM/2024
rest u/s eting the 234B of interest evocable Private ns of the Indian income for the g a total income income taxable said return was ) under Section ferred to as "the PC accepted the ed on account of quential interest ppeal against the challenging the x liability of the of the assessee.
y of grounds are pressed by the tuous.

pertains to the grievance reg ghest rate of 37% despite the ₹50,00,000/-. It is the speci arge is not leviable in the pres ed falls below the threshold l
Act, 2021. The Ld. CIT(A that the assessee, being an Irr with indeterminate beneficiaries,
164(1) of the Act, which manda nal Rate (MMR). The CIT(A) furth ust the highest basic rate of tax rge as prescribed in the Fina
7%, and therefore concluded th e assessee was 42.744% for th of Ld. CIT(A) is reproduced as un n its submission has raised the fact that w Rs.50 lacsand that there is no provi o levy surcharge in the case of assess
8,16,680/- in the return of the income. T the applicability of maximum margin he only dispute in this appeal is appl st income slab i.e. 37% to the case of ap surcharge as per the provisions of Financ me does not exceeds Rs 50 lakhs as co assessee, being a private trust where nown, will be governed by section 164 of ndra Gala Navneet Trust
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355 & 4354/MUM/2024
garding levy of assessee’s total ific case of the sent case as the limit prescribed
) rejected this revocable Private
, falls within the ates taxation at her held that the x (30%) but also ance Act of the hat the effective e A.Y. 2022–23. nder:
the income ision under eedeclaring
There is no nal rate to licability of ppellant by ce Act 2021
ontented by e share of f the Income tax Act, 1961. The below:
"Charge of tax whe
164. (1) Subject to th income in respect of of sub-section (1) of or any part thereof benefit of any one p on whose behalf or f receivable are indete income and such pe
"relevant income", respectively), tax sh relevant income at th
6.3. Further, the m
2(29C) as "the rate o any) applicable in re individual, associat individuals as specif
6.4. Further the ap income tax applicab the rate of surcharge rates of surcharge a 2020 as has been th any" have been me rate.
6.5 The submission taxation provided in applicable to the app tax and surcharge.
There is no dispute chapter-II, which de applicable. The sec subject to provision where sub-section 2
first schedule requir part of sub-section 3
"In cases to which section 115JB or se sub-section (1A) of s
167B of the Income-t
Shailen
ITA Nos. 43

relevant portion of the section 164 is ere share of beneficiaries unknown.
he provisions of sub-sections (2) and (3), which the persons mentioned in clauses f section-160 are liable as representative f is not specifically receivable on behalf erson or where the individual shares of t for whose benefit such income or such pa erminate or unknown (such income, such ersons being hereafter in this section ref
"part of relevant income" and "ben hall be charged on the relevant income he maximum marginal rate."
maximum marginal rate is defined und of income-tax (including surcharge on inc elation to the highest slab of income in the ion of persons or, as the case may b fied in the Finance Act of the relevant yea ppellant has contented that although t le to the Appellant is the highest i.e., 30
e applicable to the Appellant will be in lin as prescribed in the First Schedule to F he intent of legislature and that is why th ntioned in the definition of the maximum n of the appellant is not acceptable. Th n the first schedule-part-I of Finance Act pellant only to the extent of rates of high
It is clear the MMR is applicable to the on it. Here it is necessary to refer the F etermines/specifies the rates of income ction 2 starts with non-obstante word of sub-section 2 & 3 for A.Y. 2022-23. 2 & 3 are applicable, the rates specified red to be adopted for MMR purpose. Th
3 of section 2 of Finance Act is as under:
the provisions of Chapter XII or Chapt ction 115JC or Chapter XII-FA or Chapte section 161 or section 164 or section 164A tax Act, 1961 (43 of 1961) (hereinafter ref ndra Gala Navneet Trust
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355 & 4354/MUM/2024
reproduced where any (iii) and (iv) e assessees f or for the the persons art thereof is h part of the ferred to as neficiaries", e or part of der section come-tax, if e case of an be, body of ar"
the rate of %, however nes with the Finance Act, he words "if m marginal he rates of t, 2021 are hest slab of e appellant.
Finance Act, e tax to be ds such as . Therefore, in Part-I of The relevant ter XII-A or er XII-FB or A or section ferred to as the Income-tax Act) provided in that Cha imposed by sub-sec section, as the case
Hence it is clear tha part-I of schedule ar
MMR will be charge of section 2 of Finan as per the provision the IT Act. The Fina highest slab of rate of tax of highest slab the Finance Act MMR the section 2(29C) i income is mentioned for a particular A.Y.
11 & 2011-12 to sla word "if any" is r relevance to levy of s
"if any" is related to in the schedule of Fi in the Finance Act t
MMR will be calcula mentioned in the sc included in the tax not remotely sugges rates of income.
6.6 Thus, the MMR highest slab rate fo surcharge is levied.
highest slab tax rat
Finance Act unless
STCG. The income o income is not exclud
Finance Act. Part app
& no surcharge as permissible. Appella be kept in mind. O applicable will be s integral part of MMR
23. 7. Therefore, the tax maximum marginal section 2(29C) of th
Shailen
ITA Nos. 43

apply, the tax chargeable shall be de apter or that section, and with reference ction (1) or the rates as specified in that may be:" (Emphasis supplied) at, where MMR is applicable the rates s re only relevant to the extent of calculating d in the applicable cases by virtue of su nce Act, 2021. The rate of MMR has to be ns of section 2(29C) of IT Act. r.w.s. 164
ance Act of every year is only relevant to of tax & surcharge. After considering bot b as well as surcharge of highest slab m
R is to be calculated & charged. The word is relevant if the surcharge to the high d in the relevant Finance Act and it will be For Ex. no surcharge was applicable for ab of income of individual and AOP. Th relevant. Here the word surcharge "if surcharge if mentioned in the Finance Ac o the specification/mandate of surcharge inance Act. If surcharge of highest slab is then this surcharge will be included in t ated accordingly. If no surcharge for high chedule of Finance Act then no surcha quantum for calculating the MMR. This st to include surcharge in MMR as per dif will not be applicable in parts like in for basic tax i.e. 30% is levied & in o
This is not correct. The MMR always tes & highest slab surcharge if any pr specifically excluded like income from of dividend shown by the appellant in th ded in the proviso to sub section 3 of s plicability of MMR is not permissible i.e. t per schedules of relevant Finance Act o ant has paid basic income tax at 30% rate
Once the appellant is eligible for MMR urcharge for highest slab only. Surcharg
R and therefore MMR will be 42.74% for x rate charged in the case of the asses rate which also includes surcharge as e Act. Therefore, the CPC order u/s 143
ndra Gala Navneet Trust
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eterminedas to the rates
Chapter or specified in g MMR and ub-section 3
e calculated or 167B of o know the th the rates mentioned in d "if any" in hest slab of e applicable r A.Y. 2010- erefore, the f any" has ct. The word e mentioned s mentioned the tax and hest slab is arge will be word does fferent slab one part of ne part no constitutes rescribed in LTCG and he return of section 2 of the tax 30%
on it is not e requires to R surcharge ge @37% is A.Y. 2022- ssee will be defined in 3(1) levying the surcharge is as appellant is dismis
5. However, before decision of the Speci
(ITAT), Mumbai, in taxmann.com 343 (S of a private discretion rate as per Section 1
must still be comp prescribed in the Fir
Special Bench autho assessee does not ex even in cases to whi undisputed fact that ₹8,16,680/-, which prescribed under t surcharge. Respectfu
Special Bench in Aa surcharge was levia consequently, compu was erroneous and co the appeal of the asse
6. Ground No. 3 r the tax payable and intimation issued un
Shailen
ITA Nos. 43

s per law and is upheld and the app sed.”
e us, the assessee has relied up ial Bench of the Income Tax Ap
Aaradhya Jain Trust v. IT SB)], wherein it was held that a nary trust is taxable at the max
164(1), the surcharge componen puted with reference to the s rst Schedule to the relevant Fi oritatively held that if the tota xceed ₹50,00,000/-, surcharge ich MMR applies.. In the presen t the total income declared by is below the threshold limit o the Finance Act, 2021 for ully, following the ratio laid aradhya Jain Trust (supra), w able on the tax liability of the utation of tax at the effective r ontrary to law. Accordingly, the essee is allowed.
relates to a computational mis d the net amount payable as nder Section 143(1) of the Act. T ndra Gala Navneet Trust
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peal of the pon the binding pellate Tribunal
TO [(2025) 173
although income ximum marginal nt of such MMR slab thresholds inance Act. The al income of the e is not leviable nt case, it is an the assessee is of ₹50,00,000/- applicability of d down by the we hold that no e assessee, and rate of 42.744%
ground No. 2 of smatch between reflected in the The Ld. Counsel for the assessee refe the Act and drew o which reflected the t indicated a net dema difference of ₹17,45
discrepancy was br adjudication thereon the view that the is computation and f appropriately examin
We, therefore, restor for necessary verif accordance with law.
is accordingly allowed
7. The ground No.
be adjudicated and d
8. The grounds for under:
Ground No. 1: Vali u/s 143(1)
1. The learned CIT( order passed under opportunity of being surcharge and addit
Ground No. 2: I
Rs.36,911/- despite
Shailen
ITA Nos. 43

rred to page 8 of the intimatio our attention to Clause 26 of tax liability as ₹1,00,248/-, whe and of ₹1,17,700/-, resulting in 52/-. It was submitted that rought to the notice of the n was made. Upon due consider ssue involves factual verificatio figures in the intimation, w ned only at the level of the As e this issue to the file of the A fication and rectification, if The ground No. 3 of the appeal d for statistical purposes.
4 being consequential same is dismissed as infructuous.
r assessment year 2023-24 are idity of the adjustments made in the I
(A) erred in not quashing the impugned r section 143(1) of the Income Tax Act, 1
heard was provided to the Appellant bef tional interest.
Incorrect levy of surcharge amo e total income being less than 50 lak ndra Gala Navneet Trust
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on u/s 143(1) of the intimation, ereas Clause 27
an unexplained although this Ld. CIT(A), no ration, we are of on pertaining to which can be ssessing Officer.
Assessing Officer warranted, in l of the assessee not required to e reproduced as Intimation d intimation
1961 as no fore levying unting to khs

A) erred in not appreciating that surcharg the total income of the Appellant is 50 lakhs.
A) failed to appreciate that the surcharg he total income is above 50 lakhs as outl nance Act, 2021. rays that the surcharge of Rs.36,911/- le n order is incorrect, bad in law and henc ed.
orrect levy of additional interest u/s to Rs.3,417/-
T(A) consequently erred in not deleting e intimation order u/s 234B and 234C of prays that the excess interest u/s 234
ion order may please be deleted aised in year under consideratio have already adjudicated in th ment year 2022-23 and therefo grounds for assessment yea andis.
he appeal of the assessee in a llowed for statistical purposes
2023-24 is allowed.
ced in the open Court on 24/0
/-
S
AUDHARY)
(OM PRAK
MEMBER
ACCOUNTA ndra Gala Navneet Trust
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355 & 4354/MUM/2024
ge on tax is below the ge on tax is lined in the evied in the ce the same
234B and the excess f Rs.1,512/-
4B & 234C on are identical he appeal of the re following the ar 2023-24 are assessment year whereas appeal
07/2025. KASH KANT)
ANT MEMBER

Dated: 24/07/2025
Rahul Sharma, Sr. P.S.

Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

////

Shailen
ITA Nos. 43

ded to :

BY ORDER

(Assistant Re

ITAT, Mu ndra Gala Navneet Trust
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355 & 4354/MUM/2024
R, gistrar) umbai