NK TRUST,MUMBAI vs. WARD 25(3)(1), MUMBAI

Per: Smt. Beena Pillai, J.M.: The present appeal filed by the assessee arises out of order dated 22/01/2025 passed by CIT(A)-1, Jaipur for assessment year 2023-24 on following grounds of appeal :

“ GROUNDS OF APPEAL

NO.

1. On facts and in law, the Learned AddI/JCIT (A)-1, Jaipur had erred in not directing the Learned Assessing Officer to levy surcharge on total liability based on the total normal income of the A.Y. 2023-24 Nk Trust appellant. In appellant's case surcharge should be restricted to 25% instead of 45.33%. GROUNDS OF APPEAL

NO. 2 The Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at, the time of hearing of the appeal, so as to enable the Hon'ble ITAT to decide this appeal according to law.”

2. At the outset, the Ld.AR submitted that, the only issue in the present appeal relates to applicability of maximum marginal rate on the surcharge as against the slab rates. He placed the order passed by Hon’ble Special Bench of Mumbai Tribunal in the case of Araadhya Jain Trust vs. Income Tax Officer along with interveners passed on 09/04/2025 in for assessment year 2023-24 and submitted that, the issue now stand covered. 2.1 On the contrary, the Ld.DR relied on the orders passed by the authorities below.

3. We note that, Hon’ble Special Bench considered the issue by observing as under: “32. However, upon carefully going through these decisions, we are of the considered view that the issue arising in the present case never fell for consideration before the Hon'ble Courts. The issue in dispute in those cases was primarily concerning what should be the maximum marginal rate and its applicability. The issue 'whether the rate of surcharge would also be at the highest rate while computing tax at maximum marginal rate was never the issue before the Hon'ble Courts. Thus, in our view, the view expressed by the co-ordinate benches in decisions referred to in Paragraph 10(supra) lay down the correct proposition of law. Thus, in the ultimate analysis, we hold, in case of Private Discretionary Trusts, whose income is chargeable to tax at maximum marginal rate, surcharge has to be computed on the income tax having reference to the slab rates prescribed in the Finance Act under the heading 'surcharge on income tax' appearing in Paragraph A, Part 1, First Schedule, applicable to the relevant assessment year.