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Facts
The assessee, a private discretionary trust, filed its return for AY 2021-22 showing a total income of ₹3,04,31,120/-. The AO levied surcharge at 37% instead of 25%, which the assessee contended was incorrect as its income fell within the ₹2-5 crore range attracting a 25% surcharge.
Held
The Tribunal held that surcharge is leviable based on the quantum of income falling within a given range, not on the rate of tax applicable. The assessee's income warranted a surcharge of 25%, not 37%.
Key Issues
Whether the surcharge is leviable on the basis of the applicable income range or the maximum marginal rate of tax for a private discretionary trust.
Sections Cited
250, 143(1), 2(29C), 4, 164, 167B, 160
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: SHRI PRADIP KUMAR CHOUBEY & SHRI RAKESH MISHRA
order
: 11-August-2025 ORDER
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Addl/JCIT(A)-1, Lucknow [hereinafter referred to as Ld. ‘Addl/JCIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2021-22 dated 25.07.2024, which has been passed against the intimation order u/s 143(1) of the Act, dated 13.10.2022. i) CIT v. Shri Krishna Bhandar Trust 201 ITR 989 (Calcutta High Court) [1993] ii) Nizam's Family Trust 108 ITR 555 (Supreme Court) iii) LR Patel Family Trust v. ITO 262 ITR 520 (Bombay High Court) iv) CIT V S.A.E. Head Office Trust 271 ITR 159 (Delhi High Court) v) DIT V. Shardaben Maftalal Trust 247 ITR 1 (Bombay High Court) 4. The Ld. Addl/JCIT(A) examined the matter. It was argued before the Ld. Addl/JCIT(A) that the surcharge should be levied on the basis of the income and written submissions were filed relying upon the following decisions: i) The Hon'ble Supreme Court in Commissioner of Wealth Tax vs. Trustees of H. E. H. Nizam's Family (Remainder Wealth) Trust (1977) (108 ITR 555)