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Facts
The assessee, a private trust, had declared income below Rs. 50.00 lakh for the assessment years 2023-24 and 2024-25. The CPC levied a surcharge of 37% on the total income, which the assessee contested.
Held
The Tribunal held that surcharge is leviable only when the total income exceeds Rs. 50.00 lakh. Therefore, the levy of surcharge in this case was incorrect.
Key Issues
Whether surcharge is leviable on income below Rs. 50.00 lakh as per the provisions of the Finance Act.
Sections Cited
250, 111A, 112, 112A, 115BAC
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeals at the instance of assessee pertaining to A.Yrs. 2023-24 and 2024-2025 are directed against the separate orders dated 27.01.2025 and 23.01.2025 passed by Addl./JCIT(A), Faridabad u/s.250 of the Income-tax Act, 1961 (in short ‘the Act’) arising out of the respective assessment orders.
At the outset, Ld. Counsel for the assessee submitted that the common issue raised in both these appeals is that the CPC erred in levying surcharge on the income of the assessee which was below Rs.50.00 lakh for both the impugned years. In support placed reliance on the decision of Hon’ble Special Bench in the case of Araadhaya Jain Trust vs. ITO in order dated 09.04.2025 where it has been held that surcharge is leviable based on the slab rate provided in First schedule under the heading “surcharge on income tax” appearing in Paragraph A, Part 1, applicable to the relevant assessment year. It was therefore contended that surcharge is leviable as per slab rate and the surcharge is leviable only if the income exceeds Rs.50.00 lakh.
On the other hand, ld. Departmental Representative vehemently argued supporting the orders of the lower authorities.
We have considered the rival arguments made by both the sides and perused the record placed before us. We observe that the assessee is a private trust and income of Rs.7,84,000/- and Rs.8,20,920/- declared in the income-tax returns for A.Yrs. 2023-24 and 2024-25 filed on 28.07.2023 and 27.07.2024 respectively. Income of the assessee is chargeable at Maximum Marginal Rate and due taxes have been paid. However, CPC has levied surcharge 37% on the tax payable on the total income. Before us. Ld. Counsel for the assessee has referred to the decision of Special Bench in the case of Araadhaya Jain Trust (supra) where it has been held that surcharge shall be levied based on the slab rates referred in First Schedule, Paragraph A of Part 1. First Schedule to the Finance Act, 2023 which is reproduced below for necessary guidance :
From going through the above schedule, it is manifest that levying of surcharge comes into effect only if the total income exceeds Rs.50.00 lakh, however, in the case of assessee since the income is below Rs.50.00 lakh for both the impugned years, therefore no surcharge is leviable. We therefore hold that assessee has correctly computed the tax liability in the income tax returns filed by it for both the years under appeal before us. Impugned orders for both the years under consideration are set aside and grounds of appeal raised by the assessee for both the years are allowed.
In the result, both the appeals of the assessee are allowed.
Order pronounced on this 13th day of May, 2025.