Loading judgment…
Facts
The assessee, an association of persons (AOP), filed its return of income declaring Rs.1,45,720. The CPC processed this under section 143(1) and applied maximum marginal tax (MMR) with a surcharge of 25%. The assessee contended that its income was not exigible to MMR.
Held
The Tribunal held that the provisions of section 167B, read with sections 160 and 164 of the Income Tax Act, were not applicable, and section 115BAC(1A) was relevant. Therefore, MMR was not applicable to the assessee's case.
Key Issues
Whether the Maximum Marginal Rate (MMR) and surcharge are applicable on the income of the assessee (AOP) considering the provisions of section 167B and section 115BAC(1A) of the Income Tax Act.
Sections Cited
143(3), 167B, 160, 164, 115BAC(1A), 143(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH, ‘A’: NEW DELHI
Before: MS. MADHUMITA ROY
Year: 2024-25] M/s Gulmohar Park Journalists’ Income Tax Officer, Colony Welfare Association, C/o- Ward-29(1), CA Vaibhav Goel, 75, Navyug Vs Civic Centre, Market, First Floor, Ghaziabad, New Delhi-110001 Uttar Pradesh-201001 PAN-AAAAG4207C Appellant Respondent Appellant/Assessee by Shri Atishaya & Shri Vaibhav, CA Respondent/Revenue by Shri Ravi Kant Chaudhary, Sr. DR Date of Hearing 10.03.2026 Date of Pronouncement 20.03.2026 ORDER PER AMITABH SHUKLA, AM,
This appeal by the assessee is directed against the order of the Addl/JCIT (Appeals)-4, Hyderabad, [hereinafter referred to as ‘ld. CIT(A)] dated 31.10.2025 arising out of assessment order dated 28.12.2024 passed under section 143(3) of the Income Tax Act, 1961, for the Assessment Year 2024-25. The word ‘Act’ herein this order would mean Income Tax Act, 1961.
The assessee has raised following grounds of appeal:-
1. That on the facts and in the circumstances of the case and in law, the order passed by Id Addl/JCIT(A)-4 Hyderabad dated 30.10.2025 upholding the intimation dated 28.12.2024 is bad in law and deserves to be annulled.
2. That on the facts and in the circumstances of the case and in law, the Ld Addl/JCIT(A) -4 Hyderabad erred in upholding the intimation made by Ld DDIT, CPC, Bengaluru determining tax of Rs 62729/- (including interest) at maximum marginal rate without appreciating that the provisions of section 167B of the Income Tax Act 1961 are not applicable. 2.1. That on the facts and in the circumstances of the case and in law, the Ld Addl/JCIT(A) -4 Hyderabad failed to consider the effect of CBDT Circular: No. 320[F. No. 131(31)/81-TP(PL)], dated 11-01-1982.
3. That on the facts and in the circumstances of the case and in law, the Ld Addl/JCIT(A) -4 Hyderabad erred in applying provisions of section 167B read along with section 160 & 164 of the Income Tax Act 1961 and denying the benefit of maximum amount not chargeable to tax ignoring the overriding provisions of section 115BAC(1A) of the Income Tax Act 1961. 3.1 That Ld Addl/JCIT(A) -4 Hyderabad failed to notice that the appellant had not opted out of new regime and this fact has been duly accepted in the intimation dated 28.12.2024.
4. That on the facts and in the circumstances of the case and in law, the Ld Addl/JCIT(A) -4 Hyderabad erred in levying surcharge of 25% which was not applicable on the facts of the case.”
We have heard rival submissions in the light of material available on records. In short brief factual matrix of the case is that the assessee society had filed its Return of Income in the capacity of AOP, declaring income of Rs.1,45,720/- on 25.07.2024 which was processed under section 143(1) of the Page 2 of 4 Act by CPC vide order dated 28.12.2024. Through the impugned order, the CPC exposed assessee’s income to maximum marginal tax (MMR) i.e. tax @30% and surcharge @25%. The assessee contested that as its total income is Rs.1,45,720/-, it is not exigible to MMR. The ld. First Appellate Authority did not concur with the arguments raised by the assessee and confirmed the order of the CPC. The ld. DR relied upon the orders of the lower authorities.
4. It is the case of the ld. Counsel for the assessee that provisions of section 167B(1) do not apply to its case and therefore the levy of MMR is incorrect. In support of its contentions, the appellant assessee has invited our attention to provision of section 115BAC of the Act, which provides that the ‘option of the assessee’ exercised by the assessee is material for determination of tax rates. It was argued that in its case its income was merely Rs.1,45,720/- and hence MMR would not attract. Upon consideration of the facts of the case in the light of arguments, we are of the considered view that the MMR is not applicable in the case of the assessee. We therefore set-aside the order of the lower authorities and direct to ld. AO to recalculate the taxes if any without MMR in assessee’s case.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 20th March, 2026.