POOJA AMIT FAMILY TRUST,NAGPUR vs. ACIT CIRCLE-1, NAGPUR
Facts
The Assessee, a Private Limited Discretionary Trust, appealed against the levy of surcharge at 37% by the Assessing Officer, which was confirmed by the Ld. Commissioner. The appeal pertains to the Assessment Year 2023-24, challenging the method of surcharge computation for such trusts.
Held
Following a Special Bench ITAT ruling, the Tribunal held that for Private Discretionary Trusts taxable at the maximum marginal rate, surcharge must be computed as per the slab rates in the Finance Act, not at a flat 37%. Consequently, the 37% surcharge was deleted, and the AO was directed to apply surcharge as per Paragraph A, Part 1, First Schedule.
Key Issues
The key issue was the correct method for computing surcharge on income for Private Discretionary Trusts taxable at the maximum marginal rate.
Sections Cited
Section 250, Income Tax Act, 1961, Finance Act, Paragraph A, Part 1, First Schedule
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR “SMC BENCH :: NAGPUR
Before: SHRI NARENDER KUMAR CHOUDHRY
This appeal has been preferred by the Assessee against the order dated 03/09/2024 impugned herein passed by the ADDL/JCIT (Appeals)-2, Gurugram (in short, ‘Ld. Commissioner’) u/sec. 250 of the Income Tax Act, 1961 (in short, ‘Act’) for the A.Y. 2023-24.
2 ITA No.486/NAG/2024 (Pooja Amit Family Trust) 2. Admittedly, the Assessee is a Private Limited Discretionary Trust, however, the Assessing Officer (AO) levied surcharge @ 37% and therefore in view of the judgment passed by the Special Bench of ITAT, Mumbai in the case of Araadhya Jain Trust v. ITO [2025] 173 taxmann.com 343 (Mumbai - Trib.) (SB), wherein it has been held that “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”, the surcharge as confirmed by the Ld. Commissioner vide impugned order, is unsustainable. Thus, the surcharge is deleted and the Ld. AO is directed to levy the surcharge as applicable under the Paragraph A, Part 1, First Schedule.
In the result, Assessee’s appeal is allowed.
Order pronounced in the open court on 25.06.2025.
Sd/- (NARENDER KUMAR CHOUDHRY) JUDICIAL MEMBER
vr/-
3 ITA No.486/NAG/2024 (Pooja Amit Family Trust)
Copy to: The Appellant The Respondent The CIT, Concerned, Nagpur The DR Concerned Bench
//True Copy//
By Order
Senior Private Secretary ITAT, Nagpur.