POOJA AMIT FAMILY TRUST,NAGPUR vs. ACIT CIRCLE-1, NAGPUR

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ITA 486/NAG/2024Status: DisposedITAT Nagpur25 June 2025AY 2023-243 pages
AI SummaryN/A

What did the Tribunal hold?

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.

What were the 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.

What were the issues?

The key issue was the correct method for computing surcharge on income for Private Discretionary Trusts taxable at the maximum marginal rate.

Which sections of the Income-tax Act were involved?

Section 250

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BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER

ITA No.486/NAG/2024 (Assessment Year: 2023-24)

Pooja Amit Family Trust, G 10, Air Developers Dixit Nagar, Nari Road, Nagpur. | Vs. | ACIT, Circle-1, Nagpur. PAN: AACTP 1112 G (Appellant) | (Respondent)

Present for:

Assessee by : Shri K.P. Dewani, Ld. Advocate

Revenue by : Shri Surjit Kumar Saha, Ld. Sr.D.R.

Date of Hearing : 25.06.2025 Date of Pronouncement : 25.06.2025

O R D E R

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.

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 [\[2025\]](javascript:void(0);) [173 taxmann.com 343 \(Mumbai -](javascript:void(0);) 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.

3.

In the result, Assessee's appeal is allowed.

Order pronounced in the open court on 25.06.2025.

Sd/- (NARENDER KUMAR CHOUDHRY) JUDICIAL MEMBER

Copy to: The Appellant

The Respondent

The CIT, Concerned, Nagpur The DR Concerned Bench

//True Copy//

By Order

Senior Private Secretary ITAT, Nagpur.

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