THE JAYASWAL BASANT LALL SHAW FAMILY TRUST,NAGPUR, MAHARASHTRA vs. ITO WARD - 1, EXEMP, NAGPUR

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ITA 502/NAG/2024Status: DisposedITAT Nagpur23 June 2025AY 2023-24Bench: SHRI NARENDER KUMAR CHOUDHRY (Judicial Member), SHRI K.M. ROY (Accountant Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal referred to a special bench ruling that for private discretionary trusts taxed at MMR, the surcharge should be computed based on the slab rates prescribed in the Finance Act under 'surcharge on income tax'. The Assessing Officer was directed to verify the facts and apply the correct slab.

What were the facts?

The assessee, a private discretionary trust, challenged an order regarding the levy of surcharge at the highest slab of 37% on its income taxed at Maximum Marginal Rate (MMR). The appeal was filed with a delay of 13 days, which was condoned.

What were the issues?

Correct calculation of surcharge on income taxed at Maximum Marginal Rate (MMR) for a private discretionary trust.

Which sections of the Income-tax Act were involved?

Section 250

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, NAGPUR BENCH : NAGPUR

Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI K.M. ROY

Hearing: 23.06.2025Pronounced: 23.06.2025

This appeal has been preferred by the assessee against the order dated 03/07/2024 impugned herein passed by the ADDL/ JCIT(A)–4, Bengaluru [in short, “Ld.Commissioner”] u/sec. 250 of the Income Tax Act, 1961 (for short, “the Act”) for the Assessment Year (for short, “AY”) 2023-24.

2 ITA.No. 502/NAG/2024 2. Considering the reasons stated by the assessee qua condonation of delay of 13 days in filing the instant appeal, the same is condoned.

3.

In the instant case, the assessee is a private discretionary trust and has shown its income at Maximum Marginal Rate (MMR) which resulted into levy of surcharge @ 37% being highest slab. Considering the applicability of MMR, recently the special Bench of the Tribnal at Mumbai in the case of Araadhya Jain Trust vs. ITO [2025] 212 ITD 01 /173 taxmann.com 343 (Mumbai–Trib.)(SB) dated 09/04/2025 has determined that in case of Private Discretionary Trusts whose income is chargeable to tax at MMR, surcharge has to be computed on the income tax having referred to the slab rates prescribed in the Finance Act under the heading „surcharge on income tax‟ appearing in Paragraph A, Part 1, First Schedule, applicable to the relevant assessment year.

4.

Thus, considering the peculiar facts and circumstances in totality, we direct the Assessing Officer to verify the fact and apply the relevant slab, as would be applicable, as per first schedule concerning to the assessment year under consideration. Thus, the appeal of the assessee is allowed to the extent indicated above.

5.

In the result, appeal of the Assessee is allowed. Order pronounced in the open Court on 23.06.2025.

Sd/- Sd/- (K.M. ROY) (NARENDER KUMAR CHOUDHRY) Accountant Member Judicial Member

3 ITA.No. 502/NAG/2024 vr/- Copy to

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