MANJAR DISCRETIONARY FAMILY TRUST,RAJKOT vs. ITO WARD 1(1)(1), RAJKOT, RAJKOT

ITA 164/RJT/2025Status: DisposedITAT Rajkot15 October 2025AY 2024-2510 pages
AI SummaryN/A

What did the Tribunal hold?

The Income Tax Appellate Tribunal (ITAT) noted that the issue is covered by a binding precedent from ITAT Mumbai (Araadhya Jain Trust vs. ITO). This precedent clarifies that for discretionary trusts, surcharge is to be computed based on the slab rates prescribed in the Finance Act, and not at the maximum marginal rate of 37% if the income is below the threshold for such a high rate. As the assessee's income of Rs. 4,20,380/- was below Rs. 50 lakhs, no surcharge was applicable. The tribunal, therefore, allowed the assessee's appeal.

What were the facts?

The assessee, Manjar Discretionary Family Trust, filed its return for AY 2024-25, declaring a total income of Rs. 4,20,380/- and claiming a refund of Rs. 51,750/-. The Central Processing Centre (CPC) determined a lower refund of Rs. 1,250/- and imposed a surcharge of 37% (Rs. 46,662/-) and health & education cess of Rs. 6,911/-. The assessee challenged this, arguing that surcharge was not applicable as its gross total income was below Rs. 50 lakhs, but the CIT(A) upheld the CPC's decision.

What were the issues?

Whether surcharge and health & education cess are correctly imposed on a discretionary trust when its total income is below Rs. 50 lakhs, and the proper interpretation of 'maximum marginal rate' for such trusts.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 244A,Section 164,Section 167B,Section 2(29C),Section 2,Section 111A,Section 112,Section 112A,Section 115JB,Section 115JC,Section 115BAC,Section 161,Section 164A,Section 271,Section 265

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT

Before: DR. ARJUN LAL SAINI, ACCOUNTNT MEMBER & SHRI DINESH MOHAN SINHA, JUDICIAL MEMBR

Hearing: 29/09/2025Pronounced: 15/10/2025

Per Dr. Arjun Lal Saini, A.M Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2024-25, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), ADDL/JCIT(A)-12, Mumbai [in short "the ld. CIT(A)"], dated 12.02.2025, which in turn arises out of an assessment order passed by Assessing Officer u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), dated

The order continues below.

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