RAJIV PASARI FAMILY BENEFICIARY TRUST,KOLKATA vs. ITO, WARD-1(1), , KOLKATA

It was submitted by the Ld.AR the assessee is a private beneficiary trust. It was submission that the income of the assessee was below Rs.50 lakhs. It was further submission that the only issue in the assessee’s appeal was as to whether surcharge is leviable and if leviable whether the slab rate should be applied or the maximum rate is to be applied. It was submission that the CPC when processing the assessee’s return had levied surcharge maximum rate of 25% being slab rate. It was submission that the issue was now squarely covered by the decision of the Special Bench of this tribunal in the case of Araadhya Jain Trust Vs. ITO, reported in [2025] 173 taxxmann.com 343 (Mumbai-Trib)(SB), wherein in para 32 the Special Bench has held as follows :-

However, upon carefully going through these decisions, we are of the considered view that the issue arising in the present case never fell for consideration before the Hon’ble Courts. The issue in dispute in those cases was primarily concerning what should be the maximum marginal rate and its applicability. The issue ‘whether the rate of surcharge would also be at the highest rate while computing tax at maximum marginal rate’ was never the issue before the Hon’ble Courts. Thus, in our view, the view expressed by the coordinate benches in decisions referred to in Paragraph 10(supra) lay down the correct proposition of law. Thus, in the ultimate analysis, we hold, 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’ appearing in Paragraph A, Part 1, First Schedule, applicable to the relevant assessment year. Hence, reference is decided in favour of the assessee. The records may be returned back to the respective benches for deciding the appeals accordingly.

It was submission that as the income of the assessee is below Rs.50 lakhs, no surcharge itself is leviable and this has also been accepted by the CPC in subsequent assessment years.

In reply, the Ld. Sr DR vehemently the orders of the AO and JCIT(A).

I have considered the rival submission. A perusal of the decision of the Hon’ble Special Bench in the case of Araadhya Jain Trust, referred to by the Ld.AR, clearly shows that the issues in the assesse’s appeal squarely covered by the said decision and when the income of the private trust is below Rs.50lakhs, admittedly no surcharge is leviable. Consequently, respectfully following the decision of the Special Bench of this Tribunal in the case of Araadhya Jain Trust, referred to supra, the AO is directed to delete the levy of surcharge as the income of the assessee is below Rs.50 lakhs.