Estate income taxation under section 168(1)(b) must follow normal slab rates, not the maximum marginal rate.

Income of an estate represented by two executors was required to be taxed at the normal slab rates under section 168(1)(b), not at the maximum marginal rate. The return had been filed in the status of an association of persons, and although the lower authorities accepted that status, they still applied the maximum marginal rate. The tribunal held that the applicable provision mandated taxation according to the normal slab rates in the relevant schedule, and the Commissioner (Appeals) had already accepted the basic contention on rate. Non-filing of a reply to notices did not justify applying the wrong rate of tax.

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Issues: Whether the income of an estate represented by two executors was required to be taxed at normal slab rates under section 168(1)(b) instead of at the maximum marginal rate.

Analysis: The return was filed in the status of an Association of Persons for the estate of a deceased individual. The lower authorities had treated the status as AOP but computed tax at the maximum marginal rate. The appellate tribunal noted that the applicable provision required taxation in accordance with the normal slab rates applicable under the relevant schedule, and that the Commissioner (Appeals) had also accepted the assessee's basic contention that slab rates were applicable. On that basis, the non-filing of a reply to the notices did not justify denial of the correct rate of tax.

Conclusion: The income was required to be taxed at normal slab rates and not at the maximum marginal rate.

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