Maximum marginal rate under section 167B held inapplicable where the assessee's new-regime option was relevant to tax computation.

Section 167B maximum marginal rate was held inapplicable on the facts of the case despite the revenue's computation under the regular assessment and surcharge framework, because the assessee's position under section 115BAC(1A) did not justify applying MMR. The Tribunal considered the interaction of sections 167B, 115BAC(1A), 160 and 164, and found that the CPC's tax calculation could not stand. The lower orders were set aside and the assessing officer was directed to recalculate tax, if any, without applying MMR.

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Issues: Whether the maximum marginal rate (MMR) under section 167B of the Income-tax Act, 1961 was correctly applied by the revenue authorities to the assessee for Assessment Year 2024-25 notwithstanding the assessee's option under section 115BAC(1A) of the Income-tax Act, 1961 and related provisions.

Analysis: The appeal challenges imposition of tax at the MMR together with surcharge by CPC and its confirmation by the first appellate authority under an order passed pursuant to assessment under section 143(3) of the Income-tax Act, 1961. The question for determination is whether section 167B applies so as to attract MMR despite the assessee's declared income and its tax option under the new regime as reflected in the intimation. Consideration is given to the interaction between section 167B and section 115BAC(1A), and to the relevance of provisions such as section 160 and section 164 as invoked by the revenue and the appellant. The Tribunal examined whether the factual position and the statutory option resulted in the assessee being liable to MMR, and whether the CPC's computation should be set aside and taxes recalculated without applying MMR. The Tribunal also took into account the appellant's reference to CBDT Circular No. 320 dated 11-01-1982 as part of the factual and legal matrix informing the proper application of section 167B.

Conclusion: The Tribunal concluded that MMR under section 167B is not applicable to the assessee in the circumstances of the case and set aside the orders of the lower authorities. The matter is remitted to the assessing officer to recalculate tax, if any, without applying MMR.

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