2025 (11) TMI 161

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....we are tasked to decide the sole issue in dispute that whether the surcharge @ 37% levied by the Assessing Officer ('AO') on income of Rs. 34,07,065/- (excluding dividend income of Rs. 6,09,34,668/- out of the returned income of Rs. 6,43,41,730/-) as against the admitted surcharge @ 15% is justified and in accordance with the law. 3. The relevant facts giving rise to this appeal are that the appellant assessee, a trust not availing benefits of section 11 of the Income Tax Act, 1961 ('Act'), filed its Income Tax Return ('ITR') of the relevant year on 19.07.2023 declaring income of Rs. 6,43,41,730/- (including dividend income of Rs. 6,09,34,668/-) of the relevant year. The said ITR was processed under section 143(1) of the Act, wherein the....

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....iation of persons consisting of only companies as its members, or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act, not having any income under section 115AD of the Income-tax Act, and not having any income chargeable to tax under sub-section (1A) of section 115BAC of the Income-tax Act,- (i) having a total income exceeding fifty lakh rupees but not exceeding one crore rupees, at the rate of ten per cent of such income-tax; (ii) having a total income exceeding one crore rupees, but not exceeding two crore rupees, at the rate of fifteen per cent of such income-tax; (iii) having a total income exce....

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....e (excluding the income by way of dividend or income under the provisions of section 111A, section 112 and section 112A of the Income-tax Act) exceeding five crore rupees, at the rate of thirty-seven per cent of such income-tax; and (e) having a total income (including the income by way of dividend or income under the provisions of section 111A, section 112 and section 112A of the Income-tax Act) exceeding two crore rupees, but is not covered under clauses (c) and (d), shall be applicable at the rate of fifteen per cent of such income-tax: Provided that in case where the total income includes any income by way of dividend or income under the provisions of section 111A, section 112 and section 112A of the income-tax Act, th....

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....sions of the Act. It has been further held by the Tribunal (Special Bench) in the case of Araadhya Jain Trust (supra) that the 'slab' refers to income and not 'tax' and not the surcharge. In terms of sections 164 and 167B read with section 2(29C) of the Act, tax as per Maximum Marginal Rate ('MMR') would mean 'the rate of tax applicable to the highest slab of income' under the item (1) of Paragraph A, Part (I) of First Schedule to the Finance Act, and not highest slab of surcharge. 8. In the present case, there is no dispute on rate of tax. A conjoint reading of sections 164 and 167B of the Act does not mention the rate of surcharge. Section 2(29C) of the Act does not itself prescribe the rate of surcharge; instea....