TaxTMI 
TaxTMI 
2026 (1) TMI 685
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....ated 16.03.2023 by the Assessment Unit, Income Tax Department. The grounds of appeal raised by the assessee are as under: "1. Levy of Surcharge of Rs. 1,90,286: 1. Learned CIT(A) erred in confirming the action of AO of levying surcharge at 37 percent of Rs. 1,90,286. 2. Learned CIT(A) erred in observing that the assessee has calculated tax payable by applying MMR (Maximum marginal rate). 3. Learned CIT(A) ought to have appreciated the fact that levy of surcharge at the rate of 37 percent at Rs. 1,90,286 on the tax liability was made by Learned AO without specifying the basis/reason for the said levy. 4. Learned CIT(A) ought to have appreciated the fact that the income of the appellant is below th....
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....nfirming the demand." 2. Brief Facts: Assessee is a private trust created for welfare of the employees of Deloitte Touche Tohmatsu India Private Limited (now known as Deloitte Touche Tohmatsu India LLP), the employees do not have any right to share in the income of the said of the trust. 3. The assessee filed its return of income under the status of "AOP", for AY 2022-23 on 29th July 2022. The total income of assessee consists of interest from fixed deposits. Assessee computed tax at normal rates, whereas the learned AO, CPC had completed the case of assessee @42.74% on maximum marginal rate (30% + 4% cess) including surcharge @37%, vide intimation u/s 143(1) dated 16th March 2023. Accordingly, a demand of Rs. 1,89,880/- has been rais....
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....ginal rates. 6. Ld. AR placed his reliance on CBDT's circular number 577 dated 04.09.1990, clarifying that the cases covered by the first proviso to section164(1) shall not attract the provisions of section 167B. The relevant portion of the said circular furnished before us is extracted as under: "912. Whether section 167B would also apply to income under a trust declared by any person at will, where such trust is only trust so declared by him 1. A question has been raised whether the provisions of section 167B of the Income-tax Act, 1961, which generally provide for charging of tax at the maximum marginal rate on the total income of an association of persons where the individual shares of members in the income of such ....
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....75 (Ahmedabad - Trib), where in the Tribunal had accept the claim of assessee, in terms of clarification issued by CBDT qua provisions clause (ii) of the proviso to section 164(1). 8. Further regarding applicability of surcharge irrespective of the quantum of income while application of MMR is attracted, Ld. AR submitted that the issued is decided by Hon'ble Special bench of ITAT, Mumbai in the case of Araadhya Jain trust vs. Income Tax Officer, (2025) 173 Taxmann.com 343 (Mumbai-trib.), wherein the relevant finding of the Tribunal are as under: 32. 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 Co....
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....eference to the slab rates prescribed in the Finance Act under the "surcharge of Income Tax", accordingly, we hold that even if rate tax is applicable at maximum marginal rate however, if the slab rates are below Rs. 50,00,000/- for levy of surcharge, no surcharge can be levied. Here in this case, it is not in dispute that slab rate of income of the assessee trust is much below of Rs. 50,00,000/- and therefore, surcharge cannot be levied. 10. Based on aforesaid submissions, Ld AR prayed that direct for computing the tax liability at rate of tax applicable to an AOP and delete the surcharge. 11. Per contra Ld. Sr. DR, the respondent supported the orders of revenue authorities. 12. Having given a thoughtful consideration to the facts....