TaxTMI 
TaxTMI 
2026 (8) TMI 683
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....ect tax demand. 2) The Learned CIT Appeal erred in law and on facts in invoking the provisions of Section 167B, which are applicable to an Association of Persons AOP Body of Individuals BOI, without appreciating that the present case is governed by Section 168 relating to taxation of estate of a deceased person. 3) The Learned CIT Appeal failed to appreciate that: - The executor is assessed in a representative capacity under Section 168, and - The status of Artificial Juridical Person AJP / AOP is only for administrative OR procedural purposes, and therefore, tax liability must be computed in the same manner and to the same extent as would have been applicable to the deceased individual. 4) The Learned authorities below erred in not applying the rates prescribed under Paragraph A of Part I of the First Schedule to the Finance Act, 2025, which are applicable to individuals, and instead wrongly applied MMR. 5) The Learned CIT Appeal erred in not following and/OR incorrectly appreciating the ratio laid down in - The decision of the Honourable ITAT Mumbai in Estate of Late Harkishin Bhojraj Chanrai vs DCIT CPC - Th....
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....the income of the estate of a deceased person shall be chargeable to tax in the hands of the executor and if there is only one executor as if the executor were an individual. Under clause (b), where there is more than one executor, the income of the estate of the deceased person shall be chargeable to tax in the hands of the executors as if the executors were an association of persons. In the case of the deceased, since there is only one executor, the income of the Estate of Late Rajen Krishnalal Shah shall be chargeable to tax in the hands of the executor, as per clause (a) of sub section (1) of section 168, as if the executor were an individual and not as an AJP, i.e. Artificial Juridical Person. Therefore, it was submitted that there is no justification in applying the maximum marginal rate instead of the slab rates applicable to an individual. Reliance was placed on the decision of the Coordinate Bench of the Mumbai Tribunal in the case of Estate of Vasant Patki vs. DCIT in ITA No. 8970/Mum/2025 dated 30.03.2026. 4. Heard rival contentions and perused the orders of the authorities below. We find that the issue in appeal is covered by the decision of the Coordinate Bench in t....
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....dministering the estate of a deceased person 24. 3.1 From the plane reading above, we find that the Section 168 of the Act governs the assessment of executors in respect of the income of the estate of a deceased person. The provision stipulates that where there is only one executor, the assessment shall be made as if the income were the income of an individual. On the other hand, where there are multiple executors, the estate may be treated as an AOP and taxed accordingly, including under the maximum marginal rate provisions, depending upon the facts. Thus examination of the will of the assessee is essential for determination of correct facts. The relevant part of the will is reproduced as under: "1) 1, Nalini Manilal Kenia of Mumbai, Hindu inhabitant, residing at 275, J. K. House, Telang Road, Matunga East, Mumbai-400 019, do hereby revoke all my wills, codicils and testament and dispositions here before made by me and declare this is to be my last will and testament. I have used my judgment and discretion in making this will and bequests contained therein. I am making this will in my full conscious state being aware of all my acts and the bequests conta....
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....nt names are only for the sake of convenience, and all the assets belonging to me at the time of my death shall be governed by the provisions of this will irrespective of the fact that they may be held in joint names. 11) I am entitled to make this will in respect of all of my properties. 12) I direct that my executor shall out of my estate pay all my debts and liabilities including all taxes and expenses for funeral ceremonies, probate fees, legal expenses and other court fees as may be required and also expenses for administering my estate. 13) I direct my executor to give charity as may deem fit to the status of our family. 14) Subject to the all necessary expenses for obtaining probate of my will, payment of estate duty if any, and any other incidental expenses, all of my assets/effects of whatsoever nature and wheresoever situate and whether movable or immovable property be transferred to a discretionary trust which I propose to create by this will. The trustees of the proposed discretionary trust will be as under: 1) Manilal Jadavji Kenia The trust shall be called "ESTATE OF NALINI MANILAL KEΝΙΑ". Th....