Charitable Trust Taxed at Slab Rates – MMR Application Held Incorrect

Pawai Trust Vs DCIT (ITAT Delhi) The ITAT Delhi allowed the assessee trust’s appeal holding that income of a public charitable trust (not claiming exemption u/s 11) cannot be taxed at Maximum Marginal Rate (MMR) while processing return u/s 143(1). The CPC had applied flat 30% rate treating the assessee as an AOP, but the Tribunal noted that in similar cases and CBDT Circular No.320, public charitable trusts where members do not have determinate shares are taxable at normal slab rates applicable to AOP/individual category and not at MMR. Relying on co-ordinate bench decisions in Vindhya Trust...