Lintas Employees Holiday Assistance Trust Vs ITO (ITAT Mumbai)
The assessee, an Association of Person (AOP) created for the benefit of employees of the Lintas Group, challenged the levy of surcharge of 37% on its income for Assessment Year 2023-24. The assessee had declared total income of Rs. 4,42,960/-. The return was processed under section 143(1) of the Income Tax Act, 1961, and a surcharge of 37% was levied, resulting in a demand of Rs. 52,600/-. The CIT(A) dismissed the appeal, holding that the assessee was liable to tax at the Maximum Marginal Rate (MMR) along with surcharge of 37%.
Before the ITAT Mumbai, the assessee contended that surcharge should not be levied over and above the MMR and relied upon section 2(29C) of the Act. It was also contended that, even if surcharge was otherwise applicable, the assessee’s income was below the Rs. 50 lakh threshold prescribed for surcharge. The Departmental Representative submitted that MMR was in addition to surcharge and supported the levy made by the lower authorities.
The Tribunal considered two issues: whether MMR under section 2(29C) includes surcharge and, if surcharge is separately leviable, whether it applies where total income does not exceed Rs. 50 lakh. On the first issue, the Tribunal rejected the assessee’s contention that MMR itself included surcharge. On examining the Finance Bill, 2022, it held that the surcharge was to be separately imposed according to the applicable provisions.
