Surcharge leviable in case of firm if its total income exceeds INR 1 crore

Bhavani Engineering Vs ITO (ITAT Hyderabad)

ITAT Hyderabad held that mentioning of firm in 2(3)(b) of the Finance Act, 2018 excludes it from 2(3)(a). Accordingly, in case of firm, surcharge is leviable only when its total income exceeds INR 1 crore and not otherwise.

Facts- Assessee is a partnership firm, carrying the business of generation of solar energy. The returns of income filed by the assessee for A.Y. 2018-19 and 2019-20 were processed under section 143(1) of the Income Tax Act, 1961. Surcharge at the rate of 10% on the income returned by the assessee was levied. According to the assessee, such a levy of surcharge, excess education cess, interest etc., are erroneous. The request of the assessee for a rectification thereof was rejected.

CIT(A) upheld the levy of surcharge, etc. and dismissed the appeal. Being aggrieved, the present appeal is filed by the assessee.

Conclusion- The legislative wisdom cannot be doubted in making this clear and distinct treatment of various categories of persons for the purpose of levy of surcharge and one category of person for this treatment cannot be construed to include another category of persons in it.

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