Aradhya Jain Trust Vs ITO (ITAT Mumbai)
ITAT Mumbai held that assessee being private discretionary trust is liable to pay tax at maximum marginal rate and the applicable rate of surcharge 37%. Accordingly, order of CIT(A) upheld and appeal of assessee dismissed.
Facts- Assessee is a private discretionary trust liable to pay income tax at maximum marginal rate filed its return of income for A.Y. 2022-23. The only dispute involved herein is that assessee has computed surcharge on the tax payable amounting to ₹1,67,271/-whereas the surcharge computed by Central Processing Centre is ₹6,18,903/-. Assessee computed surcharge @10% as per return of income filed. However, the Central Processing Centre computed surcharge @37% on the tax payable. CIT(A) rejected the appeal of the assessee. Being aggrieved, the present appeal is filed.
Conclusion- The levy of maximum marginal rate on trust is thus specific anti Avoidance rule and therefore should be given a strict interpretation. Law prescribes that tax shall be charged on income in respect of which such person is so liable at the maximum marginal rate. There is no provision in the law to charge specific discretionary trust bit lower than the rates of tax and surcharge applicable to a beneficiary individual.
