Estate of Nalini Manilal Vs ITO (ITAT Mumbai)
The ITAT Mumbai considered an appeal by the Estate of Nalini Manilal against the order dated 27 March 2025 passed by the CIT(A) for AY 2024-25. The assessee had filed its return in the status of an Association of Persons (AOP). While processing the return, the CPC applied the maximum marginal rate (MMR), treating the assessee as an AOP. The assessee challenged the computation, contending that the estate of the deceased should be taxed at normal slab rates applicable to an individual under Section 168(1)(a) of the Income-tax Act.
The assessee submitted that the executor of the estate was a single individual, Shri Manilal Jadavji Kenia, the husband of the deceased, and relied upon Section 168 and judicial decisions concerning taxation of estates. The assessee also contended that the AOP status was used only for statistical purposes and that Section 167B should not result in taxation at the maximum marginal rate.
The Tribunal examined Section 168, which provides that income of the estate of a deceased person is chargeable to tax in the hands of the executor. Under Section 168(1)(a), where there is only one executor, taxation is to be made as if the executor were an individual. Where there are more executors than one, Section 168(1)(b) provides for treatment as an AOP.
