Srijan Family Trust Vs ITO (ITAT Delhi)
The appeal before the Income Tax Appellate Tribunal (ITAT) in Delhi, filed by Srijan Family Trust, was a challenge to an order by the Commissioner of Income Tax (Appeals) (CIT(A)) that upheld an incorrect surcharge levy on the trust’s dividend income for the Assessment Year 2023-24.
Factual Background
The case began when the trust filed its income tax return, declaring an income of ₹1,30,13,620. During the processing of the return under Section 143(1) of the Income Tax Act, 1961, the Centralised Processing Centre (CPC) computed the tax liability by applying a surcharge rate of 37% on the dividend income.
Aggrieved by this assessment, the trust filed an appeal before the CIT(A), arguing that the correct maximum surcharge rate on dividend income should be 15%. However, the CIT(A) dismissed the appeal, upholding the CPC’s assessment. Consequently, the trust filed the present appeal before the ITAT.
Arguments and Holding of the Tribunal
During the hearing, the counsel for the trust contended that the CIT(A) had made a significant error in confirming the 37% surcharge, which was incorrect as per the law. A crucial development in the case was highlighted by the counsel: the trust had also filed a separate rectification application under Section 154 of the Act with the CPC against the original intimation.
