Lintas Employees Professional Development Trust Vs Income Tax Department (ITAT Mumbai)
In the case of Lintas Employees Professional Development Trust vs Income Tax Department, the Income Tax Appellate Tribunal (ITAT) Mumbai ruled in favor of the assessee concerning the imposition of surcharge on its assessed income. The Trust, formed for the benefit of employees of the Lintas Group, had filed its income tax return for the assessment year 2021–22 declaring a total income of ₹14,33,440. However, during the processing of the return under Section 143(1) of the Income Tax Act, the Centralized Processing Centre (CPC) assessed the income at ₹67,27,280 by adding business income and capital gains, leading to a revised income figure. After the Trust filed a rectification application, CPC recalculated the total income to ₹16,24,880. Alongside this revision, a surcharge of ₹1,73,278 was also levied.
The Trust challenged the surcharge imposition, arguing that under Section 2(29C) and the First Schedule introduced through the Finance Act, 2021, surcharge is applicable only when the total income exceeds ₹50 lakh. They pointed out that the amended Finance Act clearly states the surcharge thresholds, with a 10% surcharge beginning at incomes above ₹50 lakh and scaling based on income brackets. Since the Trust’s total income was well below the ₹50 lakh limit, the levy of the surcharge was claimed to be legally untenable. This position was also backed by the Finance Act, 2023, which reiterated the surcharge application criteria.
