Estate of Late Rajen Krishnalal Shah Vs ITO (ITAT Mumbai)
Mumbai ITAT: Sole Executor of Deceased’s Estate Entitled to Individual Slab Rates, Not Maximum Marginal Rate
The Mumbai ITAT held that where an estate of a deceased person is administered by a sole executor, tax must be computed at the slab rates applicable to an individual under section 168(1)(a), and not at the Maximum Marginal Rate (MMR) by treating the estate as an Artificial Juridical Person (AJP).
The executor of the Estate of Late Rajen Krishnalal Shah had filed the return under section 168. However, while processing the return under section 143(1), CPC treated the estate as an AJP and levied tax at MMR, resulting in a higher tax demand. The assessee contended that, since there was only one executor, section 168(1)(a) mandated taxation as if the executor were an individual.
The Tribunal noted that section 168 draws a clear distinction between a sole executor and multiple executors. Where there is only one executor, the assessment is to be made as if the executor were an individual; only where there are multiple executors is the estate assessed as an Association of Persons (AOP).
Relying on its earlier decisions in Estate of Vasant Patki, Estate of Nalini Manilal, and Estate of Late Harkishin Bhojraj Chanrai, as well as the Madhya Pradesh High Court decision in CIT v. G.B.J. Sheth, the Tribunal reiterated that the representative status of the executor does not justify application of MMR where section 168(1)(a) applies.
Since the Will appointing the executor had not been examined by the Assessing Officer or the CIT(A), the Tribunal restored the matter to the Assessing Officer to verify the testamentary documents and, if there is only one executor, compute the tax at the rates applicable to an individual instead of the Maximum Marginal Rate.
Accordingly, the assessee’s appeal was allowed for statistical purposes, with directions to reassess the estate in accordance with section 168 after verification of the Will.
Cases Discussed
- Estate of Vasant Patki vs. DCIT, ITA No. 8970/Mum/2025 dated 30.03.2026
- Estate of Nalini Manilal vs. ITO, ITA No. 2412/Mum/2025 dated 31.07.2025
- Estate of Late Harkishin Bhojraj Chanrai vs. DCIT, ITA No. 2324/Mum/2021 dated 29.06.2022
- CIT vs. GBJ Sheth and Another (Madhya Pradesh High Court), (1982) 133 ITR 192 (MP)
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal is filed by the Assessee against the order of learned Additional/Joint Commissioner of Income Tax (Appeals), Faridabad [“Ld. Addl./JCIT(A)”] dated 30.03.2026 for the Assessment Year 2025 2026 arising out of the intimation passed u/s 143(1) of the Act.
