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TMI Blog2025 (5) TMI 1402X X X X Extracts X X X X X X X X Extracts X X X X ..... is a Discretionary Private Trust and income of Rs. 90,13,190/- declared in the return for A.Y. 2022-23 furnished on 28.07.2022. For the year under consideration, assessee earned dividend income of Rs. 90,12,900/- from companies and saving account interest of Rs. 285/-. Assessee calculated the surcharge on dividend @10%. CPC vide intimation order dated 16.03.2023 computed the tax liability of Rs. 8,33,716/-, thereby creating a demand of Rs. 10,26,350/-. While doing so, the CPC calculated the surcharge on the dividend income @37%. 3. Aggrieved assessee preferred appeal before ld.CIT(A) and the ld.CIT(A) affirmed the action of the CPC on the ground that rate of Maximum Marginal Rate has to be calculated as per the provisions of section 2(29C) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eave to add to, alter, amend, modify and/or delete any or all of the above Grounds of Appeal." 5. At the outset, ld. Counsel for the assessee submitted that the case of the assessee's is squarely covered by the decision of Hon'ble Special Bench in the case of Araadhaya Jain Trust vs. ITO in ITA No. 4272/Mum/2024 order dated 09.04.2025 where it has been held that surcharge shall be levied based on the slab rate in First schedule under the heading "surcharge on income tax" appearing in Paragraph A, Part 1, First Schedule, applicable to the relevant assessment year. Referring to the said decision Ld. Counsel for the assessee submitted that for the relevant year under consideration as per the tax rate slab the income of the assessee falls unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(1) of Finance Act, 2023, which refers to the First Schedule and provides for levy of surcharge at slab rates, meaning thereby, the highest rate of surcharge at 37% can be made applicable only when the income exceeds Rs. 5 crores. Thus, he submitted, unless the threshold limit of Rs. 5 crores is reached, surcharge at the highest rate of 37% cannot be levied. He submitted, when assessee's income is returned at Rs. 4,85,290/-, though, the applicable rate of income tax would be at 30%, being the maximum marginal rate, however, no surcharge would be leviable, as the quantum of income is less than Rs. 50 lacs. In support of such contention, Id. Counsel relied upon the following decisions: 1. ITO vs. Tayal Sales Corporation [2003] 1 SOT 57 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot being a case to which any other Paragraph of this Part applies,- Rates of income-tax (1) where the total income does not exceed Rs. 2,50,000 Nil; (2) where the total income exceeds Rs. 2,50,000 but does not exceed Rs. 5,00,000 5 per cent. of the amount by which the total income exceeds Rs. 2,50,000; (3) where the total income exceeds Rs. 5,00,000 but does not exceed Rs. 10,00,000 Rs.12,500 plus 20 per cent. of the amount by which the total income exceeds Rs. 5,00,000; (4) where the total income exceeds Rs. 10,00,000 Rs. 1,12,500 plus 30 per cent. of the amount by which the total income exceeds Rs. 10,00,000. (II) In the case of every individual, being a resident in India, who is of the age of sixty years or more but le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of every individual or Hindu undivided family or association of persons or body of individuals, whether incorporated or not, or every artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 of the Income-tax Act,- (a) having a total income (including the income by way of dividend or income under the provisions of section 111A, section 112 and section 112A of the Income-tax Act) exceeding fifty lakh rupees but not exceeding one crore rupees, at the rate of ten per cent. of such income-tax; (b) having a total income (including the income by way of dividend or income under the provisions of section 111A, section 112 and section 112A of the Income-tax Act) exceeding one crore rupees, but not exceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me exceeding,- (a) fifty lakh rupees but not exceeding one crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of fifty lakh rupees by more than the amount of income that exceeds fifty lakh rupees; (b) one crore rupees but does not exceed two crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees; (c) two crore rupees but does not exceed five crore rupees, the total amount payable as income-tax and surcharge on such income shall not exce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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