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Judgment
PER AMITABH SHUKLA, AM
This appeal by the assessee is directed against the order of learned CIT(A)-7, Mumbai dated 31st December, 2024 for the assessment year 2024-25.
The only issue raised in this appeal by the assessee is relating to the application of rate of surcharge on income tax at 25% by the authorities below instead of 15% as claimed by the assessee.
Brief facts of the case are that the assessee is an AOP and has filed its return of income on 30th July, 2024 declaring total income of ₹1,27,84,660/-, which was duly processed under Section 143(1) of the Income-tax Act, 1961 (in short 'the Act') on 30th October, 2024. The assessee was taxed at the maximum marginal rate of tax. The surcharge applied was at the rate of 25% as against 15% claimed by the assessee.
After hearing both the sides and perusing the material placed before us, it is observed that the issue involved in the present appeal is no longer res integra. The Special Bench of the Mumbai Tribunal in the case of Aradhya Jain Trust Vs. ITO in ITA No.4272/Mum/2024, Order dated 9th April, 2025, has held in Paragraph 32 as under:-
"In the ultimate analysis, we hold, in case of private discretionary trusts, whose income is chargeable to tax at maximum marginal rate, surcharge has to be computed on the income tax having reference to the slab rates prescribed in the Finance Act under the head 'surcharge on income tax' appearing in paragraph A, part 1, first schedule, applicable to the relevant assessment year. Hence reference is decided in favour of the assessee."
In view of the above position, we are of the considered view that the learned CIT(A) has erred in holding that the entire income of the assessee is required to be subjected to MMR with surcharge @ 25%. The assessee has rightly claimed the levy of surcharge @ 15% in its return of income. Accordingly, respectfully following the above decision of the Special Bench of the Tribunal, we set aside the order of learned CIT(A) and allow the appeal of the assessee.
In the result, the appeal of the assessee is allowed. Decision pronounced in the open Court on 27th February, 2026.