Lipi Jain Family Trust vs. ITO (Exemption)

Parties Involved

Facts Summary

The assessee, Lipi Jain Family Trust, filed an original return of income on 18.02.2017. The trust was created by Shri Babulal Jain for the single beneficiary Lipi Jain. The trust was submitted to be a private specific family trust with no taxable income for the beneficiary. The original return was filed using ITR-7 instead of ITR-5 due to an inadvertent mistake. The Central Processing Center (CPC) processed the return and taxed the income at the maximum marginal rate without considering the nature of the trust and the non-taxability of the beneficiary. The assessee filed a revised return to correct the mistake, but the Income Tax Officer (Appeals) dismissed the appeal, leading to this appeal before the Income Tax Appellate Tribunal (ITAT).…

Legal Issues

• 1. The taxability of income of the assessee as per Maximum Marginal Rate as against the normal rate of tax.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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