2023 (3) TMI 780 - AT - Income Tax

Revision u/s 263 by CIT - Addition u/s 68 r.w.s 115BE - debatable issue - surrendered amount by the assessee during the survey proceedings is credited and the source of such credit is not explained - whether the amount surrendered during survey operation which has been shown in the return of income as business income be taxed as per the provisions of section 115BE - HELD THAT:- A perusal of section 115BBE shows that where the total income of the assessee includes any income referred to in sections 68, 69, 69A, 69B, 69C or 69D, the income tax payable shall be @ 30% on income so referred to in the said sections.

Amended provisions of section 115BBE of the Act by Taxation Laws, Second Amendment Act 2016 provides that any income referred to in sections 68, 69, 69A, 69B, 69C, or 69D if such income is not reflected in the return of income furnished under section 139 of the Act, income tax payable shall be @ 60% on income so referred in the said section.

Change which has been brought about in the provisions relates to income so referred to in the afore-stated sections so defined which is either not reflected in the return of income or determined by the assessing officer and in both the cases it will be covered by the provisions of section 115BBE and the rate of taxation has been increased from 30% to 60% on such specified income.

Nothing stated in the pre-amended or post amended provisions of section 115BBE that where the assessee surrenders undisclosed income during search action for the relevant year, the tax rate has to be charged as per provisions of section 115BBE - Therefore, the applicability of the amended provisions which prompted the PCIT to assume jurisdiction under section 263 is highly debatable issue, and therefore, in our understanding of the law, the PCIT has wrongly assumed jurisdiction. Appeal of assessee allowed.