TMI Blog2020 (10) TMI 559X X X X Extracts X X X X X X X X Extracts X X X X ..... and which is now sought to be rectified in terms of impugned order - Both the income so offered by the assessee as well as rate of taxation has been accepted by the AO and in fact, we find that there is a specific finding by the Assessing officer in the assessment order that the assessee has also paid all due tax with interest in respect of the undisclosed income. No finding that any of the aforesaid provisions so referred in section 115BBE have been invoked by AO during the assessment proceedings and therefore, we find that the contention of the Assessing officer that during the assessment proceedings, the tax rate has been charged @ 30% on surrendered income u/s 115BBE of the Act is not factual correct as not borne out of assessment records and thus, the action of the Assessing officer in rectifying and increasing the rate of taxation from 30% to 60% and surcharge and cess on such undisclosed income doesn t come within the purview of section 154 of the Act. Appeal of the assessee is allowed. - ITA No. 186/JP/2020 - - - Dated:- 9-10-2020 - Shri Vijay Pal Rao, JM And Shri Vikram Singh Yadav, AM For the Assessee : Sh. S. R. Sharma (CA) And Sh. Rajnikant Bhatra (CA) F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. It was further submitted that the A.O. thereafter issued notice u/s 143(2) which assessee duly complied with by filing information/details as required and Ld. A.O. completed the assessment u/s 143(3) accepting returned income as declared by assessee. Separately, penalty proceedings u/s 271AAB(1)(a) were initiated by the A.O. stating that As the assessee has declared the undisclosed income of ₹ 22,19,590/- which he surrendered during the search and seizure action and substantiated the manner in which the undisclosed income was derived. The assessee has also paid all due tax with interest in respect of above disclosed income. Hence, the penalty proceedings u/s 271AAB (1) (a) are also being initiated separately. The A.O. in assessment completed u/s 143(3) also charged the tax and interest at normal rates of tax for individual and raised NIL demand. 5. It was further submitted that the A.O. thereafter issued notice u/s 154 giving particulars of mistake as under: It is observed that it is a search assessment case and assessee has surrendered of ₹ 22,19,560/- during the search action as an undisclosed income for the year under consideration, on which tax rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment but determined tax payable by assessee at normal tax rates as is evident from assessment order. The AO in the notice u/s 154 issued to assessee has wrongly stated that during the tax calculation, the tax rate on surrendered income u/s 115BBE has been applied @ 30%. Thus notice u/s 154 pointing out mistake was on wrong facts. Thus when provisions of section 115BBE was not at all invoked while passing the assessment order, then it cannot be held in notice u/s 154 that the same was a mistake apparent from record. It was further submitted that the applicability or non-applicability of provisions of section 115BBE on such facts is debatable issue which should have been taken in completing regular assessment u/s 143(3) and not in proceedings u/s 154 of the Act. It was submitted that this is not an obvious or patent mistake which is apparent from the record. In support, the reliance was placed on the Co-ordinate Bench decision in case of ACIT vs. Sudesh Kumar Gupta reported in 117 Taxmann.com 178. 8. It was further submitted that the amendment provisions of section 115BBE of the Act as amended by the Taxation (Second Amendment) Act, 2016 are applicable from 15.12.2016 and are n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16-17 and the assessee s case clearly falls under the financial year 2016-17 relevant to assessment year 2017-18. The ld DR accordingly supported the findings of the lower authorities. 10. We have heard the rival contentions and perused the material available on record. We refer to the order passed by the Assessing officer u/s 154 and the findings of the Assessing officer therein read as under: In this case the assessment under section 143(3) r.w.s 153A of the I.T. Act, 1961, for the assessment year 2017-18, was completed on 06.12.2018, at assessed income of ₹ 41,78,390/-. As this is a search assessment case and assessee surrendered of ₹ 22,19,590/- during the search action as an undisclosed income for the year under consideration, on which tax rate was to be charged as per provision of section 115BBE of the I.T. Act. However during the assessment proceedings the tax rate on surrendered income u/s 115BBE of the I. T. Act, charged @ 30% whereas as per second amendment in provision of section 115BBE of the I.T. Act (w.e.f 01.04.2017), the tax rate should have been charged @ 60% on the above surrendered amount, in addition to this 25% surcharge on such tax and 3% e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said sections. Thus, both the pre-amended and post-amended provisions of section 115BBE talks about the income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D. The change which has been brought about in the provisions relates to income so referred in aforesaid provisions so defined which is either reflected in the return of income or determined by the Assessing officer and in both cases, it will be covered by the provisions of section 115BBE of the Act and rate of taxation has been increased from 30% to 60% on such specified income. There is therefore nothing stated in either the pre-amended or post-amended provisions of section 115BBE that where the assessee surrenders undisclosed income during the search action for the relevant year, the tax rate has to be charged as per provision of section 115BBE of the Act. Therefore, without dwelling further on the applicability of the amended provisions of section 115BBE for the impugned assessment year, the reasoning so adopted by the Assessing officer in terms of applicability of section 115BBE by default in search cases cannot be accepted and in any case, the same is clearly not a mistake which ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
