TaxTMI 
TaxTMI 
2023 (9) TMI 1305
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....ssee filed his return of income for Assessment Year 2017-18 on 16.12.2017 showing income at Rs. 55,02,880/-. The survey operation under Section 133A of the Act was carried out on the business premises of the assessee on 26.04.2016 wherein the assessee admitted undisclosed income of Rs. 40 lakh and surrendered the same as normal business income in her ITR. Thereafter, the case of the assessee was subjected to compulsory scrutiny as per the guidelines issued by CBDT. The notices under S. 143(2) and 142(1) were sent online through online and requisite information and evidences were collected by the Assessing officer[AO]. The AO inter alia took note of the additional income included by the assessee in its e-return of income and accepted the e-return without any adjustment while framing the e-assessment order under Section 143(3) dated 20.12.2019 after making a brief reference to factum of survey and inclusion of additional income of Rs. 40 Lakhs in the ROI. Thereafter, the Pr.CIT in exercise of revisionary powers, issued show cause notice dated 09.02.2022 under Section 263 of the Act requiring the assessee to show cause as to why the assessment framed under Section 143(3) should not be....
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[email protected]) or through e-proceedings by 16.02.2022. In case of no reply is received, it shall be assumed that you do not wish to say anything in the matter and the matter would be decided as per material on record without any further notice/intimation to you." 5. As per the show cause notice, the Pr.CIT observed on the basis of perusal of case record that the additional income of Rs. 40 lakh offered are largely in the nature of unexplained cash, excess stock and unexplained advances as on the date of survey which is liable to be assessed under Section 68/69/69A/69B/69C of the Act and consequently the tax payable on such undisclosed income is susceptible to enhanced tax rate of 60% as per Section 115BBE of the Act inserted in this regard. The Pr.CIT thus alleged that the Assessing Officer has incorrectly adopted the normal rate of taxation at 30% as offered by the assessee overlooking the counterveiling provisions of Section 115BBE of the Act. The response and explanation of the assessee towards show cause notice was taken note of, by the Pr.CIT as per paragraph 5 of its revisional order. On consideration thereof, the Pr.CIT passed the order under Section 263 of th....
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....of statutory enactment, the AO was guilty of depriving the Revenue of its lawful dues while framing assessment and hence committed error causing prejudice to the interest of revenue. It was thus contended that the Pr. CIT had ample jurisdiction under S. 263 read with Explanation-2 thereto to invoke the revisional powers conferred under S. 263 of the Act and thus no interference therewith is called for. 9. We have considered the rival submissions on the maintainability of revisional action in the factual matrix towards taxability of income surrendered in the course of survey prescribed under Section 115BBE of the Act. 9.1 Section 263 of the Act confers power upon the Pr.CIT/CIT to call for and examine the records of a proceeding under the Act and revise any order, if he considers the same to be erroneous and prejudicial to the interest of the Revenue. The Pr.CIT can however take recourse to revision under Section 263 of the Act only where the assessment order is erroneous as well as prejudicial to the interest of the revenue. The twin conditions are required to be satisfied simultaneously. The Pr.CIT in the present case has purported to act in exercise of power under Section 263 o....
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.... revisional powers. It goes without saying that if so permitted, will render the task of the AO arduous and prone in almost every case. 11. In this backdrop, turning to the facts, the Assessing Officer in the assessment order duly noted the factum of survey operation carried out under Section 133A of the Act at the business premises of the assessee on 16.04.2016. In the course of survey proceedings, certain loose documents were found and impounded on the basis of which the assessee surrendered Rs. 40 lakh during the year as his unaccounted income. It is also an admitted position that assessee has duly reflected the aforesaid amount in his income tax return and has paid taxes thereon albeit at normal rate. Thus, the controversy as per the revisional order hinges on a narrow compass. The assessment order has been sought to be revised on the ground that undisclosed income in the nature of unexplained cash, unexplained stock and unexplained advances surrendered during the course of survey proceedings were required to assessed under Section 68/69/69A/69C etc. and consequently the assessee was required to pay tax under Section 115BBE at a penal rate of 60% applicable w.e.f. 01.04.2017 a....
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....s correctly disclosed in the ROI. The action of AO is not open to attack as erroneous where a view taken is in the realm of a possible view and not found to be wholly incongruous to facts or law. On the face of available facts, one can not say without any reservation that no plurality of opinion can exist on the point and such additional income cannot be treated as business income at all as adjudged by AO. This makes the action of the AO is the league of being plausible. The power of review cannot be exercised to collect more taxes merely owing to the reason that the law now provides for penal and steep rate of taxation by bringing such income within the ambit of S. 68/69 etc. 13.1 Significantly, the PCIT, while seeking to set aside the action of AO and remitting the matter back for further enquiries, did not bring any definite material to show any incorrect assumption of such facts on this score. Besides, no observations are found in the impugned revisional order suggesting a course to be adopted towards manner of determining true character of additional income or the nature of enquiries expected from AO. 13.2 In the similar factual circumstances and in the context of section 26....
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....d right under the law as it stood before the amendment. The Hon'ble Gujarat in the case of CIT vs. Nirmal Textiles 224 ITR 378 (Guj.) observed as under: "Section 4 of the Act is the charging section which provides that where any Central Act enacts that income-tax shall be charged for any assessment year at any rate or rates, income-tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of the Act in respect of the total income of the previous year of the person. The provision is obvious, that the charge of income-tax does not come into existence before enactment of a Central Act brings it to life by requiring the charge of income-tax in respect of the income of the previous year. It is also clear that the tax chargeable under s. 4 is the tax for the assessment year for which charge has been brought to life and is not charge ipso facto coming into existence at the time of earning income during the previous year, i.e., tax is to be assessed for the assessment year in respect of the income of the previous year and not vice versa, namely, tax is not to be assessed for the previous year but is assessed for the assessment year i....
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....d the law applicable at the beginning of the assessment year would thus be applicable and tax rate applicable as per substituted S. 115BBE would apply for all income falling in the ambit of Section 115BBE without any further bifurcation of the previous year. 14.5 The plea that substituted provision of S. 115BBE is not applicable for the earlier period in the same previous year thus fails at the threshold. 15. In this view of the matter, we are dis-inclined to agree with the second plea for lack of jurisdiction for revision exercised by the PCIT under S. 263 of the Act. 16. We also take note of another argument advanced on behalf of the assessee that in view of the PTI press release by CBDT dated 28.11.2016 whereby the amended Section 115BBE of the Act providing hiked taxation @ 60% would come into effect after the closure of PMGKY Scheme which, according to the Assessee, ended on 31.03.2017. The assessee thus contends that the income arising after 31.03.2017 would only face the wrath of penal rate of S. 115BBE of the Act and would thus apply to AY 2018-19 onwards. 16.1 We do not see any merit in this plea either. The substituted provision of S. 115BBE has come into effect w.e.f....