TaxTMI 
TaxTMI 
2026 (5) TMI 1716
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..... 2017- 18. 2. The assessee has raised the following grounds of appeal: "1.1 The order passed by U/s.250 passed on 12.09.2025 for A.Y. 2017-18 by Addl./JCIT(A), Madurai (for short CIT(A)" upholding the validity of rectification u/s 154 and confirming the income of Rs. 1,25,10,000/- declared during the course of survey u/s 133A as unaccounted income u/s 69A instead of business income is wholly illegal, unlawful and against the principles of natural justice. 2.1 The ld. CIT(A), has grievously erred in law and or on facts in not considering fully and properly the submissions made and evidence produced/relied upon by the appellant with regard to the validity of order u/s 154 as well as nature of income declared during the c....
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....out under section 133A at the business premises of the assessee on 07.09.2016 and concluded on 08.09.2016. During the course of survey proceedings, statement of one of the partners, Shri Vishal Jagdishbhai Patel / Shri Prashant Shah, was recorded under section 131 read with section 133A of the Act and certain documents including Annexure-A/1 comprising diary pages were examined by the Department. Subsequently, the case was selected for compulsory scrutiny and during the course of regular assessment proceedings, the Assessing Officer also examined the statement recorded during the course of survey as well as the impounded diary containing details of transactions. After considering the material available on record and submissions furnished by....
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....ceipts in books. The assessee therefore contended that once the income had been assessed under the head "business income", the same could not subsequently be recharacterized as unexplained income under section 69A by invoking rectification jurisdiction under section 154 of the Act. 5. The assessee further argued before the Assessing Officer that the issue involved was highly debatable and required detailed examination of facts and interpretation of provisions of section 69A and section 115BBE and therefore such issue fell outside the limited scope of rectification proceedings contemplated under section 154. 6. The Assessing Officer, however, rejected the explanation of the assessee and passed order under section 154 of the Act holding....
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....e assessee had remained silent on this aspect and there was nothing on record to demonstrate that the assessee had fulfilled the requirements raised by the Assessing Officer during any stage of proceedings. The Ld. CIT(A) further observed that since the income was not recorded in the books at the time of survey, the subsequent disclosure in return of income would not take the case outside the purview of section 69A and section 115BBE. Accordingly, the Ld. CIT(A) held that the Assessing Officer was justified in invoking section 154 and treating the survey disclosure as unexplained income taxable under section 115BBE at special rates. The appeal of the assessee was therefore dismissed. 8. The assessee is in appeal before us against the ord....
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....he Assessing Officer invoked powers under section 154 of the Act on the premise that there was a mistake apparent from record inasmuch as the surrendered income ought to have been treated as unexplained income under section 69A taxable under section 115BBE. In our considered view, the entire exercise undertaken by the Assessing Officer under section 154 is wholly beyond the limited jurisdiction contemplated under the said provision. 12. At this stage, it would be relevant to refer to the decision of the Coordinate Bench of Ahmedabad Tribunal in the case of M/s. 9th Street Architects v. DCIT in ITA No.1463/Ahd/2025 dated 17.10.2025, wherein under almost identical facts, the Tribunal held as under:- "On careful consideration of th....
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.... the Act." 15. The facts involved in the present appeal are materially identical to those before the Coordinate Bench in the case of 9th Street Architects wherein surrendered income disclosed during survey was subsequently treated by the Assessing Officer as unexplained income under section 69A through rectification proceedings under section 154. Respectfully following the aforesaid decision, we hold that the Assessing Officer was not justified in invoking section 154 for changing the character of income already accepted during scrutiny assessment. 16. We further find that the issue involved is highly debatable and therefore outside the purview of section 154 proceedings. The Hon'ble Supreme Court in the case of T.S. Balaram v. Volkar....