TaxTMI 
TaxTMI 
2026 (6) TMI 36
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....was passed in which the tax rate of 77.25V as applied and tax and interest demand of Rs. 5,86,901/- was made. Against the AO order passed u/ 154 assessee had filed an appeal before the CIT (A) but as not accepted the submission of assessee and confirmed the order of AO. 2. That the survey u/s 133A was conducted on 22.09.2016 hat is before the 2nd amendment which received the assent of the president on 15.12.2016 so the provision of sec. 115BBE is not applicable on the date of survey. 3. That the rectification u/s 154 can be carried only for the mistakes apparent from record & not for change opinion, the order thus issued under sec. 154 being illegal prayed to be quashed." 2. The facts giving rise to the present appeal are that, in this case, the assessment u/s 143(3) of the Income Tax Act, 1961 ("Act", for short) was completed on 30.06.2019. Thereafter, the Assessing Officer ("AO", for short) rectified the order by passing an order u/s 154 r.w.s. 143(3) of the Act dated 24.11.2022, thereby, the Assessing Officer charged tax as per provision of Section 115BBE of the Act. Aggrieved by this, the assessee preferred appeal before the Ld. CIT(A) who dismissed the app....
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....ng income. On 22.09.2016 survey u/s 133A was conducted at the business premises of the assessee. The excess medicine stock as found was part of its stock in trade and excess cash are also related to his business. The difference in the quantity of stock and cash was during the normal business activities of the assessee. That during the course of survey proceedings and assessment proceedings the assessee has explained before AO that surrender of excess stock and cash was in relation to business activities and it has direct nexus with business activities, accordingly the assessee has included the same under the head "Income from Other Sources" and paid the taxes @ 30%. It is undisputed by the AO that the assessee is having only source of income from trading of medicine. The additional income i.e. income from other sources was offered on account of difference in the stock as per books of accounts and as actually found during the course of survey and cash related to business. AO has no where in his order has mentioned that the surrender has came out of other income other than business by that it can be said that the surrender amount was related to the business of the assessee. Assessee ....
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....presents the earliest point of time at which the same is to take effect, i.e., 15/12/2016 itself, and which also explains the same being enacted during the course of the fiscal year, tax rates for which stand already clarified at the beginning of the year per the relevant Finance Act (FA, 2016). The said words "at once" would loose significance if the provisions of the Act are to, as stated by the ld. CIT(A), be read as effective 01/04/2017, implying AY 2018-19. The same, for substantive amendments, as in the instant case, represents the first day of the assessment year, i.e., AY 201718, which explains the assessee's grievance of it being thus effective for FY 2016-17 or, w.e.f. 01/4/2016. Enacting it mid-year and, further, making it applicable "at once", becomes meaningless if the same is to take effect retrospectively, or is made effective from a later date (01/4/2017), which could in that case be by Finance Act, 2017. True, the amendment, where so read, does gives rise to a peculiar situation inasmuch as two tax rates would obtain for the current year, i.e., one from 01/04/2016 to 14/12/2016, and another from 15/12/2016 to 31/03/2017, but, then, that is no reason to read ret....
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....nsideration is that the amendment in section 115BBE came into force only on 15.12.2016 whereas the search was conducted on 16.08.2016 and the assessee has paid tax@ 30%. Since the search in the case of the assessee was carried out before the amendment the addition ought to have been made in terms of the prevailing provision and therefore, the addition made by the assessing officer invoking section 115BBE, provision of which came into force only on 01.04.2017, is not sustainable. Therefore, we note that assessee's issue is squarely covered by the aforesaid precedents, hence we allow the appeal of the assessee. 9. In the result, appeal filed by the assessee is allowed" (Copy enclosed as per Annexure - 4 Page No 45 to 53) That the rectification u/s 154 can be carried only for the mistakes apparent from record & not for change of opinion, the order thus issued under sec. 154 being illegal is prayed to be quashed. The provision of section 154 reads as under. With a view to rectifying any mistake apparent from the record an income tax authority referred to in section 116 may the assessment order in the case of the assessee was passed on 30.06.3019 accepting....
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....ourse of survey proceedings. For the sake of clarity, the said para 4 of the order of assessment is extracted hereunder: "04. During the course of survey u/s 133A conducted in assessee's premises on 26.03.2012, assessee has voluntarily declared an additional income of Rs. 16,61,954/-. While filing the return of income for the assessment year in question assessee has shown Rs. 16,61,954/- in his return In view of the factual and legal matrix of the case on hand, as discussed above, and respectfully following the principles laid down by the Hon'ble Apex Court in the case of T. S. Balaram, ITO Vs. Volkart Brothers 82 ITR 50 (SC) (1971) ( Copy enclosed as per Annexure 6 Page No 63 to 66), we are of the considered opinion that the rectification carried out by the AO vide order dated 17.03.2016 in the case on hand does not fall within the scope on ambit of mistake apparent from record. We, therefore, hold that the exercise undertaken by the AO is not in accordance with law, since the issue in question being a debatable one, with conflicting opinions of two AO's, the second AO could not to have resorted to proceedings u/s 154 of the Act and consequently set a....
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....ed, the legislation to take immediate effect, i.e., as soon the assent of the Hon'ble President of India is received, by signing the same. The words "at once" convey an urgency, so that the same represents the earliest point of time at which the same is to take effect, i.e., 15/12/2016 itself, and which also explains the same being enacted during the course of the fiscal year, tax rates for which stand already clarified at the beginning of the year per the relevant Finance Act (FA, 2016). The said words "at once" would loose significance if the provisions of the Act are to, as stated by the ld. CIT(A), be read as effective 01/04/2017, implying AY 2018-19. The same, for substantive amendments, as in the instant case, represents the first day of the assessment year, i.e., AY 2017-18, which explains the assessee's grievance of it being thus effective for fy 2016-17 or, w.e.f. 01/4/2016. Enacting it mid-year and, further, making it applicable "at once", becomes meaningless if the same is to take effect retrospectively, or is made effective from a later date (01/4/2017), which could in that case be by Finance Act, 2017. True, the amendment, where so read, does gives rise to a peculi....