The Income Tax Appellate Tribunal (ITAT), Chandigarh validated the revision order as there was a failure of the Assessing Officer (AO) in applying the rate of tax as per the amended law. The assessee in the present is M/s Agya Ram Manohar Lal.
A search and seizure operations were carried out in the case of M/s Roop Square Group at its various business and residential premises including that of the assessee and thereafter, in pursuance to notice u/s 153A, the assessee firm filed its return of income declaring the total income of Rs. 7 lakhs thereafter the assessment was completed under section 153A.
An addition of Rs. 1 crore thirty-six thousand as normal business income and Rs. 42 lakhs under section 69C of the Income Tax Act and Rs. 12 lakhs under section 69 of the Income Tax Act.
Subsequently, the assessment records were called for and examined by the PCIT(C) and it was observed that the tax was calculated at the normal rate on the whole of the assessed income whereas on the additions made under section 69C as well as under section 69, the tax has to be calculated under section 115BBE of the Act.
The case of the assessee was that the Assessing officer was consciously clear that since the additions were made u/s 69C, the tax will be charged u/s 115BBE and after applying his mind and knowing the fact that tax has to be calculated by applying the provisions of section 115BBE, the Assessing officer applied tax rate at the rate of 30%.
A Bench consisting of Diva Singh, Judicial Member and Vikram Singh Yadav, Accountant Member observed that “We therefore didn’t find any justifiable basis to interfere with the order of the PCIT who has rightly exercise his revisional jurisdiction u/s 263 by setting aside the order of the AO to the extent of applyingthe rate of tax as per amended Section 115BBE for the impugned assessment year on the quantum of additions made and sustained u/s 69C of the Act.”
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