The Income Tax Appellate Tribunal (ITAT) Delhi bench held that additional income surrendered during the course of survey proceedings should not be taxed at 60% under Section 115BBE of the Income Tax Act, 1961. Therefore the bench quashed the revision order.
Assessee surrendered additional income of Rs. 30,00,000/- during the course of survey proceedings. Thereafter the case was taken up for scrutiny and the assessment was framed under Section 143(3) of the Income Tax Act .Thereby the Assessing Officer assessed income at Rs. 35,25,470/-.
Thereafter the Pr.CIT issued notice under Section 263 of the Income Tax Act. The basis for issuance of notice u/s 263 of the Act was that the tax was required to be paid on the surrendered income @ 60% under Section 115BBE of the Income Tax Act.
In response to the notice, the assessee filed his reply Pr. CIT did not accept the explanation offered by the assessee and treated the assessment order as erroneous insofar as prejudicial to the interests of the Revenue.
Aggrieved against therevision order, the assessee filed an appeal before the tribunal.
During the proceedings, tribunal observed that Pr. CIT did not specify a specific provision under which the AO should have treated the surrendered amount. The voluntary surrender was not subject to any penal action under any direct tax laws.
Further, it was observed that Pr.CIT has stated that the AO should have considered the surrendered income as income under Sections 68/69/69A/69B/69C of the Income Tax Act.
Therefore, in the absence of clear finding by the Pr CIT as to under which provision of law the amount was required to be taxed so as to attract the provisions of Section 115BBE of Income Tax Act by mentioning the multiple provisions does not serve the purpose of law.
After considering the facts submitted by both parties, the two member bench of M. Balaganesh (Accountant Member) and Kul Bharat (Judicial Member) quashed the revision order passed by the Pr.CIT.
Dr. Rakesh Gupta, Appeared for the assessee and Manvendra Goel, appeared for revenue.
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