ISHWAR CHAND WADHWA,GURUGRAM vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 4(1), GURUGRAM

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ITA 881/DEL/2026Status: DisposedITAT Delhi19 August 2026AY 2017-183 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the enhanced tax rate of 60% under Section 115BBE of the Income Tax Act is applicable only from Assessment Year 2018-19 onwards, not for earlier assessment years like 2017-18. Therefore, the admitted income should be taxed at normal rates.

What were the facts?

The assessee's undisclosed income of Rs. 2,25,00,000 was subjected to tax at a higher rate of 60% by the Assessing Officer. The assessee appealed this decision.

What were the issues?

Whether the enhanced tax rate of 60% under Section 115BBE is applicable to undisclosed income for Assessment Year 2017-18.

Which sections of the Income-tax Act were involved?

Section 115BBE,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “A”: NEW DELHI

Before: SHRI M. BALAGANESH & MS. KAVITHA RAJAGOPAL

Hearing: 26.05.2026Pronounced: 19.08.2026

PER M. BALAGANESH, A. M.:

This appeal of the assessee arises out of the order passed by the Commissioner of Income Tax (Appeals)-3, Gurgaon [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. 881/Del/2026 for A.Y. 2017-18 dated 26.12.2025 which in turn arises out of the order passed by the Assessing Officer, ACIT, Circle-4(1), Gurgaon (hereinafter referred to as ‘ld. AO’) passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 18.12.2019.

2.

The only issue to be decided in this appeal is as to whether the admitted undisclosed income of Rs 2,25,00,000 could be subjected to tax at a higher

ITA No. 881/Del/2026 Ishwar Chand Wadhwa tax rate of 60% in accordance with section 115BBE of the Act in the facts and circumstances of the instant case. 3. We have heard the rival submissions and perused the materials available on record. In our considered opinion, the enhanced rate of tax @ 60% as per the provisions of section 115BBE of the Act cannot be made applicable for assessment up to assessment year 2017-18 and the same could be made applicable only from assessment year 2018-19 onwards. Reliance in this regard is placed on the decision of Hon’ble Madras High Court in the case of SMILE Microfinance Limited vs ACIT in WP (MD) No. 2078 of 2020 and WMP (MD) No. 1742 of 2020 dated 19- 11-2024 wherein it was held that the provisions of section 115BBE of the Act which enhanced the rate of tax to 60% could be made applicable only from 01.04.2017, relevant to assessment year 2018-19 onwards and not earlier. Respectively following the same, we hold that the income surrendered during survey and the assessment made thereon could be subjected to tax only at the normal rates and not at the enhanced rate of tax of 60% as per section 115BBE of the Act. Accordingly, the grounds raised by the assessee are allowed. 4. In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 19/08/2026

Sd/- Sd/- (KAVITHA RAJAGOPAL) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 19/08/2026 *G.P. Sr. PS* Copy forwarded to 1. Applicant 2. Respondent 3. CIT Page | 2

ITA No. 881/Del/2026 Ishwar Chand Wadhwa 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi

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