ANKIT VIJAYWARGIYA,HYDERABAD vs. ITO., WARD-12(5), HYDERABAD

PER MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER:

This appeal is filed by Shri Ankit Vijaywargiya (“the assessee”), feeling aggrieved by the order passed by the Learned Addl/JCIT(A), Ranchi, (“Ld. Addl/JCIT(A)”) dated 09.07.2024 for the A.Y. 2017-18.

1) Ground 1. That the Ld. CIT(A) erred in upholding the Ld. AO’s arbitrary restriction of the assessee’s opening cash balance as on 01.04.2016 amounting ₹11,71,647 to ₹7,50,000, leading to an erroneous addition of ₹3,85,090 U/s 69A, and ignoring the assessee’s voluntary offered ₹63,442 being the difference as income during the course of assessment proceedings.

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2) Ground 2. That the Ld. CIT(A) erred in upholding the Ld. AO’s arbitrary restriction of the assessee’s opening cash balance from ₹11,71,647 to ₹7,50,000, without appreciating that the Ld. AO accepted the opening balance in principle but provided no reasons for rejecting the remaining portion, leading to an erroneous addition of ₹3,85,090 U/s 69A. 3) Ground 3. That the Ld. CIT(A) erred in failing to appreciate that the assessee, as a prudent individual, maintained an opening cash balance of ₹11,71,647 from disclosed income accumulated over prior years out of regular income from salary and other sources. 4) Ground 4. That the Ld. CIT(A) erred in dismissing the appeal without adjudicating on the merits of the grounds raised in Form No. 35. The Ld. CIT(A) failed to appreciate that the assessee had provided comprehensive submissions and evidence during the assessment proceedings, warranting a reasoned decision rather than a summary dismissal. 5) Ground 5. That the Ld. CIT(A) erred in upholding the addition of ₹3,21,648 made by the Ld. AO as unexplained money U/s 69A, without appreciating that the assessee had furnished detailed source & explanations including documentary evidences during the course of assessment proceedings which has been duly accepted by the Ld. AO. 6) Ground 6. That the Ld. CIT(A) erred in upholding the Ld. AO’s application of section 115BBE to tax the alleged unexplained income of ₹3,85,090 at 60%, failing to appreciate the assessee’s voluntary disclosure of ₹63,442 as income, demonstrating bonafide compliance, and that the assessee’s income was primarily from salary and other disclosed sources, with cash deposits of ₹18,08,000 fully explained by legitimate sources, including opening cash balance, bank withdrawals, recoveries, and PMGKY declarations. 7) Ground 7. That the Ld. CIT(A) ought to have deleted the addition of ₹3,85,090, as the same is arbitrary, excessive, and not supported by any cogent material OR evidence. The Ld. AO’s failure to provide specific reasons for rejecting the assessee’s documented explanations renders the addition contrary to law.

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8) Ground 8. That the Ld. CIT(A) erred in not addressing the AO’s premature initiation of penalty proceedings U/s 271AAC, despite the addition of ₹3,85,090 being based on an erroneous and unsubstantiated assessment. 9) Ground 9. That the assessee craves leave to add, alter, amend, OR withdraw any of the above grounds of appeal at OR before the time of hearing, as may be necessary to meet the ends of justice. 3. The brief facts of the case are that the assessee is an individual who filed his

return of income for Assessment Year 2017-18 on 13.02.2018 declaring total income of ₹2,56,360/-. The case of the assessee was selected for Limited Scrutiny through

CASS and accordingly notice under section 143(2) of the Income-tax Act, 1961

(“the Act”) dated 09.08.2018 was issued by the Learned Assessing Officer (“Ld.

AO”). During the course of assessment proceedings, the Ld. AO noticed certain cash

deposits and, not being satisfied with the explanation furnished by the assessee, made an addition of ₹3,85,090/- under section 69A of the Act. The Ld. AO further

subjected the said addition to tax at the rate prescribed under section 115BBE of the

Act and completed the assessment under section 143(3) of the Act vide order dated 24.12.2019 determining the total income of the assessee at ₹6,41,450/-.

the Ld. Addl/JCIT(A). The Ld. Addl/JCIT(A) upheld the action of the AO and

dismissed the appeal of the assessee.

:: 4 :: ITA No.1150/Hyd/2025 Ankit Vijaywargiya 5. Aggrieved by the order of the Ld. Addl/JCIT(A), the assessee is in appeal

before the Tribunal. At the time of hearing, the Ld. AR submitted that though various grounds have been raised in the memorandum of appeal, the assessee is pressing

only the ground relating to the applicability of tax rate under section 115BBE of the

Act. The Ld. AR submitted that the Ld. AO has erred in applying the enhanced rate

of tax of 60% under section 115BBE of the Act on the addition made under section 69A of the Act. It was contended that for Assessment Year 2017-18, the rate of tax

applicable under section 115BBE is only 30% and not 60%. The Ld. AR further

submitted that an identical issue has already been decided by this Tribunal in the

case of Nidesh Jain Vs. ACIT, ITA No.1621/Hyd/2025 for Assessment Year 2017- 18 vide order dated 24.12.2025. It was submitted that the Tribunal, after considering

the decision of the Hon’ble Madras High Court in the case of S.M. I. L. E

Microfinance Ltd. Vs. ACIT W.P. (MD) No.2078 of 2020 and W.M.P. (MD)

No.1742 of 2020 dated 19th November 2024, held that the amendment enhancing

the tax rate from 30% to 60% under section 115BBE would apply only prospectively

and that for Assessment Year 2017-18 the applicable rate remains 30%.

Accordingly, it was prayed that the Ld. AO be directed to apply the tax rate of 30% under section 115BBE of the Act.

of the lower authorities and submitted that the Ld. AO has correctly applied the

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provisions of section 115BBE of the Act. He therefore supported the orders of the

Ld. AO as well as the Ld. Addl/JCIT(A).

record including the case law relied upon. The solitary issue arising for our consideration is whether the addition of ₹3,85,090/- made under section 69A of the

Act is liable to be taxed under section 115BBE at the rate of 30% or at the enhanced

rate of 60%. We find that an identical issue came up for consideration before this

Tribunal in the case of Nidesh Jain Vs. ACIT (supra), wherein this Tribunal at para

nos.14 and 15 has head as under:

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Evasion of taxes deprives the nation of critical resources which could enable the Government to undertake anti-poverty and development programmes. It also puts a disproportionate burden on the honest taxpayers who have to bear the brunt of higher taxes to make up for the revenue leakage. As a step forward to curb black money, bank notes of existing series of denomination of the value of Rs.500 and Rs. 1000 [Specified Bank Notes (SBN)] have been recently withdrawn the Reserve Bank of India. Concerns have been raised that some of the existing provisions of the Incometax Act, 1961 (the Act) can possibly be used for concealing black money. The Taxation Laws (Second Amendment) Bill, 2016 ('the Bill') has been introduced in the Parliament to amend the provisions of the Act to ensure that defaulting assessees are subjected to tax at a higher rate and stringent penalty provision. Further, in the wake of declaring specified bank notes "as not legal tender", there have been suggestions from experts that instead of allowing people to find illegal ways of converting their black money into black again, the Government should give them an opportunity to pay taxes with heavy penalty and allow them to come clean so that not only the Government gets additional revenue for undertaking activities for the welfare of the poor but also the remaining part of the declared income legitimately comes into the formal economy. In this backdrop, an alternative Scheme namely, Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016' (PMGKY) has been proposed in the Bill. The declarant under this regime shall be required to pay tax @ 30% of the undisclosed income, and penalty @10% of the undisclosed income. Further, a surcharge to be called 'Pradhan Mantri Garib Kalyan Cess' @33% of tax is also proposed to be levied. In addition to tax, surcharge and penalty (totaling to approximately 50%), the declarant shall have to deposit 25% of undisclosed income in a Deposit Scheme to be notified by the RBI under the 'Pradhan Mantri Garib Kalyan Deposit Scheme, 2016'. This amount is proposed to be utilised for the schemes of irrigation, housing, toilets, infrastructure, primary education, primary health, livelihood, etc., so that there is justice and equality. An overview of the amendments proposed in the Bill are placed below:

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provisions of section 115BBE of the Act and the decision of the Hon’ble Madras

High Court in the case of S.M. I. L. E Microfinance Ltd. vs. ACIT (supra), held that

the amendment enhancing the tax rate under section 115BBE of the Act from 30%

to 60% cannot be applied to transactions prior to 01.04.2017 and that for Assessment

Year 2017-18 the applicable rate of tax under section 115BBE remains 30%. The

relevant observations of the Tribunal in the said decision have not been controverted

by the Revenue by bringing any contrary decision of any higher judicial forum to

our notice. Respectfully following the decision of this Tribunal in the case of Nidesh

Jain Vs. ACIT (supra), we hold that the addition made under section 69A of the Act

is liable to be taxed under section 115BBE at the rate of 30% and not at the enhanced

rate of 60%. Accordingly, we direct the Ld. AO to recompute the tax liability of the

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assessee by applying the rate of 30% under section 115BBE of the Act on the

addition made under section 69A.

treated as not pressed and are dismissed accordingly.

Order pronounced in the open court on 24th July, 2026.

Sd/- Sd/- RAVISH SOOD MADHUSUDAN SAWDIA JUDICIAL MEMBER ACCOUNTANT MEMBER

Hyderabad Dated: 24th July, 2026 TLN Copy to: 1 ANKIT VIJAYWARGIYA, 8-2-283/82/276-A, PLOT NO. 76, ROAD NO. 12, MLA COLONY, BANJARA HILLS, HYDERABAD-500034, TELANGANA 2 ITO., WARD-12(5), O/O ITO., WARD-12(5), HYDERABAD-, TELANGANA 3 THE PCIT / CIT, HYDERABAD 4 THE D.R., ITAT, HYDERABAD BENCH 5 GUARD FILE