SANTOSH KUMAR MIGLANI ,PATIALA vs. ASSTT COMMISSIONER OF INCOME TAX, CIRCLE, PATIALA , PATIALA

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ITA 973/CHANDI/2026Status: DisposedITAT Chandigarh14 July 2026AY 2017-183 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the higher rate of tax under Section 115BBE applies from FY 2017-18 onwards, following a Rajasthan High Court decision. Therefore, the regular rate of tax should be applied to the assessed income for AY 2017-18.

What were the facts?

The assessee's income was assessed with an addition of Rs. 40 Lacs, on which a higher rate of 60% under Section 115BBE was applied. The CIT(A) upheld this assessment, leading to the present appeal.

What were the issues?

The key issue was whether the enhanced rate of tax under Section 115BBE, introduced by an amendment, was applicable to the assessment year in question or if the regular rate should apply.

Which sections of the Income-tax Act were involved?

Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, CHANDIGARH

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, CHANDIGARH VIRTUAL HEARING HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No.973/CHANDI/2026 (िनधा�रण वष� / Assessment Year: 2017-18) Shri Santosh Kumar Miglani ACIT Circle C/o Sh. Tejmohan Singh (Advocate) Patiala Punjab – 147001 बनाम/ Vs. #527, Sector – 10D Chandigarh – 160011 �ायीलेखासं./जीआइआरसं./PAN/GIR No. AKBPK-8999-F (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Sh. Tejmohan Singh (Advocate) – Ld. AR ��थ�कीओरसे/Respondent by : Dr. Ranjit Kaur (Addl. CIT) - Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 09-07-2026 घोषणाकीतारीख /Date of Pronouncement 14-07-2026 : आदेश / O R D E R 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017- 18 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 11.02.2026 in the matter of an assessment framed by Ld. AO u/s 143(3) 12.12.2019 wherein Ld. AO made survey addition of Rs.40 Lacs and applied higher rate of 60% u/s 115BBE on such additions. The Ld. CIT(A) endorsed the assessment against which the assessee is in further appeal before Tribunal. The only plea of Ld. AR is application of normal rate of tax which has been opposed by Ld. Sr. DR.

2.

I find that this issue is covered in assessee’s favor by the recent decision of Hon’ble Rajasthan High Court in the case Deepak Maratha (CWP No.3625/2020 dated 27.05.2026). The Hon’ble Court held as under: - 17. SUMMARY/CONCLUSION As an upshot of the discussion and analysis, as above, in our opinion, the Correct Legal Position which emerges is summarized as below :- (i) The law applicable to an assessment year is the law in force on the first day of that year — i.e., 01st April. A provision coming into force after that date, without express retrospective language, cannot be applied to assessments for that year. (ii) Changes in law occurring after the commencement of a financial year cannot govern the tax liability for that year unless the amendment is expressly made retrospective. (iii) The amendment to Section 115BBE came into force on 01.04.2017 i.e. the first day of financial year 2017-18. For FY 2016-17, the law in force on 01.04.2016, prescribing a rate of 30%, must govern. The enhanced rate of tax @60% came into force on 01.04.2017 and can apply only from that date, i.e. for financial year 2017-18 onwards. (iv) The Taxation Laws (Second Amendment) Act, 2016 contains no express language for it’s retrospective effect of section 115BBE. 18. We thus hold that the Taxation Laws (Second Amendment) Act, 2016 is prospective in effect as specified therein (from 15.12.2016 except the amendment of Section 115BBE, which is effective from 01.04.2017). The question framed in para 8.1, in the preceding part, is answered accordingly. 19. The appellate authority shall therefore proceed further to adjudicate the assessment order impugned before it keeping in mind what has been enunciated hereinabove, in accordance with law. 20. The petition stands disposed of in the aforesaid terms

The Hon’ble Court held that higher rate of tax as prescribed u/s 115BBE would apply from FY 2017-18 onwards i.e. from AY 2018-19 only. Respectfully following the same, I direct Ld. AO to apply regular rate of tax on the assessed income. No other ground has been urged in the appeal.

3.

The appeal stand partly allowed. Order pronounced on 14th July, 2026.

-Sd- (MANOJ KUMAR AGGARWAL) ACCOUNTANT MEMBER AS Dated: 14/07/2026 आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

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