RANJANA SEN,KOLKATA vs. D.C.I.T., CC-4(1),, KOLKATA

PDF · subscribers
ITA 2535/KOL/2025Status: DisposedITAT Kolkata06 July 2026AY 2017-20187 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the enhanced tax rate under Section 115BBE was applicable only to transactions carried out on or after April 1, 2017, and not for Assessment Year 2017-18. Therefore, the pre-amended rate of 30% should be applied.

What were the facts?

The assessee's appeal was filed with a delay, which was condoned. In the second appeal, the Assessing Officer applied Section 115BBE at a higher rate to undisclosed income disclosed during a search, which was upheld by the CIT(A). The assessee contested this, arguing the higher rate was not applicable to the assessment year.

What were the issues?

Whether the enhanced tax rate under Section 115BBE is applicable to the Assessment Year 2017-18 for transactions prior to April 1, 2017. Whether a Section 154 rectification can be used to apply a higher tax rate when the issue was considered during the original assessment.

Which sections of the Income-tax Act were involved?

Section 115BBE,Section 154,Section 132(4),Section 143(3),Section 139,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA

Before: SHRI RAJESH KUMAR & SHRI PRADIP KUMAR CHOUBEY

For Appellant: Shri Miraj D. Shah, Advocate
For Respondent: Shri Dheeraj, Sr. DR
Hearing: 15.06.2026Pronounced: 06.07.2026

sIN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘D’ BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER I.T.A. Nos.2535 & 2536/KOL/2025 (Assessment Year: 2017-18) Ranjana Sen, DCIT, 53A Lake Avenue, Sarat Bose Road, Vs. Circle – 4(1), Kolkata – 700029, West Bengal Kolkata [PAN: AKOPS6726P] (Appellant) .. (Respondent) Appellant by : Shri Miraj D. Shah, Advocate Respondent by: Shri Dheeraj, Sr. DR Date of Hearing 15.06.2026 Date of Pronouncement 06.07.2026

O R D E R PER PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER:

These two appeals filed by the assessee are directed against the separate orders dated 02.07.2025 and 05.07.2025 of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “ld. CIT(A)”) passed u/s 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment years (A.Y.) 2017–18.

2.

The appeal in ITA No.2535/Kol/2025 (A.Y. 2017-18) has been filed by the assessee with a delay of 37 days. The assessee has filed a petition for condonation of the delay. After considering the petition for condonation of delay, we find that delay was neither deliberate nor intentional but occurred solely due to bona fide reasons. The assessee could not able to file the appeal

ITA Nos.2536 & 2536/Kol/2025/AY 2017-18 Ranjana Sen vs. DCIT timely before us and we note that the reasons cited are valid and beyond the control of the assessee. Consequently, the delay in filing the appeal is hereby condoned and we proceed to dispose of the appeal on merits.

ITA No.2535/Kol/2025 (A.Y. 2017-18):

3.

In the course of argument, the learned Authorized Representative (ld. AR) has withdrawn the appeal, accordingly, this appeal is hereby dismissed as ‘withdrawn’.

4.

In the result, the appeal of the assessee is dismissed.

ITA No.2536/Kol/2025 (A.Y. 2017-18):

5.

The brief facts of the case are that the assessee is an individual and is a director of M/s Senco Gold Limited and other group companies. The Assessee was searched u/s 132(1) of the Act on 20/12/2016 and accordingly the return of income for A.Y. 2017-18 was taken up for assessment in terms of Section 143(3) of the Act. The Assessee has filed its return u/s 139 of the Act for A.Y. 2017-18, declaring a total income of Rs.2,86,06,430/- on 19/02/2018, which included a discloser of Rs.2,00,00,000 made u/s 132(4) of the Act. The assessee was assessed u/s 143(3) of the Act, by an order dated 31/12/2018 wherein the Assessing Officer (In short, ‘the AO’) held that the undisclosed income of Rs.2,00,00,000, so disclosed in the disclosure petition u/s 132(4) of the Act, was incorporated in the return of income for the A.Y. 2017-18. Further, the disclosure made by the assessee is taken as income for the A.Y. 2017-18 on protective basis and the same amount is added to the total income of M/s Senco Gold Ltd. for A.Y. 2017-18 on substantive basis. It is evident that the addition of Rs.2,00,00,000 was made merely protective basis on the hands of the assessee. The assessee has already filed an appeal against the same before 2

ITA Nos.2536 & 2536/Kol/2025/AY 2017-18 Ranjana Sen vs. DCIT the ld. CIT(A)-20, Kolkata on 27/01/2019 which is pending for hearing as on date. In the original assessment proceeding the then AO raised the issue of applicability of section 115BBE of the Act to the case of the assessee and the assessee filed a reply before the AO. The AO after considering the reply passed the Assessment order without applying the provision of section 115BBE of the Act. Subsequently notice u/s 154 of the Act, dated 22/03/2021 and a revised notice dated 15/08/2021 was issued to the assessee stating that there was mistake in calculation of tax and the AO proposed to impose tax rate as prescribed u/s 115BBE of the Act. The AR has contested by saying that as the issue of charging tax u/s 115BBE of the Act, was taken up and considered in the assessment proceeding thus this issue could not have been rectified u/s 154 of the Act. Accordingly, the assessee requested the AO to drop the proceedings u/s 115BBE of the Act. The AO, however, did not agree with the submission of the assessee and he imposed higher tax rate u/s 115BBE of the Act on the issue of Rs.2,00,00,000/- and accordingly recalculated the tax at higher rate of tax.

6.

Aggrieved by the said order, assessee preferred appeal before the ld. CIT(A), wherein the appeal of the assessee has been dismissed.

7.

Being aggrieved, dissatisfied, the assessee preferred appeal before us. The ld. AR in course of argument has challenged the impugned order by placing the order passed by the Madras High Court followed by the ITAT, Ranchi Bench in cases of Dr. Satish Kumar Midha vs. PCIT, in ITA No.19/Ran/2022 and Midha’s Healthcare Pvt. Ltd. vs. PCIT, in ITA No. 20/Ran/2022, dated 21.08.2025 and submitted that Hon'ble Madras High Court after an elaborate consideration of the taxation laws categorically held that revenue is empower to levy tax at enhanced rate of 60% only in respect of transaction carried out

ITA Nos.2536 & 2536/Kol/2025/AY 2017-18 Ranjana Sen vs. DCIT on or after 01.04.2017. The ld. AR submits that present case relates to the A.Y. 2017-18, hence, empower to levy tax at enhanced rate of 60% is not applicable for the A.Y. 2017-18 under appeal. The ld. AR placed the judgement passed by the ITAT, Ranchi reported in 2026 (1) TMI 63 – (ITAT Ranchi).

8.

Contrary to that learned Senior Departmental Representative (ld. Sr. DR) controverted the submission by submitting that this issue is considered by the Kerala High Court in case of Maruthi Babu Rao Jadav vs. ACIT, WA No.984 of 2019, dated 23.09.2020, wherein it has been held that enhanced rate of tax introduced by the taxation laws w.e.f. 01.04.2017 would apply to the A.Y. 2017-18 also.

9.

Upon hearing the submission of the ld. AR of the representative parties, we find that the sole issue is to be consideration that whether the revenue is empowered to levy enhanced rate of tax in respect of transactions carried out on or after 01.04.2017 or it would apply to the A.Y. 2017-18 also. It is a fact that the present case relates to the A.Y. 2017-18 and order u/s 154 of the Act has been passed with a direction to provisions of higher rate of interest u/s 115BBE of the Act be imposed on the issue of Rs.20,00,000/- and calculated the same at higher rate of tax.

10.

We have gone through the order passed by the ITAT, Ranchi (supra) in which the Tribunal has followed the decision of Madras High Court and order passed by the Ranchi Bench is hereinbelow:

“3. In this case, the appeals have been filed on 6.5.2022. The appeals have been posted on multiple occasions nearly 21 times. None appeared on behalf of the assessee. The notice had also been sent through Regd. post, email and also served through Department. Still, the assessee have not represented in these cases. However, the assessee has filed written submissions, which read as follows:

ITA Nos.2536 & 2536/Kol/2025/AY 2017-18 Ranjana Sen vs. DCIT ………………………. ………………………. 4. Ld CIT DR has vehemently supported the order of the Pr. CIT. The facts in the present case show that there was a survey on the premises of the assessee on 14.9.2016. In the course of survey, the assessee has accepted undisclosed income. The Assessing Officer while completing the assessment has not applied the provisions of section 115BBE, which was brought into the Act w.e.f. 1.4.2017. A perusal of the facts in the present case further shows that the Pr. CIT himself recognizes that the provisions of section 115BBE was amended by the Gazette Notification No.57 dated 15.12.2016 and the amendment was effective from 1.4.2017. However, Pr. CIT has taken the stand that the amendment would apply to the assessment year 2017-18. When an amendment is made effective from 1st April of a particular year that relates to the said accounting year. The assessment year in this case would be next year. Thus, the assessment year would be for an amendment which has taken effect from 1.4.2017 will be assessment year 2018-19. Ld Pr. CIT has also referred to the decision of the Hon’ble Supreme Court in the case of Reliance Jute Industries, 120 ITR 912 (SC), wherein, the Hon’ble Supreme Court has held that the law as on the beginning of the year is the law that has to be applied for the assessment year. The survey in the impugned case appeals took place on 14.9.2016, the Gazette Notification in respect of Section 115 BBE was on 15.12.2016. The effective date for the amendment was 1.4.2017 that is after end of the financial year 31.3.2017, the survey has taken place during the financial year 1.4.2016 to 31.3.2017, relevant to assessment year 2017- 18. The amendment has taken place w.e.f. 1.4.2017. This amendment would be applicable to assessment year 2018-19. As the amended provisions of section 115 BBE does not apply to the impugned assessment year, we are of the view that the provisions of section 115 BBE cannot be made applicable in the case of the assesses for the impugned assessment year 2017-18. This view of our finds the support from the judgment of Hon’ble Madras High Court in the case of Smile Microfinance Ltd., in W.P.(MD) No.2078/2020 order dated 19.11.2024, wherein, the Hon’ble High Court has held as under:- “16. The next contention raised by the Learned Senior Counsel is that the under section 115BBE the rate of tax imposed is increased from 30% to 60% and the same is applicable with effect from 01.04.2017 onwards as per the amendment. Therefore, the same is applicable to any transaction from 01.04.2017 onwards and nor prior to any transactions prior to 01.04.2017. Since in the present case all alleged transactions are for the period from 08.11.2016 to 30.12.2016, hence the erstwhile rate of tax 30% only is applicable. But the contention of the revenue is that the amendment was with effect from 01.04.2017 and hence the same is applicable for the financial year 2016-2017 and the assessment year 2017-2018. Further the amendment to section

ITA Nos.2536 & 2536/Kol/2025/AY 2017-18 Ranjana Sen vs. DCIT 115BBE is directly related to demonetization which would be evident from objects and reasons for such amendment. In order to consider the same, the objects and reasons of Taxation Laws (Second Amendment) Bill 2016 is extracted hereunder: ………….. ………….. 17. In the aforesaid objects and reasons nowhere it is stated that due to “demonetization” the unaccounted money ought to be charged 60% rate of tax. It only states that step had been taken to curb black money by withdrawing Specified Bank Notes of denomination of Rs.500 and Rs.1000. And also states the people may find illegal ways of converting their black money into black again, hence as per experts advice heavy penalty ought to be levied. From the language of the object “that instead of allowing people to find illegal ways of converting their black money into black again”, it is evident that the government is intended to impose the same for future transactions. Especially the use of word “again” in the object would clearly indicate it is for future transactions i.e. from 01.04.2017. Therefore this Court is of the considered opinion that the revenue is empowered to impose 60% rate of tax for the transactions from 01.04.2017 onwards and not prior to the said cut-off date. And for prior transaction the revenue is empowered to impose only 30% rate of tax.” This being so, we are of the view that the orders of Pr. CIT, Ranchi are unsustainable and consequently, we quash the same. 5. In the result, appeals of the assessee stand allowed.” 11. There is no denying fact that there is no decision of the jurisdictional High Court on this issue. In such circumstances, Hon'ble Apex Court in case of CIT vs. Vegetable Products Ltd. (1973) 88 ITR 192 (SC) held that where a taxing provision is capable of more than one interpretation, the interpretation favourable to the assessee must be adopted. Similar principle has been reiterated by the Hon'ble Bombay High Court in case of K. Subramanian & Ors. vs. Anr. (1985) 156 ITR 1 (Bom.) wherein inter alia observed as under:

“Where there is a conflict between decisions of different High Courts, and there is no decision of the jurisdictional High Court, the authority must adopt the view which is favourable to the assessee and not against him.” 6

ITA Nos.2536 & 2536/Kol/2025/AY 2017-18 Ranjana Sen vs. DCIT 12. Keeping in view, the facts of the case and considering the judgement passed by the High Court by ITAT, Ranchi. We find substance in the argument of the ld. AR and accordingly, the AO directed to compute the tax liability on the issue of Rs.20,00,000/- by applying rate of 30% as provided under pre- amended provisions of section 15BBE of the Act and not at the enhanced rate of 60%. Accordingly, the appeal of the assessee is allowed. The AO is directed to compute by applying the rate of 30% as provided under the pre-amended provisions.

13.

In the result, the appeal of the assessee is allowed.

The orders are pronounced in the open Court on 06/07/2026.

Sd/- Sd/- (Rajesh Kumar) (Pradip Kumar Choubey) ACCOUNTANT MEMBER JUDICIAL MEMBER Kolkata, Dated: 06/07/2026 SAMANTA आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to: 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण,/ DR, ITAT, Kolkata 6. गाड� फाईल / Guard file

// TRUE COPY // BY ORDER,

Asstt. Registrar, ITAT, Kolkata

More judgments on Section 115BBE

All 8,662 judgments and leading authorities on Section 115BBE →

Recent GST High Court judgments

Search GST case law →