NEELAM GUPTA,JIND vs. DCIT, BHIWANI

The only effective issue involved in this appeal is as to whether the Learned CITA was justified in confirming the action of the Learned AO in applying enhanced tax rate of 60% under section 115BBE of the Act in respect of amount surrendered during the survey action in the sum of Rs 45,00,500 in the facts and circumstances of the instant case.

We have heard the rival submissions and perused the materials available on record. It is not in dispute that pursuant to survey, a sum of Rs 45,00,500 stood offered by the assessee and tax at normal rates was paid by the assessee by treating the additional offer as business income. The Learned AO sought to apply the enhanced rate of tax @ 60% under section 115BBE of the Act for the said surrendered income. This action of the Learned AO was upheld by the Learned CITA. We find that the Hon’ble Madras High Court in the case of of SMILE Microfinance Limited vs ACIT in WP (MD) No. 2078 of 2020 and WMP (MD) No. 1742 of 2020 dated 19-11-2024 had held that the provisions of section 115BBE of the Act which enhanced the rate of tax could be made applicable only from 01.04.2017, relevant to assessment year 2018-19 onwards and not earlier. Hence we direct the Learned AO to tax the surrendered sum of Rs 45,00,500 at normal rates and not at the rates prescribed under section 115BBE of the Act. Accordingly, grounds raised by the assessee are allowed.

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