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Facts
During a survey, Rs. 9,75,000/- cash was found at the assessee's business premises. The assessee initially offered this as "any other income" but stated it was business income. The Assessing Officer treated this as income taxable at a special rate under Section 115BBE.
Held
The Tribunal held that since the cash was found at the business premises and the assessee consistently stated it was business income, it should not be taxed at a special rate merely because it was initially offered under a different head.
Key Issues
Whether cash found at business premises, declared as business income by the assessee, can be taxed at a special rate when it was inadvertently offered under the head 'any other income' in the return?
Sections Cited
154, 143(1), 139(4), 133A, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCHES,”A-Bench” JAIPUR
Before: SHRI GAGAN GOYAL, AM & SHRI NARINDER KUMAR, JM
fu/kZkj.ko"kZ@Assessment Year : 2020-21 Soni Varshney cuke The ITO, Vs. D-13, Near Thakkar Nursing Home Ward-2(2), Kota. Shrinath Puram, Kota. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: ACKPV2766L vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assessee by : Shri Vinod Kumar Gupta, C.A. jktLo dh vksjls@Revenue by: Mrs. Anita Rinesh, JCIT-DR lquokbZ dh rkjh[k@Date of Hearing : 08/05/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 13/05/2025 vkns'k@ORDER PER: NARINDER KUMAR, JUDICIAL MEMBER .
Present appeal pertains to the assessment year 2020-21. Appellant- assessee is feeling aggrieved by order dated 27.11.2024, passed by Learned CIT(A), National Faceless Appeal Centre, Delhi ( hereinafter referred to as “the NFAC”), whereby the appeal preferred by the assessee challenging order dated 26.02.2024 i.e. rectification order by the Assessing Officer, passed u/s 154 r.w.s. 143(1) of the Income Tax Act (hereinafter referred to “the Act”) came to be dismissed.
Soni Varshney, Kota.
Arguments heard. File perused.
Admitted case of the parties is that on 30.03.2021, assessee- appellant filed return of income u/s 139(4) of the Act, declaring total income for the assessment year 2020-21, as Rs. 52.79.150/-. Said return was processed” u/s 143(1) of the Act. Department observed that the tax was to be charged from the assessee at special rate i.e. @ 60% plus surcharge @ 25% on unexplained income of Rs. 9,75,000/- surrendered by the assessee during survey proceedings conducted on 24 & 25.01.2020, u/s 133A of the Act at his business premises M/s Varshney Children Hospital & research Centre, Kota.
Department found that in his return of income, the assessee had reflected the aforesaid amount of Rs. 9,75,000/- i.e. cash surrendered by him, under the head “Any other income”, whereas said surrendered amount was to be reflected in the column “income chargeable to tax at special rate” . In this way, the Assessing Officer was of the view that said mistake apparent from record was required to be rectified. That is how, proceedings u/s 154 r.w.s. 143(1) of the Act were conducted.
During rectification proceedings, the Assessing Officer issued notice to the assessee on 18.12.2023. The assessee furnished reply to the said notice, by opposing the said proceedings.
Soni Varshney, Kota.
The Assessing Officer was not satisfied with the reply furnished by the assessee. Vide rectification order, the Assessing Officer held that income of Rs. 9,75,000/- was taxable at special rate u/s 115BBE of the Act with surcharge thereof.
Feeling aggrieved by the rectification order, the assessee preferred an appeal. Said appeal stands dismissed vide impugned order passed by Learned CIT(A), NFAC.
Ld. AR for the appellant contended that cash to the tune of Rs. 9,75,000/- was found at business premises of the assessee i.e. M/s Varshney Children Hospital & research Centre, Kota, but, somehow, the assessee inadvertently offered the said amount for levy of tax under the head “any other income”, even though said income was her business income or income from profession, and as such. the authorities below have erred in charging tax at special rate u/s 115BBE of the Act with surcharge. The contention is that the impugned rectification order and the impugned order passed by Learned CIT(A) deserve to be set aside. In support of his contention, Ld. AR for the appellant has referred to question No. 20 put to the assessee while recording statement of the assessee during survey proceedings, to which she answered that said cash was her business income.
Soni Varshney, Kota.
On the other hand, Ld. DR for the department has submitted that he stands by the reasons recorded by Learned CIT(A) and the Assessing Officer, and that the present appeal deserves to be dismissed. Ld. DR has submitted that in suchlike case of survey, if such a plea, put forth by the assessee before the authorities, is accepted, every such assessee would ask for levy of tax on normal rate even on the amount, which he or she might have been initially keeping at her residence, by shifting the same to business premises to claim that the cash recovered was from her business income or profession. Discussion 10. Conducting of survey at the business premises of the assessee is admitted. It is also admitted case of the parties that the assessee was running a hospital and research centre at the said premises situated in Kota. During survey, excess cash of Rs. 9,75,000/- was found from the said business premises. It is not case of the department that the aforesaid amount was recovered from the residential premises of the assessee. The department has not brought on record any material to suggest that the assessee was involved in any other activities or that the said cash recovered from the said premises was income from any source other than business premises.
Soni Varshney, Kota.
As is available from the answer given by the assessee to question No. 15 in her statement recorded during survey proceedings, she categorically stated that said income of Rs. 9,75,000/- was income from her business or profession during the financial year under consideration, but she had not declared the same anywhere, and further that she thereby surrendered the said undeclared income for the purpose of levy of tax. At the same time, she offered to deposit tax on the said amount by 15.03.2020.
At the cost of repetition, it may be mentioned here that it is not case of the department that there was any information or material that the assessee was indulging in any activity leading to additional income i.e. in addition to the income from business or profession. It is also not case of the department that any material was recovered from the business premises to suggest that the source of the said excess cash recovered from there, was other than business or professional income.