AMARJEET SINGH HOUSE NO. 94, BILLANWALI LABANA SOLAN, HIMACHAL PRADESH,HIMACHAL PRADESH vs. THE PRINCIPAL COMMISSIONER OF INCOME TAX-1 C.R BUILDING HIMALAYA MARG, SECTOR 17-E, CHANDIGARH , CHANDIGARH

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ITA 398/CHANDI/2024Status: DisposedITAT Chandigarh08 January 2025AY 2018-2019Bench: SHRI RAJPAL YADAV (Vice President), SHRI KRINWANT SAHAY (Accountant Member)3 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the addition itself was deleted and confirmed by the ITAT, there was no basis for invoking Section 263 to question the tax rate applied. Therefore, no action under Section 263 was warranted.

What were the facts?

The Assessing Officer made an addition of Rs. 3,34,62,664/- as unexplained income. The CIT invoked Section 263, believing the AO erred by not applying the 60% tax rate under Section 115BBE. However, the addition was deleted by the CIT(A) and this deletion was upheld by the ITAT.

What were the issues?

Whether the CIT was justified in invoking Section 263 when the underlying addition was deleted by the appellate authorities. The applicability of Section 115BBE tax rate on an addition that has been confirmed as non-existent.

Which sections of the Income-tax Act were involved?

Section 263,Section 69A,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DIVISION BENCH, ‘A’ CHANDIGARH

Before: SHRI RAJPAL YADAV & SHRI KRINWANT SAHAY

For Appellant: Shri Sudhir Sehgal, Advocate
For Respondent: Shri Rohit Sharma,CIT, DR
Hearing: 07.01.2025Pronounced: 08.01.2025

The assessee is in appeal against the order of ld.

Commissioner of Income Tax [in short ‘the CIT’] dated 23.03.2024 passed under Section 263 of the Income Tax Act, 1961 in assessment year 2018-19.

2.

It emerges out from the record that Assessing Officer has made an addition of Rs.3,34,62,664/- under Section 69A A.Y.2018-19 2 as unexplained income. The AO did not charge the tax @ 60% as provided under Section 115BBE, therefore, ld. CIT took cognizance under Section 263 of the Income Tax Act.

The assessee has pointed out that the addition made by the AO was challenged before the ld. CIT(A) who has deleted the addition. The Department came up in appeal before the Tribunal vide ITA No.4/CHD/2024. This appeal has been dismissed by the Tribunal vide order dated 08.08.2024.

Copy of the Tribunal’s order has been placed on the record.

Thus, the very foundation to charge the assessee with tax has already been eliminated.

3.

With the assistance of ld. Representative, we have gone through the record carefully. The dispute in the impugned order is whether a normal rate of tax @ 30%, or under Section 115BBE had to be charged @ 60%. The rate of tax could be available if there is any addition, once the addition stands deleted by the CIT(A) and upheld by the ITAT, therefore, there cannot be any cognizance of application of rate of tax on such item. The ld. CIT(A) ought to have taken cognizance of this fact when it was brought to his notice, but he A.Y.2018-19 3 rejected this plea on the ground that the Department has not accepted the order of the CIT(A) and it is exploring further appeal before ITAT, but now the deletion of addition stands confirmed even at the end of the ITAT. Therefore, we are of the view that no action under Section 263 of the Act deserves to be taken against the assessee. We allow this appeal of the assessee and quash the impugned order passed under Section 263 of the Act.

4.

In the result, appeal is allowed.

Order pronounced on 08.01.2025.

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