MANJU GOYAL,BIKANER vs. ACIT, CIRCLE-1, BIKANER

ORDER DR. MITHA LAL MEENA, A.M.: The captioned appeal has been filed by the assessee against the order of the ld. National Faceless Appeal Centre [NFAC/CIT(A)], Delhi dated 19.09.2024 in respect of Assessment Year: 2017-18 where the assessee has raised following grounds:

2. That under the facts and circumstances of the case, the learned authorities below have seriously erred in charging tax u/s 115BBE whereas from the proceedings it is clear that the income surrendered was on account business receipts.

3. That the learned Assessing Officer (AO) erred in applying the amended provisions of Section 115BBE of the Income Tax Act, 1961 retrospectively. The amendment introduced on 15.12.2016 is applicable prospectively and cannot be invoked for income declared during the survey conducted on 23.08.2016. The same has been upheld by judicial precedents which emphasize that Year 2017-18) legislative amendments impacting substantive rights must apply prospectively.

5. As on the date of the survey (23.08.2016), the amended provisions of Section 115BBE were not in force, and the surrendered income was accepted by the Revenue authorities as business income subject to tax at the rate of 30%. The Assessing Officer, during assessment proceedings, has taken a contradictory view without any legal or factual basis, which is not permissible. Once the surrendered income and tax treatment have been accepted at the time of survey, a different stance cannot be taken later, especially in the absence of any change in law or material facts 6. The legislative intent behind the amendment to Section 115BBE was to address cash deposits during the post-demonetization period (08.11.2016 to 31.12.2016). The AO's application of these provisions to pre-demonetization events misinterprets the law and imposes an unwarranted tax burden on the appellant.

7. The learned Commissioner of Income Tax (Appeals) erred in dismissing the grounds of appeal

without adequately addressing the appellant's submissions and failed to appreciate the factual and legal merits of the case. The order under appeal suffers from a lack of proper reasoning, disregard for the appellant's contentions, and mechanical application of provisions, thereby violating principles of natural justice

2. The grounds of appeal are interlinked to each other where the appellant has challenged the charging tax u/s 115BBE on the income surrendered on account business receipts during the course of survey.

3. Having heard both the sides and perusal of material on record, we find that the appellant had surrendered income of Rs. 50,00,000/- as unrecorded business receipts out of cash sales for the period from 17.08.2016 to 23.08 2016 recorded in the books which was invested in the building construction Year 2017-18) and sundry debtors. Accordingly, the appellant included the surrendered income under the head "Profits and Gains of Business or Profession" as agreed in the surrender note and paid due taxes @ 30% while filing return of income.

4. The Ld. CIT (A) while affirming the finding of the AO observed that provisions of section 115BBE would be applicable to tax the unexplained money being undisclosed asset found during the course of search, which is contrary to the facts on record. It is noted that the date of search conducted on the assessee was on 23.08.2016, and amendment came into force w.e.f. 15.12.2016 wherein it was not mentioned that the section 115BBE of the Act, was applicable retrospectively. Thus, the assessee may be allowed the benefit of the applicability of the section which shall come in to force with effect from the date of amendment. Accordingly, the pre-amendment rate of 30% as applicable before 15.12.2016, alone can be applied to the appellant's case.