SHRI HARI NARAIN GATTANI, JAIPUR V. DCIT, C-4, JAIPUR

ITA 186/JPR/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5178 (ITAT-JAIPUR)
• Duration Of Justice: 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 11-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S R SHARMA
• Keywords: Business income; Search and seizure; Salary income; Assessment record
• Section: 69C; 143(3); 133A; 153A; 69B; 143(2); 69A; 139(1); 131; 68; 54; 132; 154; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 186/JP/2020 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2017-18 SHRI HARI NARAIN GATTANI 2126, GATTANI BHAWAN, MISTRI KHANA ROAD, GANGORI BAZAR, JAIPUR CUKE VS. DCIT, CIRCLE-04, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ACSPG2458C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SH. S. R. SHARMA (CA) & S H. RAJNIKANT BHATRA (CA) JKTLO DH VKSJ LS @ REVENUE BY : MS. CHANCHAL MEENA (ADDL. CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 22/09/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 09/10/2020 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-2, JAIPUR DATED 16.12.2019 CONFIRMING THE ORDER PASSED BY THE AO U/S 154 READ WITH 143(3) DATED 11.01.2019 PERTAINING TO ASSESSME NT YEAR 2017-18. 2. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING SALARY INCOME FROM R.A. GATT ANI & CO, BUSINESS INCOME AS FINANCE BROKER IN THE NAME OF HARI NARAIN GATTAN I AND INCOME FROM OTHER SOURCES. A SURVEY PROCEEDINGS U/S 133A OF THE I.T. ACT, WAS CONDUCTED AT THE BUSINESS PREMISES OF M/S NIKHAR COLLECTIONS, SARAOG I MENTION M.I.ROAD, JAIPUR ON 09.08.2016 BY THE JCIT, RANGE-2, JAIPUR, A PERSO N BY THE NAME OF SH. ATUL KUMAR GUPTA WAS FOUND AT AFORESAID BUSINESS PREMISE S WITH A BAG CONTAINING ITA NO. 186/JP/2020 SH. HARI NARAIN GATTANI, JAIPUR VS. DCIT, JAIPUR 2 CASH OF RS. 22,19,590/-. DURING THE COURSE OF SURVE Y PROCEEDINGS, STATEMENT U/S 131 WAS RECORDED OF SH. ATUL KUMAR GUPTA AND HE EXPLAINED TO THE SURVEY TEAM THAT THE CASH FOUND IN HIS POSSESSION BELONGS TO SH. HARI NARAIN GATTANI. THEREAFTER, THE STATEMENT OF SH. HARI NARAIN GATTAN I WAS ALSO RECORDED BY THE SURVEY TEAM U/S 131 OF THE I.T. ACT, 1961 WHEREIN H E ACCEPTED THAT THE CASH FOUND IN POSSESSION OF SH. ATUL KUMAR GUPTA WAS HIS CURRENT YEARS INCOME I.E. F.Y. 2016-17 (A.Y. 2017-18) AND THEREAFTER, A SEARC H WARRANT U/S 132 WAS ISSUED IN THE NAME OF ASSESSEE AND THE BAG IN HIS P OSSESSION WAS SEARCHED AT 421, 4 TH FLOOR, SARAOGI MANSION, M.I.ROAD, JAIPUR. A SURVEY U/S 133A (1) OF THE I.T. ACT WAS ALSO CONDUCTED AT BUSINESS PREMISES OF THE ASSESSEE. NO INCRIMINATING DOCUMENTS, CASH OR VALUABLE ITEMS WER E FOUND DURING THE COURSE OF SURVEY PROCEEDINGS. FINALLY, THE CASH OF RS. 22, 19,590/- WHICH WAS FOUND FROM THE BAG OF SHRI ATUL KUMAR SHARMA WAS SEIZED I N COURSE OF SEARCH ACTION. 3. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE THERE AFTER FILED HIS RETURN OF INCOME FOR ABOVE ASSESSMENT YEAR U/S 139(1) ON 28-0 7-2017 DISCLOSING TOTAL INCOME OF RS. 41,78,390/- WHICH INCLUDED THE SURREN DERED INCOME OF RS. 22,19,590/- AS CURRENT YEARS BUSINESS INCOME OFFERED TO TAX AND PAID TAX AND INTEREST AT NORMAL RATE OF TAX FOR AN INDIVIDUA L. THE SAID RETURN WAS REVISED ON 27-08-2018 ONLY TO CORRECT AN ENTRY OF DATA IN E -FILED RETURN WHILE DECLARING EXACTLY SAME INCOME AND DETAILS AS WAS DECLARED IN ORIGINAL RETURN. 4. IT WAS FURTHER SUBMITTED THAT THE A.O. THEREAFTE R ISSUED NOTICE U/S 143(2) WHICH ASSESSEE DULY COMPLIED WITH BY FILING INFORMA TION/DETAILS AS REQUIRED AND LD. A.O. COMPLETED THE ASSESSMENT U/S 143(3) ACCEPT ING RETURNED INCOME AS DECLARED BY ASSESSEE. SEPARATELY, PENALTY PROCEEDIN GS U/S 271AAB(1)(A) WERE INITIATED BY THE A.O. STATING THAT AS THE ASSESSEE HAS DECLARED THE UNDISCLOSED INCOME OF RS. 22,19,590/- WHICH HE SURRENDERED DURI NG THE SEARCH AND SEIZURE ITA NO. 186/JP/2020 SH. HARI NARAIN GATTANI, JAIPUR VS. DCIT, JAIPUR 3 ACTION AND SUBSTANTIATED THE MANNER IN WHICH THE UN DISCLOSED INCOME WAS DERIVED. THE ASSESSEE HAS ALSO PAID ALL DUE TAX WIT H INTEREST IN RESPECT OF ABOVE DISCLOSED INCOME. HENCE, THE PENALTY PROCEEDINGS U/ S 271AAB (1) (A) ARE ALSO BEING INITIATED SEPARATELY. THE A.O. IN ASSESSMENT COMPLETED U/S 143(3) ALSO CHARGED THE TAX AND INTEREST AT NORMAL RATES OF TAX FOR INDIVIDUAL AND RAISED NIL DEMAND. 5. IT WAS FURTHER SUBMITTED THAT THE A.O. THEREAFTE R ISSUED NOTICE U/S 154 GIVING PARTICULARS OF MISTAKE AS UNDER: IT IS OBSERVED THAT IT IS A SEARCH ASSESSMENT CASE AND ASSESSEE HAS SURRENDERED OF RS. 22,19,560/- DURING THE SEARCH AC TION AS AN UNDISCLOSED INCOME FOR THE YEAR UNDER CONSIDERATION , ON WHICH TAX RATE WAS TO BE CHARGED AS PER PROVISION OF SECTION 115BB E OF THE I.T.ACT. BUT DURING THE TAX CALCULATION THE TAX RATE ON SURRENDE RED INCOME U/S 115BBE OF THE I.T.ACT, HAS APPLIED AS PER 30% BUT A S PER SECOND AMENDMENT IN PROVISION OF SECTION 115BBE OF THE I.T .ACT (W.E.F. 01-04- 2017), THE TAX RATE SHOULD BE CHARGED @ 60% ON THE ABOVE INCOME, IN ADDITION TO THIS 25% SURCHARGE OF SUCH TAX AND 3% E DUCATION CESS OF TAX AND SURCHARGE . 6. IT WAS SUBMITTED THAT IN RESPONSE TO THE SHOW-CA USE NOTICE, THE ASSESSEE FILED HIS OBJECTIONS TO PROPOSED RECTIFICATION U/S 154 BY A.O. WHICH A.O. DID NOT ACCEPT AND CHARGED TAX @ 60% ON SAID INCOME OF RS. 22,19,560/- AND IN ADDITION TO 25% SURCHARGE ON SUCH TAX AND 3% EDUCATION CESS ON TAX AND PLUS APPLICABLE INTEREST THEREON AND RAISED A DEMAND OF RS. 12,85,810/-. BEING AGGRIEVED, THE ASSESSEE W ENT IN APPEAL BEFORE THE LD CIT(A) WHO HAS SUSTAINED THE ORDER OF THE AO AND AG AINST, THE SAID FINDINGS, THE ASSESSEE IS NOW IN APPEAL BEFORE US. ITA NO. 186/JP/2020 SH. HARI NARAIN GATTANI, JAIPUR VS. DCIT, JAIPUR 4 7. IN THE AFORESAID FACTUAL BACKGROUND, IT WAS SUB MITTED BY THE LD AR THAT FOR INVOKING SECTION 154(1) OF THE ACT, THE MISTAKE MUS T BE APPARENT FROM RECORD AND IN THE PRESENT CASE, THE MISTAKE POINTED OUT BY A.O IN HIS NOTICE U/S 154 WAS NOT APPARENT FROM RECORD OR OBVIOUS AND PATENT MISTAKE. THE AO STATES THAT ASSESSEE HAS SURRENDERED RS. 22,19,560/- DURIN G THE SEARCH ACTION AS AN UNDISCLOSED INCOME FOR THE YEAR ON WHICH TAX RATE I S TO BE CHARGED AS PER PROVISIONS OF SECTION 115BBE AS AMENDED BY TAXATION LAWS (SECOND AMENDMENT ACT), 2016. IT WAS SUBMITTED THAT IN THIS CASE, THE ASSESSEE IN HIS RETURN OF INCOME FURNISHED U/S 139 DECLARED THE SAI D INCOME OF RS. 22,19,560/- AS CURRENT YEARS BUSINESS INCOME OFFERED TO TAX AND IN RETURN, IT WAS SHOWN AS BUSINESS INCOME WHICH IS NOT AN INCOME REFERRED TO IN SECTION 68, SECTION 69, SECTION 69A, SECTION 69B, SECTION 69C OR SECTIO N 69D AS IS EVIDENT FROM COPY OF RETURN, PROFIT AND LOSS ACCOUNT AND BALANCE -SHEET OF THE ASSESSEE. IT WAS ACCORDINGLY SUBMITTED THAT THE ASSESSEE DID NOT APPLY PROVISIONS OF SECTION 115BBE WHILE COMPUTING TAX PAYABLE AS PER RETURN OF INCOME. THE AO ALSO IN ASSESSMENT COMPETED U/S 143(3) DID NOT DETERMINE TH E SAID INCOME ASSESSABLE U/S 68, SECTION 69, SECTION 69A, SECTION 69B, SECTI ON 69C, SECTION 69D AND SO RIGHTLY NOT INVOKED PROVISIONS OF SECTION 115BBE WH ILE DETERMINING TAX PAYABLE BY ASSESSEE ON ASSESSMENT BUT DETERMINED TAX PAYABL E BY ASSESSEE AT NORMAL TAX RATES AS IS EVIDENT FROM ASSESSMENT ORDER. THE AO IN THE NOTICE U/S 154 ISSUED TO ASSESSEE HAS WRONGLY STATED THAT DURING T HE TAX CALCULATION, THE TAX RATE ON SURRENDERED INCOME U/S 115BBE HAS BEEN APPL IED @ 30%. THUS NOTICE U/S 154 POINTING OUT MISTAKE WAS ON WRONG FACTS. TH US WHEN PROVISIONS OF SECTION 115BBE WAS NOT AT ALL INVOKED WHILE PASSING THE ASSESSMENT ORDER, THEN IT CANNOT BE HELD IN NOTICE U/S 154 THAT THE S AME WAS A MISTAKE APPARENT FROM RECORD. IT WAS FURTHER SUBMITTED THAT THE APPL ICABILITY OR NON-APPLICABILITY OF PROVISIONS OF SECTION 115BBE ON SUCH FACTS IS DE BATABLE ISSUE WHICH SHOULD HAVE BEEN TAKEN IN COMPLETING REGULAR ASSESSMENT U/ S 143(3) AND NOT IN PROCEEDINGS U/S 154 OF THE ACT. IT WAS SUBMITTED TH AT THIS IS NOT AN OBVIOUS OR ITA NO. 186/JP/2020 SH. HARI NARAIN GATTANI, JAIPUR VS. DCIT, JAIPUR 5 PATENT MISTAKE WHICH IS APPARENT FROM THE RECORD. IN SUPPORT, THE RELIANCE WAS PLACED ON THE CO-ORDINATE BENCH DECISION IN CASE OF ACIT VS. SUDESH KUMAR GUPTA REPORTED IN 117 TAXMANN.COM 178. 8. IT WAS FURTHER SUBMITTED THAT THE AMENDMENT PROV ISIONS OF SECTION 115BBE OF THE ACT AS AMENDED BY THE TAXATION (SECON D AMENDMENT) ACT, 2016 ARE APPLICABLE FROM 15.12.2016 AND ARE NOT RET ROSPECTIVE IN OPERATION AND THEREFORE NO APPLICAABLE TO THE SEARCH OPERATION CO NDUCTED IN CASE OF THE ASSESSEE ON 9 TH AND 10 TH OF AUGUST, 2016. IT WAS SUBMITTED THAT THE TAX LAW S AS THE TAXATION (SECOND AMENDMENT) ACT, 2016 WAS AMEND ED ON 15.12.2016 AND RECEIVED THE ASCENT OF PRESIDENT OF INDIA ON THE SA ID DATE. IT WAS SUBMITTED THAT THOUGH THE AMENDMENT WAS APPLICABLE FOR ASSESS MENT YEAR 2017-18 BUT ONLY ON INCOME REFERRED TO IN SAID SECTION PERTAINI NG TO THE DATE AFTER 15.12.2016. AS IN CASE OF THE ASSESSEE, THE UNEXPLA INED CASH WAS FOUND AND SEIZED ON 9 TH AND 10 TH OF AUGUST, 2016 AND ACCORDINGLY AT THE MATERIAL TI ME, OLD PROVISIONS OF SECTION 115BBE ARE APPLICABLE. IT WAS ACCORDINGLY SUBMITTED THAT THE AMENDMENT PROVISIONS ARE NOT RETROSPECTIVE IN O PERATION AND ARE NOT APPLICABLE IN THE PRESENT CASE AND HAS BEEN WRONGLY INVOKED BY THE ASSESSING OFFICER UNDER PROCEEDINGS INITIATED U/S 154 OF THE ACT. IN SUPPORT, THE RELIANCE WAS PLACED ON HONBLE SUPREME COURT DECISION IN CAS E OF KARIMTHARUVI TEA ESTATE LTD. VS. STATE OF KERALA [1966] 60 ITR 262 ( SC). 9. PER CONTRA, THE LD DR SUBMITTED THAT THE ASSESS EE FILED THE RETURN OF INCOME DECLARING INCOME OF RS. 41,78,390 WHICH INCL UDES AS INCOME OF RS. 22,19,590 SURRENDERED IN RESPECT OF CASH FOUND FROM SHRI ATUL KUMAR GUPTA AND WHICH HAS BEEN OWNED UP BY THE ASSESSEE. IN OR DER PASSED UNDER SECTION 143(3), THE AO SPECIFICALLY MENTIONED THAT THE INCO ME DECLARED BY THE ASSESSEE INCLUDED INCOME OF RS. 22,19,590 SURRENDERED ON ACC OUNT OF CASH. ONCE, THIS ITA NO. 186/JP/2020 SH. HARI NARAIN GATTANI, JAIPUR VS. DCIT, JAIPUR 6 FACT IS MENTIONED IN THE ASSESSMENT ORDER, THE CORR ECT RATE OF TAX IS AS PER SECTION 115BBE, THOUGH, THE SECTION IS NOT MENTIONE D BY THE AO. THEREFORE, IT IS CLEARLY A MISTAKE APPARENT FROM RECORD AS THE WRONG RATE HAS BEEN CHARGED AND WHICH IS SOUGHT TO BE RECTIFIED BY THE AO. IT WAS FURTHER SUBMITTED THAT FROM PERUSAL OF GROUND NO. 2 OF THE ASSESSEES APPE AL, IT IS CLEAR THAT THE ASSESSEE HAS NOT CHALLENGED THE APPLICABILITY OF SE CTION 115BBE OF THE ACT AND HAS ONLY CHALLENGED THE AMENDMENT BROUGHT IN BY THE TAXATION (SECOND AMENDMENT) ACT, 2016. IN THIS REGARD, IT WAS SUBMI TTED THAT CLAIM OF ASSESSEE THAT THIS AMENDMENT CANNOT BE APPLIED RETROSPECTIVE LY CANNOT BE ACCEPTED AS THE AMENDMENT HAS BEEN BROUGHT IN WITH EFFECT FROM 1.4.2017 I.E, RELEVANT TO ASSESSMENT YEAR 2017-18 AND THE AMENDED RATE OF TAX @ 60% IS FOR THE COMPLETE FINANCIAL YEAR 2016-17 AND THE ASSESSEES CASE CLEARLY FALLS UNDER THE FINANCIAL YEAR 2016-17 RELEVANT TO ASSESSMENT YEAR 2017-18. THE LD DR ACCORDINGLY SUPPORTED THE FINDINGS OF THE LOWER AUT HORITIES. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE REFER TO THE ORDER PASSED BY THE ASSE SSING OFFICER U/S 154 AND THE FINDINGS OF THE ASSESSING OFFICER THEREIN READ AS UNDER: IN THIS CASE THE ASSESSMENT UNDER SECTION 143(3) R .W.S 153A OF THE I.T. ACT, 1961, FOR THE ASSESSMENT YEAR 2017-18, WAS COM PLETED ON 06.12.2018, AT ASSESSED INCOME OF RS. 41,78,390/-. AS THIS IS A SEARCH ASSESSMENT CASE AND ASSESSEE SURRENDERED OF RS. 22, 19,590/- DURING THE SEARCH ACTION AS AN UNDISCLOSED INCOME FOR THE YEAR UNDER CONSIDERATION, ON WHICH TAX RATE WAS TO BE CHARGED AS PER PROVISIO N OF SECTION 115BBE OF THE I.T. ACT. HOWEVER DURING THE ASSESSMENT PROC EEDINGS THE TAX RATE ON SURRENDERED INCOME U/S 115BBE OF THE I. T. ACT, CHARGED @ 30% WHEREAS AS PER SECOND AMENDMENT IN PROVISION OF SEC TION 115BBE OF THE I.T. ACT (W.E.F 01.04.2017), THE TAX RATE SHOULD HA VE BEEN CHARGED @ ITA NO. 186/JP/2020 SH. HARI NARAIN GATTANI, JAIPUR VS. DCIT, JAIPUR 7 60% ON THE ABOVE SURRENDERED AMOUNT, IN ADDITION TO THIS 25% SURCHARGE ON SUCH TAX AND 3% EDUCATION CESS OF TAX AND SURCHARGE. THERE IS A MISTAKE APPARENT FROM RECORDS AND THE SA ME IS REQUIRED TO BE RECTIFIED U/S 154 OF THE I.T. ACT. FURTHER, IN THE ABOVE MATTER AN OPPORTUNITY TO BEIN G HEARD HAS BEEN PROVIDED TO ASSESSEE ON 27.12.2018. IN RESPONSE TO THE SAME ASSESSEE HAS SUBMITTED HIS WRITTEN REPLY ON DATED 10.01.2019 . THE REPLY OF THE ASSESSEE HAS BEEN CONSIDERED ON MERITS HOWEVER, THE SAME WAS NOT FOUND TENABLE. IN VIEW OF DISCUSSION HELD IN ABOVE PARA(S) THE REVISED TAX CALCULATION IS BEING ISSUED WITH THIS ORDER WHICH S HALL BE PART OF THIS ORDER ACCORDINGLY. THE ASSESSED INCOME OF RS. 41,78,390/- WILL REMAIN UNCHANGED. 11. WE FIND THAT THE REASONING ADOPTED BY THE AO FO R INVOKING PROVISIONS OF SECTION 154 IS AS FOLLOWS. FIRSTLY, HE STATED THAT THIS IS A SEARCH ASSESSMENT CASE AND ASSESSEE SURRENDERED A SUM OF RS. 22,19,59 0/- DURING THE SEARCH ACTION AS AN UNDISCLOSED INCOME FOR THE YEAR UNDER CONSIDERATION, ON WHICH TAX RATE WAS TO BE CHARGED AS PER PROVISION OF SECTION 115BBE OF THE I.T. ACT. SECONDLY, HE HAS STATED THAT DURING THE ASSESSMENT PROCEEDINGS, THE TAX RATE ON SURRENDERED INCOME U/S 115BBE OF THE ACT HAS BEE N CHARGED @ 30%. AND THIRDLY, AS PER AMENDED PROVISIONS OF SECTION 115BB E OF THE ACT AS APPLICABLE IN THE INSTANT CASE, THE TAX RATE SHOULD HAVE BEEN CHA RGED @ 60% ON THE ABOVE SURRENDERED AMOUNT. 12. IF WE LOOK AT THE PROVISIONS OF SECTION 115BBE, IT PROVIDES THAT WHERE THE TOTAL INCOME OF THE ASSESSEE INCLUDES ANY INCOME RE FERRED TO IN SECTION 68 , SECTION 69, SECTION 69A , SECTION 69B , SECTION 69C OR SECTION 69D, THE INCOME TAX PAYABLE SHALL BE AT THE RATE OF 30% ON INCOME S O REFERRED IN SAID SECTIONS. FURTHER, IN TERMS OF AMENDED PROVISIONS OF SECTION 115BBE BY THE TAXATION ITA NO. 186/JP/2020 SH. HARI NARAIN GATTANI, JAIPUR VS. DCIT, JAIPUR 8 LAWS (SECOND AMENDMENT ACT), 2016, IT PROVIDES THAT WHERE THE TOTAL INCOME OF THE ASSESSEE INCLUDES ANY INCOME REFERRED TO IN SECTION 68 , SECTION 69, SECTION 69A , SECTION 69B , SECTION 69C OR SECT ION 69D AND REFLECTED IN THE RETURN OF INCOME FURNISHED UNDER SECTION 139 OR THE TOTAL INCOME OF THE ASSESSEE DETERMINED BY THE ASSESSING OFFICER INCLUD ES ANY INCOME REFERRED TO IN SECTION 68, SECTION 69, SECTION 69A, SECTION 69B , SECTION 69C OR SECTION 69D, IF SUCH INCOME IS NOT REFLECTED IN THE RETURN OF IN COME FURNISHED UNDER SECTION 139 OF THE ACT, THE INCOME TAX PAYABLE SHALL BE AT THE RATE OF 60% ON INCOME SO REFERRED IN SAID SECTIONS. THUS, BOTH THE PRE-A MENDED AND POST-AMENDED PROVISIONS OF SECTION 115BBE TALKS ABOUT THE INCOME REFERRED TO IN SECTION 68, SECTION 69, SECTION 69A, SECTION 69B, SECTION 6 9C OR SECTION 69D. THE CHANGE WHICH HAS BEEN BROUGHT ABOUT IN THE PROVISIO NS RELATES TO INCOME SO REFERRED IN AFORESAID PROVISIONS SO DEFINED WHICH I S EITHER REFLECTED IN THE RETURN OF INCOME OR DETERMINED BY THE ASSESSING OFFICER AN D IN BOTH CASES, IT WILL BE COVERED BY THE PROVISIONS OF SECTION 115BBE OF THE ACT AND RATE OF TAXATION HAS BEEN INCREASED FROM 30% TO 60% ON SUCH SPECIFIED IN COME. THERE IS THEREFORE NOTHING STATED IN EITHER THE PRE-AMENDED OR POST-AM ENDED PROVISIONS OF SECTION 115BBE THAT WHERE THE ASSESSEE SURRENDERS U NDISCLOSED INCOME DURING THE SEARCH ACTION FOR THE RELEVANT YEAR, THE TAX RA TE HAS TO BE CHARGED AS PER PROVISION OF SECTION 115BBE OF THE ACT. THEREFORE, WITHOUT DWELLING FURTHER ON THE APPLICABILITY OF THE AMENDED PROVISIONS OF SECT ION 115BBE FOR THE IMPUGNED ASSESSMENT YEAR, THE REASONING SO ADOPTED BY THE AS SESSING OFFICER IN TERMS OF APPLICABILITY OF SECTION 115BBE BY DEFAULT IN SEARC H CASES CANNOT BE ACCEPTED AND IN ANY CASE, THE SAME IS CLEARLY NOT A MISTAKE WHICH IS APPARENT FROM THE PLAIN READING OF THE PROVISIONS OF SECTION 115BBE O F THE ACT. 13. COMING TO THE OTHER CONTENTION RAISED BY THE ASSESSING OFFICER WHEREIN HE HAS STATED THAT DURING THE ASSESSMENT PROCEEDINGS, THE TAX RATE HAS BEEN CHARGED @ 30% ON SURRENDERED INCOME U/S 115BBE OF T HE ACT AND WHICH IS ITA NO. 186/JP/2020 SH. HARI NARAIN GATTANI, JAIPUR VS. DCIT, JAIPUR 9 NOW SOUGHT TO BE RECTIFIED IN TERMS OF IMPUGNED ORD ER. IN THIS REGARD, WE HAVE GONE THROUGH THE RETURN OF INCOME AS WELL AS THE AS SESSMENT ORDER SO PASSED BY THE ASSESSING OFFICER U/S 143(3) AND FIND THAT I N THE RETURN OF INCOME, TAX LIABILITY ON THE UNDISCLOSED INCOME HAS BEEN DETERM INED AS PER SLAB RATE OF TAXATION APPLICABLE TO AN INDIVIDUAL AND NOT AT THE RATE OF 30% AS PER 115BBE OF THE ACT. SIMILARLY, IN THE ASSESSMENT ORDER PAS SED U/S 143(3), WE FIND THAT FIRSTLY, THERE IS NO FINDING BY THE ASSESSING OFFIC ER THAT THE INCOME SO SURRENDERED HAS BEEN DETERMINED AS INCOME REFERRED TO IN SECTION 68, SECTION 69, SECTION 69A, SECTION 69B, SECTION 69C OR SECTIO N 69D AND SECONDLY, IN THE COMPUTATION OF TAX LIABILITY, THE TAX LIABILITY ON THE UNDISCLOSED INCOME HAS BEEN DETERMINED AS PER SLAB RATE OF TAXATION APPLICABLE TO AN INDIVIDUAL AND NOT AT THE RATE OF 30% AS SPECIFIED IN SECTION 115BBE. THU S, BOTH THE INCOME SO OFFERED BY THE ASSESSEE AS WELL AS RATE OF TAXATION HAS BEEN ACCEPTED BY THE ASSESSING OFFICER AND IN FACT, WE FIND THAT THERE I S A SPECIFIC FINDING BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAS ALSO PAID ALL DUE TAX WITH INTEREST IN RESPECT OF THE UNDISCLOSED INCOME. THERE IS THUS, NO FINDING THAT ANY OF THE AFORESAID PROVISIONS SO REF ERRED IN SECTION 115BBE HAVE BEEN INVOKED BY AO DURING THE ASSESSMENT PROCEEDING S AND THEREFORE, WE FIND THAT THE CONTENTION OF THE ASSESSING OFFICER THAT D URING THE ASSESSMENT PROCEEDINGS, THE TAX RATE HAS BEEN CHARGED @ 30% ON SURRENDERED INCOME U/S 115BBE OF THE ACT IS NOT FACTUAL CORRECT AS NOT BOR NE OUT OF ASSESSMENT RECORDS AND THUS, THE ACTION OF THE ASSESSING OFFICER IN RE CTIFYING AND INCREASING THE RATE OF TAXATION FROM 30% TO 60% AND SURCHARGE AND CESS ON SUCH UNDISCLOSED INCOME DOESNT COME WITHIN THE PURVIEW OF SECTION 1 54 OF THE ACT. 14. IN LIGHT OF AFORESAID DISCUSSIONS AND IN THE FA CTS AND CIRCUMSTANCES OF THE PRESENT CASE, WE ARE OF THE CONSIDERED VIEW THAT TH E ACTION OF THE ASSESSING OFFICER IN INVOKING HIS JURISDICTION U/S 154 IS NOT LEGALLY TENABLE AS BEYOND THE ITA NO. 186/JP/2020 SH. HARI NARAIN GATTANI, JAIPUR VS. DCIT, JAIPUR 10 SCOPE AND POWERS U/S 154 OF THE ACT AND THE ORDER S O PASSED AS CONFIRMED BY THE LD CIT(A) IS HEREBY SET-ASIDE. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/10/2020. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 09/10/2020 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI HARI NARAIN GATTANI, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- DCIT, CIRCLE-04, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 186/JP/2020} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR