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

ITA 891/JODH/2024

AI Insights

The case revolves around an appeal by Manju Goyal against the order of the National Faceless Appeal Centre (NFAC/CIT(A)), which upheld the Assessing Officer's decision to tax a surrendered income of Rs. 50,00,000 at a higher rate under Section 115BBE. The income was declared during a survey and was initially accepted as business income, taxed at 30%. The appellant contested the retrospective application of the amended Section 115BBE, arguing it should apply prospectively as per judicial precedents. The Tribunal agreed with the appellant, referencing a similar case (Parshavnath Buildestate) and noting the absence of any change in law or material facts post-survey that would justify a different tax treatment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 842154 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Appeal Filed On: 02-12-2024
• Other Referred Cases: Parshavnath Buildestate (P) Ltd Vs. ACIT - ITAT Jaipur (2025) 209 Taxlok.com 847
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P.R. MIRDHA; VIRTUAL
• Assessee Lawyers: DEEPAK VYAS; VIRTUAL
• Keywords: Business income; Principle of natural justice
• Section: 68; 69C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH JODHPUR BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA No. 891/Jodh/2024 Assessment Year 2017-18) Manju Goyal, Sadul Colony, Bikaner – 334001. PAN No. AFKPG9193D ACIT, Circle-1, Bikaner. Assessee by Shri Deepak Vyas, C.A. (Virtual) Revenue by Shri P.R. Mirdha, Addl. CIT (Virtual) Date of Hearing 18.02.2026 Date of Pronouncement 26.02.2026 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: 1. That the order passed by the learned authorities below are against Law- Equity-Justice & facts of the case. 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 Printed from counselvise.com 2 ITA No. 891/Jodh/2024 (Assessment Year 2017-18) legislative amendments impacting substantive rights must apply prospectively. 4. That the learned AO failed to appreciate that the surrendered income of ₹50,00,000 represents unrecorded business receipts and is not unexplained cash, investment, or expenditure under Sections 68 to 69D of the Income Tax Act. The source of the income is well-explained and supported by statements recorded during the course of survey proceedings. 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 Printed from counselvise.com 3 ITA No. 891/Jodh/2024 (Assessment 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. 5. The Ld. AR placed reliance on the case of Parshavnath Buildestate (P) Ltd Vs. ACIT - ITAT Jaipur (2025) 209 Taxlok.com 847 where the Tribunal has deleted tax levied under Section 115BBE on income of Rs.2.00 crore declared during survey proceedings by holding that the surrendered income, representing unrecorded expenditure for land development and construction, was derived from the assessee's real estate business. Since the income was taxed under 'Business Income\" and its source was duly explained, Section 69C and Printed from counselvise.com 4 ITA No. 891/Jodh/2024 (Assessment Year 2017-18) consequential application of Section 115BBE were unjustified. The addition and higher tax levy were deleted. 6. In the present case,the income was surrendered under 'Business Income\" and its source was duly explained, Section 68 to 69D and consequential application of Section 115BBE were unjustified. Accordingly, we hold that the surrendered income of Rs. 50,00,000/- as business income and the levy of tax at normal rates as against higher rate under section 115BBEof the Act applied by the AO. Thus, the issue of applicability of tax rate is allowed. 7. In the result, the appeal of the assessee is allowed. Order pronounced on 26/02/2026 in the open court. Sd/- Sd/- (SUDHIR PAREEK) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated :……/..…/2025 Nimisha Sr. PS True Copy Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File BY ORDER, Printed from counselvise.com "