INCOME TAX ACT, 1961

Section 115BBE

Tax on specified income - Under section 115BBE - Applicability of enhanced rate of 60% - Taxation Laws (Second Amendment) Act, 2016

Assessee by way of writ sought for a declaration that amendments made by Taxation Laws (Second Amendment) Act, 2016, to section 115BBE enhancing the rate of income-tax, for specified incomes which are unexplained, to 60% and the surcharge provided in Finance Act, 2016 to 25% for income covered under section 69A, were to be held prospective not applicable to the seizures made prior to the amendment. Held: Section 115BBE was inserted by Finance Act, 2012 with effect from 1-4-2013. As on 1-4-2016 the financial year in which subject seizures occurred section 15BBE provided for 30% tax on income referred to in sections 68, 69, 69A, 69B, 69C and 69D. The same was amended by the 2nd Amendment Act; with effect from 1-4-2017, enhancing the rate to 60%. Hence, there was no new liability created and the rate of tax merely stood enhanced which was applicable to assessments carried on in that year. The enhanced rate applies from the commencement of assessment year, which related to the previous financial year. When it stood enhanced from 1-4-2017 for every assessment carried out in that year, related to the previous year, the rates as applicable on 1-4-2017 were to be applied. There being no new Liability Created or obligation imposed, arguments raised by assessee failed. Therefore, Writ Appeal was dismissed.

Applied :CIT, Kerala v. K Srinivas (1972) 4 SCC 526 : 1972 TaxPub(DT) 352 (SC)

REFERRED :

FAVOUR : Against the assessee.

A.Y. :

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