Section 115BBE cannot apply to surrendered income unless it is first brought within sections 68 to 69D, tribunal holds

5-Second Takeaway

Section 115BBE applies only where the income is first brought within sections 68 to 69D; a mere surrender during survey does not, by itself, attract the special rate. Here, Rs. 6,25,000 had already been offered in the return, no deeming provision was invoked, and the amount had to be taxed at the normal rate.

The tribunal considered whether an amount surrendered during survey, but already included in the return of income, could be charged under section 115BBE at the special rate. It held that the provision does not create a separate category of “surrendered” or “undisclosed” income.

The decisive point was that section 115BBE operates only when the income falls within one of the specific deeming provisions in sections 68, 69, 69A, 69B, 69C or 69D. In this case, the assessment order did not identify any such provision, nor did it record findings showing that the statutory conditions for any of them were met.

The tribunal also rejected the view that unexplained source alone was enough to trigger section 115BBE. It said the deeming provisions have distinct fields and cannot be treated as interchangeable or invoked in the abstract.

Since the Rs. 6,25,000 had already been offered to tax and was not separately brought to tax under any of those sections, the application of section 115BBE was unsustainable. The tribunal set aside the contrary finding and directed taxation at the normal rate.