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Judgment
PER BRAJESH KUMAR SINGH, AM,
This appeal by the assessee is directed against the order dated 14.06.2024 of National Faceless Appeal Centre (NFAC) [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the Assessment Order dated nil passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the ‘the Act’) by the ITO, Ward-50(1), New Delhi, (hereinafter referred to as the ‘AO’) pertaining to Assessment Year (A.Y.) 2017-18.
This appeal was disposed of by the Tribunal vide order dated 31.07.2025, in which the additional ground no. 4 of the appeal was inadvertently not adjudicated. The said ground of the appeal is reproduced as under:
“4.Without prejudice demand computed in accordance with rate specified in section 115BBE of the Act as amended by Taxation Laws (Second Amendment) Act, 2016 is wholly misconceived."
In this regard, a miscellaneous application was filed by the assessee and the said M.A. was allowed by the Tribunal in M.A. No. 350/Del/2025 arising out of ITA No. 3203/Del/2024 for A.Y. 2017-18 vide its order dated 05.12.2025. The said M.A. of the Tribunal was recalled to the extent of determination of ground no. 4 of the appeal. The relevant extract of the order of the Tribunal dated 05.12.2025 in the said M.A. is reproduced as under:
“The application in hand has been filed under Section 254(2) of the Income Tax Act, 1961 and on hearing both the sides we find that the claim of assessee is that the ground No. 4 was not decided and the same is reproduced below:
“4.Without prejudice demand computed in accordance with rate specified in section 115BBE of the Act as amended by Taxation Laws (Second Amendment) Act, 2016 is wholly misconceived.”
2.As we had decided the appeal of the assessee partly the determination of this ground is essential and cannot be considered to be merely consequential. Thus, that the order dated 31.07.2025 is recalled to the extent of determining ground No. 4. Accordingly, the application in hand has been allowed. “
The said ground no. 4 of the appeal was filed by way of an additional ground of appeal by the assessee, and the relevant extract of the petition for admission of the additional ground is reproduced as under:
“In the captioned matter, in addition to the grounds of appeal already taken, we intend to take the following as additional ground:
“4.Without prejudice demand computed in accordance with rate specified in section 115BBE of the Act as amended by Taxation Laws (Second Amendment) Act, 2016 is wholly misconceived."
2.The aforesaid additional ground could not be raised earlier due to inadvertence which was neither willful nor intentional and the same is supported by the recent judgment dated 19.11.2024 of Hon'ble Madras High Court in the case of S.M.I.L.E Microfinance Ltd. vs. ACIT [WP (MD) No. 2078 & 1742 of 2020] followed by Hon'ble 'B' Bench of ITAT, Delhi on 26.03.2025 in the case of Deepak Sharma vs. ACIT [ITA No. 2886/Del/2022 for AY 2017-18].
3.As aforesaid additional ground of appeal does not require any new fact and comes out from the records before the Assessing Officer, it is requested that the same may please be admitted.
4.Further, the additional ground raise pure jurisdictional issues which goes to the very root of the matter, for which all the facts are available on record, the same deserves to be entertained and adjudicated upon, in view of decision of Hon'ble Supreme Court in the case of NTPC vs. CIT [1998] 229 ITR 383 (SC).
It is most respectfully prayed that your honours be pleased to admit the aforesaid grounds so that the same may receive due adjudication.”
We have heard both the parties and perused the material available on record. As noted above, the assessee has raised an additional ground no. 4, in this appeal which is purely legal in nature. We further find that all the facts relevant for adjudication of the aforesaid additional ground are already on record. Hence, in view of the decision of the Hon’ble Supreme Court in the case of NTPC Limited vs CIT 229 ITR 383(SC), the additional ground raised by the assessee is hereby admitted and taken up for adjudication.
Ground no. 4 is against the levy of tax u/s 115BBE of the Act, in respect of addition of Rs. 75,00,000/- added u/s 69A of the Act. The assessee has assailed applying of amended provisions of section 115BBE of the Act levying tax @ 60% on the assessed income for A.Y. 2017-18. The Hon’ble Madras High Court in the case of SMILE Microfinance Ltd. vs. ACIT, WP (MD) No.2078 of 2022 vide order dated 19.11.2024 has held that amendment to section 115BBE of the Act by the Taxation Laws (Second Amendment) Act, 2016 w.e.f. 01.04.2017 would come into effect from 01.04.2017 i.e. relevant to AY 2018-19 onwards. Thus, in the impugned assessment year the un-amended provisions of section 115BBE of the Act would apply in respect of the addition of Rs. 37.5 lakhs upheld by the Co-ordinate Bench of the Tribunal vide its order dated 31.07.2025.
In the result, the additional ground of appeal is allowed.