"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘H’: NEW DELHI BEFORE SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER B.M.A. Nos.20 to22/Del/2025 (Assessment Years: 2015-16, 2017-18 & 2018-19) Addl. Commissioner of Income Tax, Central Range-8, Room No. 313, 3rd Floor, ARA Centre, Jhandewalan Extension, Delhi-110055 v. Tahiliani Design Pvt. Ltd. D-25, 1st Floor,Defence Colony, New Delhi-110024 [PAN: AABCT7453L] (Appellant) (Respondent) Assessee by Sh.Gaurav Jain, Adv., Sh. Subham Gupta, Adv., and Ms. Varsha Sharma, Adv. Department by Sh.S. K. Jadhav, CIT-DR Date of Hearing 29.04.2026 Date of Pronouncement 24.07.2026 ORDER PER Bench: These three appeals filed by Revenue have arisen from the common appellate order dated 15.07.2025 passed by the learned Commissioner of Income Tax (Appeals)- 31, New Delhi [CIT(A), in short] u/s 15 of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015(hereinafter called ‘ the 2015 Act’) for the impugned Assessment Years: 2015-16, 2017-18 and 2018-19 (DIN No. ITBA/APL/M/2025-26/1078576793(1) ). Printed from counselvise.com 2 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. 2. Grounds of appeal raised by Revenue in its appeal filed with the Income Tax Appellate Tribunal in BMA No. 20/Del/2025 for assessment year: 2015-16, reads as under:- “i). That on the facts and in the circumstances of the case, the learned CIT(A) erred in law and on facts in deleting the addition of Rs. 11,35,975/- made by the AO under the provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. ii) That the CIT(A) failed to appreciate that the undisclosed foreign receipts in question were not disclosed by the assessee as required under the BMA, 2015, and the conditions of Section 4 and Section 5 of the said Act were duly satisfied for taxation under the BMA. iii) That the learned CIT(A) erred in holding that the income had already been settled by the Settlement Commission under the Income-tax Act and hence could not be taxed under the Black Money Act, ignoring that the scope and objective of the BMA are distinct and apply independently to undisclosed foreign assets/income. iv) That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law. v) That the grounds of appeal are without prejudice to each other. vi) That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either before or at the time of hearing of the appeal.” 2.2 Grounds of appeal raised by Revenue in its appeal filed with the Income Tax Appellate Tribunal in BMA No. 21/Del/2025 for assessment year: 2017-18, reads as under:- “i). That on the facts and in the circumstances of the case, the learned CIT(A) erred in law and on facts in deleting the addition of Rs. 46,66,440/- made by the AO under the provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 without restricting the said addition to Rs. 39,66,440/-. ii). That the CIT(A) failed to appreciate that the undisclosed foreign receipts in question were not disclosed by the assessee as required under the BMA, 2015, and the conditions of Section 4 and Section 5 of the said Act were duly satisfied for taxation under the BMA. iii). That the learned CIT(A) erred in holding that the income had already been settled by the Settlement Commission under the Income-tax Act and hence could not be taxed under the Black Printed from counselvise.com 3 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. Money Act, ignoring that only partial addition has been confirmed by Settlement Commission which leads to leakage of taxation on undisclosed foreign income not accessed by Settlement commission. iv). Ld. CIT(A) erred in not considering that incriminating email shared between employees of assessee company having details of foreign caslı sale amounting to Rs. 46,66,440/-on various dates which also have details of Rs. 7 lakhs received on 31.12.2016, which is corroborated by whatsapp chat of assessee's accounts head which have details of Rs. 7 lakh received on 31.12.2016 which confirms the unaccounted foreign cash sale received through hawala. v). Ld.CIT(A) erred in relying on Section 4(2) of BM Act, 2015 without considering that balance addition of Rs. 39,66,440/- has not been accessed in Income Tax Act also, thus, there is no double taxation in the hands of assessee for amount of Rs. 39,66,440/-. vi) That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law. vii). That the grounds of appeal are without prejudice to each other. viii) That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either before or at the time of hearing of the appeal.” 2.3 Grounds of appeal raised by Revenue in its appeal filed with the Income Tax Appellate Tribunal in BMA No. 22/Del/2025 for assessment year: 2018-19, reads as under: “i). That on the facts and in the circumstances of the case, the learned CIT(A) erred in law and on facts in deleting the addition of Rs. 1,23,82,520/- made by the AO under the provisions of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. ii) That the CIT(A) failed to appreciate that the undisclosed foreign receipts in question were not disclosed by the assessee as required under the BMA, 2015, and the conditions of Section 4 and Section 5 of the said Act were duly satisfied for taxation under the BMA. iii). That the ld. CIT(A) erred in holding that the income had already been settled by the Settlement Commission under the Income Tax Act and hence could not be taxed under the Black Money Act, ignoring that the scope and objective of the BMA are distinct and apply independently to undisclosed foreign assets/income. iv) Ld. CIT(A) failed to consider that appellant did not furnish documentary evidences and parties confirmation against sales return and documentary evidences in support of sales return reflecting in ERP of appellant. Printed from counselvise.com 4 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. v) Ld. CIT(A) failed to consider that incriminating email and whatsapp chat found during course of search action corroborates the modus operandi of engaging in unaccounted foreign sale in cash and bringing such cash receipts in India. vi). That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law. vii). That the grounds of appeal are without prejudice to each other. viii) That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either before or at the time of hearing of the appeal.” 3. First , we will take up appeal of the Revenue for assessment year 2018-19 vide BMA No. 22/Del/2025. The brief facts of the case are that the assessee filed its return of income for the impugned assessment year 2018-19 , having income arising from Profit and Gains from business or profession, wherein turnover of Rs. 69,25,62,481/- and Gross Total Income of Rs. 6,45,22,100/- were declared by the assessee. A search and seizure operations u/s 132 of the Income-tax Act, 1961(hereinafter called “the 1961 Act”) was carried out by Revenue in the case of the assessee , on 29.05.2018. Notice u/s 10(1) of the 2015 Act was issued by the AO to the assessee, on 31.03.2022. During the course of search , several incriminating documents were found by Revenue which , inter-alia, as per Revenue evidences that the assessee has made sales outside India during the year under consideration, and the income was not declared in the return of income filed by the assessee with the Revenue. The assessee is admittedly tax resident in India. Assessment proceedings under the 2015 Act were initiated by the AO against the assessee, and notice u/s 10(1) of the 2015 Act was issued by the AO to the assessee on 31.03.2022, wherein assessee was called upon by the AO to file certain details and evidences. The assessee Printed from counselvise.com 5 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. participated in assessment proceedings , and submitted required details. SCN dated 06.03.2024 was issued by the AO to the assessee, asking assessee to show cause as to why an amount of Rs. 1,23,82,520/- , being the undeclared proceeds from the sales made by the assessee outside India during the year, be not treated as total undisclosed foreign income and asset of the assessee for the previous year 2017-18(ay:2018-19) u/s 3 read with Section 4 of the 2015 Act. The assessee submitted in response to the aforesaid SCN issued by the AO, that the notice issued u/s 10(1) of the 2015 Act is barred by limitation as once proceedings under the 1961 Act is initiated against the assessee, then proceedings under the 2015 Act cannot be reinitiated/ reinvestigated . The assessee relied upon provisions of Section 4(2) of the 2015 Act. The assessee also claimed before the AO that the undisclosed income of the assessee has already been assessed , vide order of Settlement Commission dated 28.02.2023 passed u/s 245D(4) of the 1961 Act. The AO rejected the contentions of the assessee on the grounds that the assessee has not produced any evidence to substantiate that the aforesaid amount of foreign income of Rs. 1,23,82,520/- was offered for taxation in its return of income and/or that the said income has been brought to tax owing to assessment or reassessment , or has already been brought to Income-tax under the 1961 Act. As per AO, there is no evidence that the aforesaid income was added to the total income of the assessee. As per AO , Merely because settlement commission has alluded the foreign transactions while bringing to tax some of these transactions, it could not be said that the foreign income sought to be assessed in the present assessment already stands assessed. The AO observed that Printed from counselvise.com 6 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. provisions of the 2015 Act are independent of the 1961 Act., in terms of applicability to the global income of a resident tax payer. As per AO , undisclosed foreign income , after the promulgation of the 2015 Act, falls in the domain of the assessment under the 2015 Act. The AO also rejected the contentions of the assessee that notice issued u/s 10(1) of the 2015 Act was barred from limitation owing to delays beyond reasonable time after relevant information came to the possession of the Revenue authorities. As per AO , no time limit has been specified in 2015 Act to issue notice u/s 10(1) of the 2015 Act, and the guidelines dated 23.01.2018 issued by CBDT was merely a recommendation as it stipulates that the notice may preferably be issued within 30 days from the end of the year in which the information is received by the AO, and the same is not to be construed as a time limitation placed by law on the notice to be issued u/s 10(1) of the 2015 Act. On merits , the assessee submitted that all the sales made in exhibition were duly recorded in books of accounts, and the assessee submitted reconciliation statement. The AO rejected the same by observing that the assessee has claimed to have received cash against sales in exhibition, which the assessee has claimed to have brought to India otherwise through banking channels i.e. through Hawala. Further , as per AO, the assessee has not been able to reconcile the ledgers with its financial statements. As per AO the entries of exhibition sales recorded in the ledger of Sh. Chirag Batra do not match with the foreign currency entries. Further, as per AO, the entries are either missing completely or reconciled by way of splitting ledger entries. As per AO, it could not be shown by the assessee that the transactions are recorded in ERP. The ledger could not be connected by the assessee with Printed from counselvise.com 7 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. the financial statements. The AO further observed that emails and whatsapp chats found during search operations clearly revealed that the assessee receives cash in lieu of sales made outside India. With respect to sales returns, it was submitted by the assessee that the sales returns of Rs. 1,23,82,520/- are duly recorded in books of accounts which are duly supported by bill of entry no. 5460635 dated 05.03.2018 worth Rs.1,18,16,667/- . The assessee also submitted that no incriminating material has been found with respect thereto during the course of search operations conducted by Revenue on 29.05.2018 .It was submitted that sales returns were duly recorded in books of accounts.The AO rejected the contentions of the assessee as the entries were made to counter the cash received from Mr. Chirag Batra and his employees which was not recorded in books of accounts. As per AO, the ledger account submitted by the assessee in its support is an isolated documents not bearing any link to the financial statements. The assessee has not provided any cancelled invoice in the ERP system nor any confirmation from the parties from whom sales return has been made. The AO relying on emails and whatsapp chats, held that the assessee is in habit of taking cash outside India . Thus, as per AO , it is clear that sales returns are made against cash received outside India, which have not been recorded in the books of accounts. Further, as per AO, the sales return in cash through Hawala modus is a direct suppression of turnover and amounts to non-disclosure of foreign income under the 2015 Act. The AO referred to various provisions of 2015 Act, and held that the amount of Rs. 1,23,82,520/- is the undisclosed foreign income and asset Printed from counselvise.com 8 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. of the assessee, which is to be brought to tax under the provision of Section 3 of the 2015 Act, vide assessment order dated 31.03.2024 passed by the AO u/s 10(3) of the 2015 Act. 4.Aggrieved, the assessee filed first appeal with ld. CIT(A), who allowed the appeal filed by the assessee, by observing that the income of Rs. 1,23,82,520/- has already been considered and subjected to Income-tax under the 1961 Act as a business income under the provisions of Section 29 to 43C of the 1961 Act pertaining to profits and gains of business or profession, vide order dated 28.02.2023 passed by the Settlement Commission u/s 245D(4) of the 1961 Act, and the same income cannot be brought to tax again under the 2015 Act , keeping in view provisions of Section 4(2) and 4(3) of the 2015 Act. The ld. CIT(A) also referred to provisions of Section 5(1)(ii) of the 2015 Act, which stipulates that if a foreign asset has been acquired out of income already assessed to tax under the 1961 Act or otherwise assessable under 2015 Act, such income shall be reduced from the value of the assets while computing tax under 2015 Act. The ld. CIT(A) observed that the scheme of the 1961 Act and the 2015 Act reflects the legislative intent to prevent double taxation of the same income or asset under the said statutes. The ld. CIT(A) observed that Settlement Commission has already considered the aforesaid income vide order dated 28.02.2023 passed u/s 245D(4) of the 1961 Act , and additions made by the AO under the 2015 Act is not sustainable as the same tantamount to double additions, which is impermissible. Thus, the ld. CIT(A) ordered for the deletion of the aforesaid income as it led to double addition. Since, the ld. CIT(A) decided this primary Printed from counselvise.com 9 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. ground, the remaining grounds raised by the appellant were not adjudicated by ld. CIT(A) being academic in nature , which as per ld. CIT(A) do not required separate adjudication. 5. Now, it was the turn of the Revenue to be aggrieved, and the Revenue has filed an appeal with the Tribunal. Heard both the rival parties. 6. We have considered rival contentions and perused the material available on record. Brief facts of the case are that the assessee is a Private Limited Company engaged in the business of manufacturing of designer garments and designing of homes. The assessee is a tax resident in India. The assessee filed return of income for the impugned assessment year , on 03.10.2018 , having declared income from ‘Profits and Gains from business or profession’, declaring total turnover of Rs. 69,25,62,481/- and gross total income of Rs. 6,45,22,100/- 6.2 There was a search and seizure operations conducted by Revenue u/s 132 of the 1961 Act, on 29.05.2018, at the various residential and business premises of Shri Tarun Tahiliani and cash of Rs. 35,24,000/- was seized by the Revenue. The assessee was also covered under the aforesaid search and seizure operations conducted by Revenue u/s 132 of the 1961 Act. As per Revenue, various incriminating material were found and seized during the course of search and seizure operations carried on by Revenue u/s 132 on 29.05.2018 which, inter-alia, include seized material evidencing that the assessee has made sales outside India during the year and the income there from was not declared in the return of income filed by the assessee with the department. Notice u/s 153A of the Printed from counselvise.com 10 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. 1961 Act was issued by the AO to the assessee on 10.10.2019 for the impugned assessment year, to make assessments pursuant to search conducted by Revenue u/s 132 against the assessee on 29.05.2018 . 6.3.1 Thereafter, the assessee filed settlement application for assessment years 2012-13 to 2019-20 u/s 245C(1) with Settlement Commission on 01.11.2019, offering additional income of Rs. 2,61,16,340/- before the Settlement Commission for assessment years 2012-13 to 2019-20 , detailed as hereunder:- ( In Rupees) A.Y. Income returned Additional Income Offered Total Income 2012-13 3,59,88,995/- 1,12,50,000/- 4,72,38,995 2013-14 3,47,02,300 -11,25,000 3,35,77,300 2014-15 3,89,78,550 -10,12,500 3,79,66,050 2015-16 4,93,19,600 -9,11,250 4,84,08,350 2016-17 4,58,52,060 -7,20,125 4,51,31,935 Printed from counselvise.com 11 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. 2017-18 1,74,25,550 1,53,11,887 3,27,37,437 2018-19 6,45,22,100 27,90,699 6,73,12,799 2019-20 4,68,09,600 5,32,629 4,73,42,229 Total 33,35,98,755 2,61,16,340 35,97,15,095 6.3.2 Settlement Commission allowed application filed by the assessee u/s 245C(1) of the 1961 Act to be proceeded with vide orders dated 11.11.2019 passed u/s 245D(1) of the 1961 Act. Subsequently, the application was held as “not invalid” by the Settlement Commission vide orders dated 27.12.2019 passed u/s 245D(2C) of the 1961 Act. The ld. PCIT(Central 3), New Delhi submitted Rule 9 report dated 19.03.2020 before Settlement Commission. The assessee also filed reply dated 09.07.2020 before Settlement Commission. The case was posted for hearing before Settlement Commission u/s 245D(3) and 245D(4) of the 1961 Act, on 20.10.2020. Both parties were heard by Settlement Commission. The ld. CIT-DR during the aforesaid hearing pointed out that issues raised in Rule 9 report requires verification. The Settlement Commission after considering Rule 9 report, contentions of both the parties and records, directed ld. PCIT (Central-3), New Delhi to cause verification u/s 245D(3) of the 1961 Act, inter-alia, for Printed from counselvise.com 12 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. verification of claim of the assessee that all sales are duly accounted for in books of accounts as also for verification of reasons of very low NP/GP as compared to this line of business in market. The Joint verification report was received by Settlement Commission from ld. PCIT(Central-3) , New Delhi on 07.1.2021. The assessee filed its further submissions on 03.11.2022 in response to aforesaid joint verification report. The case was posted for hearing before Settlement Commission u/s 245D(4) of the 1961 Act, on 13.12.2022, wherein both the parties were heard by Settlement Commission. 6.3 In the meantime, the AO issued notice dated 31.03.2022 u/s 10(1) of the 2015 Act to the assessee , to frame assessment u/s 10(3) of the 2015 Act. It is not the case of any of the rival parties before us that the notice earlier issued by the AO to the assessee u/s 153A of the 1961 Act, dated 10.10.2019 to frame search assessment , was withdrawn by Revenue. The AO vide its notice dated 31.03.2022 u/s 10(1) of the 2015 Act required assessee to furnish information and documents related to the following accounts:- “a) Details/quantum of product sent to abroad for exhibition. b) Details/quantum of products sold the foreign exhibition. c) details of income arised from the foreign sales/exhibition. d) Bank account statements with narration of credit entries e) Details of all assets fixed and financial held outside India.” 6.4. The assessee participated in the assessment proceedings conducted by the AO under the 2015 Act, and submitted the details called for by the AO , vide reply dated Printed from counselvise.com 13 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. 31.08.2022. After considering the submissions of the assessee, the AO issued SCN dated 06.03.2024 to the assessee, show causing assessee as to why an amount of Rs. 1,23,82,520/- being the undeclared proceeds from the sales made by the assessee outside India during the year, be not treated as total undisclosed foreign income and asset of the assessee for the previous year 2017-18(ay:2018-19) u/s 3 read with Section 4 of the 2015 Act. In the meantime, Settlement Commission had already passed an order dated 28.02.2023 u/s 245D(4) of the 1961 Act, and the assessment years covered under the aforesaid orders were for assessment years 2012-13 to 2019-20. In the said order , the Settlement Commission with respect to the allegation of the Revenue that Rs.1,23,82,520/- being the undeclared proceeds from the sales made by the assessee outside India during the impugned assessment year, observed as under: “ 3.1 **** Similarly, in the case of exhibition held in New Jersey and Los Angeles, out of total sales of Rs. 3,65,06,732/- made to Chirag, Only Rs. 66,78,894/- have been received through banking channel , an amount of Rs. 2,41,24,212/- is outstanding as on 29.05.2018 (date of search) and an amount of Rs. 1,23,82,520/- has been shown as sales returns. The Department contended that the sales return is nothing, but cash received by the applicant and its employees from Chirag. However, the Department has enclosed incriminating evidences of only two transactions indicating that the amount was received through hawala vide emails/whatsapp chats. These amounts of Rs. 26,00,000/- in total i.e. on 05.06.2017-Rs. 19,00,000/- and on 31.12.2016 –Rs. 7,00,000/- . Accordingly , a further addition of Rs. 7,00,000/- pertaining to AY 2017-18 and Rs. 19,00,000/- pertaining to AY 2018-19 totaling to Rs. 26,00,000/- is made on this account. This shall be added to the total income of the appellant over and above the offer made in the settlement application.” Printed from counselvise.com 14 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. 6.4 The Settlement Commission vide its aforesaid order dated 28.02.2023 passed u/s 245D(4) of the 1961 Act , granted immunity from penalty and prosecution to the assessee , by observing as under: “ Immunity from penalty and prosecution 8. The applicant company has prayed for grant of immunity from levy of penalty and prosecution . The applicant company has co-operated in the settlement proceedings. It has disclosed all the facts, material to the computation of additional income. Thus, the applicant company has fully satisfied the provisions of Section 245H. The overall additional income is not on account of any suppression of any material facts in the application. The additional income offered does not disclose any variance from the manner in which the additional income had been earned. Hence, the applicant company is entitled to immunity from penalty under the Income-tax Act for the assessment years which are settled in this order.For the same reasons , we also grant immunity from prosecution under the Income-tax Act to the applicant company for the assessment years which is settled in this order.” 6.5 Thus, as could be seen from the aforesaid order of settlement commission, that it duly considered sales return of Rs. 1,23,82,520/- vide its order dated 28.02.2023 passed u/s 245D(4) of the 1961 Act, which is now subject matter of dispute between rival parties with respect to proceedings under the 2015 Act , for the impugned assessment year. The assessee has already claimed the said sales returns as being duly accounted for in books of accounts supported by bill of entry , and was part of its income offered to tax under the head ‘Profits and Gains of Business or Profession’. The Settlement Commission brought to tax additional income over and above declared by the assessee in its application dated 01.11.2019 filed with Settlement Commission, an amount of Rs. 7,00,000/- for assessment year 2017-18 and Rs. 19,00,000/- for the impugned assessment year 2018-19. Printed from counselvise.com 15 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. This income was also held by Settlement Commission to be also arising from sales during exhibition held at New Jersey and Chicago , being made to Mr. Chirag Batra, for which payments were received by assessee through Hawala. i.e. otherwise through banking channels based on the incriminating material brought on record by Revenue before Settlement Commission. Thus, this additional income of Rs. 19,00,000/- for the impugned assessment year is also brought to tax by Settlement Commission as income under the head ‘ Profits and Gains of business or profession’ i.e. within Section 29 to 43C of the 1961 Act, vide order dated 28.02.2023 passed by Settlement Commission u/s 245D(4) of the 1961 Act. The assessee has filed copy of order dated 28.02.2023 passed by Settlement Commission u/s 245D(4) of the 1961 Act , which is placed on record in file. Coming back, the assessee had duly participated in the assessment proceedings before the AO as well ld. CIT(A) conducted under the provisions of 2015 Act, and submitted that the said sales returns to the tune of Rs. 1,23,82,520/- are duly supported by Bill of Entry No. 5460635 dated 05.03.2018 worth Rs. 1,18,16,667/- . The same contentions were raised before Settlement Commission. The assessee also raised contentions before the authorities below that the said amount of said sales return to the tune of Rs. 1,23,82,520/- has duly being subjected to income-tax vide order of Settlement Commission dated 28.02.2023 passed u/s 245D(4) of the 1961 Act, and by virtue of Section 4(2) and 4(3) of the 2015 Act, the same cannot be brought to tax again under the 2015 Act once it has already being subjected to tax under the provisions of 1961 Act, otherwise it will lead to double taxation of the same income. The said provisions of Section 3 and 4 of the 2015 Act , reads as under:- “Section 3. Charge of tax. (1) There shall be charged on every assessee for every assessment year commencing on or after the 1st day of April, 2016, subject to the provisions of this Act, a tax in respect of his total undisclosed foreign income and asset of the previous year at the rate of thirty per cent. of such undisclosed income and asset: Printed from counselvise.com 16 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. Provided that an undisclosed asset located outside India shall be charged to tax on its value in the previous year in which such asset comes to the notice of the Assessing Officer. (2) For the purposes of this section, \"value of an undisclosed asset\" means the fair market value of an asset (including financial interest in any entity) determined in such manner as may be prescribed.” “Section 4. Scope of total undisclosed foreign income and asset. (1) Subject to the provisions of this Act, the total undisclosed foreign income and asset of any previous year of an assessee shall be,— (a) the income from a source located outside India, which has not been disclosed in the return of income furnished within the time specified in Explanation 2 to sub- section (1) or under sub-section (4) or sub-section (5) of section 139 of the Income-tax Act; (b) the income, from a source located outside India, in respect of which a return is required to be furnished under section 139 of the Income-tax Act but no return of income has been furnished within the time specified in Explanation 2 to sub- section (1) or under sub-section (4) or sub-section (5) of section 139 of the said Act; and (c) the value of an undisclosed asset located outside India. (2) Notwithstanding anything contained in sub-section (1), any variation made in the income from a source outside India in the assessment or reassessment of the total income of any previous year, of the assessee under the Income-tax Act in accordance with the provisions of section 29 to section 43C or section 57 to section 59 or section 92C of the said Act, shall not be included in the total undisclosed foreign income. (3) The income included in the total undisclosed foreign income and asset under this Act shall not form part of the total income under the Income-tax Act.” Section 3 of 2015 Act is a charging section which stipulates that there shall be charged on every assessment year commencing on or after 1st day of April, 2016 , subject to provisions of the 2015 Act, a tax in respect of his total undisclosed foreign income and asset of the previous year at the rate of thirty percent of such undisclosed income and assets, and then it stipulates manner of computation of undisclosed asset located outside Printed from counselvise.com 17 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. India. Section 4(1) of the 2015 Act stipulates scope of undisclosed foreign income and asset that subject to the provisions of the 2015 Act, the total undisclosed foreign income and asset of any previous year of an assessee shall be the income from a source located outside India , which has not been disclosed in the return of income furnished within the time specified in Explanation 2 to Section 139(1) or u/s 139(4) or u/s 139(5) of the 1961 Act, or if no return of income has been furnished , the income, from a source located outside India , in which return of income is required to be filed but which has not been furnished within the time specified in Explanation 2 to Section 139(1) or u/s 139(4) or u/s 139(5) of the 1961 Act. Further, Section 4(1) of the 2015 Act stipulates the scope of total undisclosed asset to be value of an undisclosed asset located outside India. Section 4(2) starts with non obstante clause and stipulates that notwithstanding any thing contained in Section 4(1) of the 2015 Act, any variation made in the income from a source outside India in the assessment or reassessment of the total income of any previous year, of the assessee under the 1961 Act in accordance with the provisions of section 29 to section 43C or section 57 to section 59 or section 92C of the 1961 Act, shall not be included in the total undisclosed foreign income under the provisions of 2015 Act. Similarly Section 4(3) of the 2015 Act stipulates that the income included in the total undisclosed foreign income and asset under the 2015 Act shall not form part of the total income under the 1961 Act. 6.6 Thus, the condition as specified u/s 4(2) of the 2015 Act stood met in the instant case as there is variation in computation of income vide order dated 28.02.2023 passed by Settlement Commission u/s 245D(4) of the 1961 Act , and the same was brought to income-tax under the head ‘Profits and Gains of Business or Profession’ within Section 29 to 43C of the 1961 Act vide order dated 28.02.2023 passed by Settlement Commission u/s 245D(4), and hence the said income which has already suffered taxation vide order dated 28.02.2023 cannot be brought to tax once again under the 2015 Act vide Section 4(2) and 4(3) of the 2015 Act , otherwise it will lead to double taxation firstly under the Printed from counselvise.com 18 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. 1961 Act and secondly under the 2015 Act, which is not permissible keeping in view provisions of Section 4(2) and 4(3) of the 2015 Act .It is pertinent to mention that vide Section 245I of the 1961 Act, the Order of Settlement Commission passed u/s 245D shall be conclusive , as to the matters stated therein and no matter covered by such order shall, save as otherwise provided in the Chapter XIX-A of the 1961 Act, be reopened in any proceedings under the 1961 Act or any other law for the time being in force. It is not the case of any of the rival parties before us that the said order dated 28.02.2023 passed by Settlement Commission u/s 245D(4), has been declared void by Settlement Commission u/s 245D(6) of the 1961 Act, being obtained by fraud or misrepresentation of facts. It is also not the case of any of the rival parties before us that the aforesaid said order dated 28.02.2023 u/s 245D(4), has been quashed and/or modified by Superior Courts. It is also not the case of any of the rival parties before us that notice issued by the AO u/s 153A of the 1961 Act , dated 10.10.2019 to the assessee in order to frame search assessment, was withdrawn by Revenue. 6.7 Thus, keeping in view of the express provision of the 2015 Act as aforesaid viz. Section 4(2) and 4(3) of the 1961 Act, we are of the considered view that ld. CIT(A) vide orders dated 15.07.2025 passed u/s 15 of the 2015 Act has rightly deleted the additions as were made by the AO vide assessment orders dated 31.03.2024 passed u/s 10(3) of the 2015 Act. It is pertinent to mention that vide Section 245A(b), the ‘case’ means any proceedings for assessment under the 1961 Act , of any person in respect of any assessment year or years which may be pending before an AO on the date on which application u/s 245C(1) is made. The assessee in the instant case made an application u/s 245C(1) on 01.11.2019, before Settlement Commission. The AO earlier issued notice u/s 153A on 10.10.2019 to the assessee for the impugned assessment year, initiating proceedings in order to frame search assessment pursuant to search conducted by Revenue against the assessee u/s 132 of the 1961 Act, on 29.05.2018 .Explanation (iiia) to Section 245A , inter-alia , stipulates that the proceedings for assessment or Printed from counselvise.com 19 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. reassessment for any of the assessment years, referred to in clause (b) of sub-section (1) of Section 153A in the case of person referred to in Section 153A , shall be deemed to have commenced on the date of issue of notice initiating such proceedings and concluded on the date on which the assessment is made. Further, First proviso to Section 245F(2) of the 1961 Act stipulates that where an application is filed under section 245C of the 1961 Act after 1st June 2007, the Settlement commission has exclusive jurisdiction from the date on which the application is made , upto the date on which the application is rejected , or not allowed to be proceeded with, or , declared invalid ,as the case may be. It is not the case of any of the rival parties before us that the said notice u/s 153A was withdrawn by Revenue. This leave no matter of doubt that proceedings before Settlement Commission are an assessment proceedings to compute the income of the assessee chargeable to tax, where in the income is computed through the process of settlement. Thus, Section 4(2) of 2015 Act refers to assessment or reassessment proceedings and , inter-alia, to variation in income in accordance with provisions of Section 29 to 43C, which in our considered view the income arrived at through the process of settlement is covered being one of the modes to frame assessment through statutory process of settlement , and will be covered by Section 4(2) of the 2015 Act . Thus, once Settlement Commission has considered the income and brought the same to tax of the nature covered , inter-alia, within ambit of provisions of Section 29 to 43C in the instant case as detailed above in this order, and the same has attained finality, then it will oust the jurisdiction of Revenue to bring the same income chargeable to tax within the ambit of 2015 Act. Thus, in the instant case, it is clearly demonstrated that the Settlement Commission duly considered the sales return to the tune of Rs. 1,23,82,520/- and brought to tax the same , as well additional income computed therein and accordingly brought to tax by Settlement Commisison of income of Rs. 19,00,000/- over and above already offered to tax by the assessee for the impugned assessment year and that too under the head ‘Profits and Gains of Business or Profession’ being received through Hawala based wrt sales return based on incriminating Printed from counselvise.com 20 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. material produced by Revenue (Total additional income with respect thereto brought to tax Rs. 26,00,000/- by Settlement Commission, out of which Rs. 7,00,000/- being chargeable to tax for assessment year 2017-18, while the assessee has claimed to have offered to tax by incorporating in the books of accounts and declared in the return of income , the entire sales returns to tune of Rs. 1,23,82,520/-), while passing the order dated 28.02.2023 u/s 245D(4) , the same income cannot be brought to tax within ambit of 2015 Act once again keeping in view provisions of Section 4(2) and 4(3) of the 2015 Act. The assessee has rightly referred to and relied upon the judgment and order(s) of Hon’ble Gujarat High Court in the case of PCIT v. Income Tax Settlement Commission , reported in (2019) 420 ITR 149(Guj. HC) .Thus, we uphold the order of ld. CIT(A) deleting the aforesaid additions as were made by the AO. Revenue fails in its appeal. We order accordingly. 7. In the result appeal filed by Revenue in BMA No 22/Del/2025 for assessment year 2018-19 stands dismissed. 8. Since the facts in assessment year(s) 2015-16 and 2017-18 are similar to the facts in ay:2018-19, our decision in aforesaid para’s of this order for assessment year 2018-19 shall apply mutatis mutandis to assessment year 2015-16 and 2017-18. However, for the sake of completeness, we are elucidating the issues in these two years. For assessment year 2015-16, the assessment has been framed u/s 10(3) of the 2015 Act by the AO on the grounds that there being undeclared proceed from the sales made by the assessee to the tune of Rs. 11,35,975/- outside India during exhibition organized by the assessee in Hongkong through its Agent namely Mrs. Sunita Vachani. The assessee contended that the sales made during said exhibition was Rs. 5,90,369/- . The AO observed that sales made were to the tune of Rs. 17,19,055/- , while Rs. 11,35,975/- was reversal of sales which is nothing but non-genuine entry made to adjust the cash received on account of said sales. The ld. CIT(A) deleted the addition. The Settlement Commission vide its order Printed from counselvise.com 21 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. dated 28.02.2023 passed u/s 245D(4) has brought to tax additional income to the tune of Rs. 16,43,577/- over and above the income offered to tax by the assessee in its application filed with Settlement Commission u/s 245C(1) on 01.11.2019. The said additional income is with respect to Hong Kong Exhibition conducted by the assessee through its agent Mrs. Sunita Vachani. The Settlement Commission observed that based on incriminating material available on record payments totaling to Rs. 16,43,577/- was received through Hawala transactions , and represents undisclosed sales not offered for tax by the assessee. Thus, Settlement Commission held the same to be undisclosed sales, thus, consequently these will become part of income chargeable to tax under the head “Profits and Gains of Business or Profession’. This will oust the jurisdiction of the AO to bring the same to tax once again under the 2015 Act as the same has suffered taxation under the 1961 Act vide order dated 28.02.2023 passed by Settlement Commission u/s 245D(4) for assessment year 2015-16, in the midst of Section 4(2) of the 2015 Act. Similarly for assessment year 2017-18, the assessment has been framed u/s 10(3) of the 2015 Act by the AO on the grounds that there being undeclared proceed from the sales made by the assessee to the tune of Rs. 46,66,440/- outside India .The assessee contended that the cash received of Rs. 1,05,02,355/- being cash received from sales made during exhibition outside India is duly recorded in the books of accounts of the assessee. The AO observed that the exhibition sales recorded in ledger of Sh. Chirag Batra do not match with the foreign currency entries .Further, the entries are either missing completely or reconciled by way of splitting of ledger entries. It could not be shown that whether transactions produced in the books of accounts are recorded in the ERP.The payments have not been received through banking channel. There were incriminating material vide emails and whatsapp chats. The ld. CIT(A) deleted the addition. The Settlement Commission vide its order dated 28.02.2023 passed u/s 245D(4) has brought to tax additional income to the tune of Rs. 7,00,000/- ( total addition with respect thereto of exhibition outside India through Mr. Chirag Batra were to the tune of Rs. 26,00,000/- , Printed from counselvise.com 22 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. out of which Rs. 19,00,000/- were brought to tax by Settlement Commission for assessment year 2018-19) over and above the income offered to tax by the assessee in its application filed with Settlement Commission u/s 245C(1) on 01.11.2019, for the assessment year 2017-18 based on material brought on record by Revenue. This income of Rs. 7,00,000/- was also held by Settlement Commission to be also arising from sales during exhibition held at New Jersey and Chicago , being made to Mr. Chirag Batra, for which payments were received by assessee through Hawala. i.e. otherwise through banking channels based on the incriminating material brought on record by Revenue before Settlement Commission. Thus, this additional income of Rs. 7,00,000/- for the impugned assessment year 2017-18 is also brought to tax by Settlement Commission by holding sales proceed received through Hawala , which will become part an income under the head ‘ Profits and Gains of business or profession’ i.e. within Section 29 to 43C of the 1961 Act, vide order dated 28.02.2023 passed by Settlement Commission u/s 245D(4) of the 1961 Act , by treating the same as sale proceeds during foreign Exhibition received from Shri Chirag Batra being brought to India through Hawala .This will oust the jurisdiction of the AO to bring the same to tax once again under the 2015 Act as the same has suffered taxation under the 1961 Act vide order dated 28.02.2023 passed by Settlement Commission u/s 245D(4) for assessment year 2017-18, in the midst of Section 4(2) of the 2015 Act. In the result, appeals of the Revenue in BMA No. 20 & 21/Del/2025 for assessment years 2015-16 and 2017-18 stand dismissed 9.In the result all the three appeals filed by Revenue in BMA No 20-22/Del/2025 for assessment years 2015-16, 2017-18 and 2018-19 stands dismissed. order is pronounced in the Open Court on 24.07.2026 S Sd/- Sd/- S S(ANUBHAV SHARMA) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Printed from counselvise.com 23 BMA Nos.20to22/Del/2025 Tahiliani Design P Ltd. Dated: 24.07.2026 *GP/Sr.PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(E) 4. CIT 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Printed from counselvise.com "