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TMI Blog2006 (7) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn declaring total income of Rs. 12,91,530, which was processed under section 143(1) on 25-2-2003 and the necessary intimation was sent to the assessee. On the perusal of the assessment records it was noticed by the Assessing Officer that the assessee had received income of Rs. 12,50,000 under a TV programme Kaun Banega Crorepati (hereinafter called KBC). It was observed that such income was taxable at the flat rate of 40 per cent under section 115BB read with section 2(24) instead of normal rate of taxation as applied by the assessee. Notice under section 154 was issued in which the assessee claimed that the prize was won due to the indepth knowledge and skill etc. Not convinced, the Assessing Officer charged the tax at the rate of 40 per cent on the total receipt of Rs. 12,50,000. In the first appeal the learned CIT(A) overturned the action of the Assessing Officer. 3. Before us it was strenuously argued by the learned Departmental Representative that the winning of prize from KBC was a sort of lottery inasmuch as it was a question of sheer luck to get selected to the Hot Seat of KBC and won the prize. It was further stated that one out of thousands was called for participat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was earned on 6th January, 2001. He also gave a note in his computation of income, as per pp. 7 and 8 of the paper book, to the effect that he is a chemical engineer (top ranker) and the amount was earned from the participation in KBC after a rigorous preparation and study and hence it was shown as normal income subject to tax as per the regular rates of tax in force. The Assessing Officer, in rectification proceedings under section 154 opined that section 115BB was applicable and the amount was liable to be taxed at the rate of 40 per cent as stipulated in the section. 6. It has been vehemently argued by the learned Departmental Representative that the amount in question is in the nature of "lottery" and hence covered under this section. It has been emphasized that the winning in this game is the result of luck and it is not possible to participate in the game without the luck smiling on a person. We are not convinced with this argument because the winning is not attached to participation in the programme alone. It is true that it is a question of luck to get selected for participation in the game, but the prize is not attached to mere participation. The question of winning a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of tax in special cases. In this set of sections we find the placement of section 115BB, as per which tax on winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or betting of any form or nature whatsoever was charged at 40 per cent at the material time. There is no dispute about the legal position that the special provision always overrides general provision and holds the field when it is attracted in superiority to the general provision. But before bringing an item of income within its sweep, it has to be established that the concerned income strictly falls in its ambit. An item of income can be brought within the general or special provision only when it is covered within the controlling section 2(24) which defines income subject to the other provisions of the Act. Adverting to the facts of the case we find that section 115BB under scanner, is a special provision taxing the winnings from lotteries, etc. Thus, both the sections, viz., 2(24)(ix) and 115BB are to be read conjointly to reach any conclusion on the controversy. It is pertinent to mention that the following Explanation was inserted to clause (ix) with eff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equent years." Now the question which has been debated at length before us is to the nature of amendment to section 2(24)(ix), whether the said Explanation is retrospective or prospective. The claim of the learned Departmental Representative is that it is only clarificatory in nature as the circular in para 6.2 states that "it has been clarified that 'card games and other games of any sort' shall include any game show, an entertainment programme on television". On the contrary the learned Authorised Representative is relying upon para 6.3 of the circular for making out a case that the amendment will take effect from 1st April, 2002 and will accordingly apply in relation to the assessment year 2002-03 and subsequent years. No judgment or order of the Tribunal has been brought to our notice by the either side in support of the rival claims. 8. Be that as it may we find that the Assessing Officer processed the return under section 143(1) by accepting the assessee's claim as it is, despite the fact that the assessee had given note in the computation of income to the effect that he had earned the above sum from the KBC winning. No action was taken by the Assessing Officer for making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the provision of section 154 of the said Act.' 9. The legal position discussed above in relation to the scope of section 154 makes it abundantly clear that only the patent mistakes can be rectified within the ambit of this section and if the issue is debatable or two views are possible on it, the same cannot be settled within the rectification proceedings. Coming back to the facts of the case we find that the controversy raised in this appeal centres around the nature of Explanation to section 2(24)(ix) as to whether it is retrospective or prospective. If it is held to be retroactive then the amount in question would be taxable under the special provision of section 115BB and if it is decided as prospective then it would be taxed as per the normal rates. Though this Explanation has been inserted by the Finance Act, 2001 w.e.f. 1st April, 2002 thereby giving a broader idea of its being prospectively applicable, the contention of the learned Departmental Representative and the intention of the Legislature as appearing from the memorandum explaining the provisions of the Finance Bill and the above referred circular, prima facie, puts it in the category of a clarifying provision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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