2011 (7) TMI 346

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....on of the Apex Court in the case of Commissioner of Income-Tax vs. Suresh N. Gupta reported in [2008] 297 ITR 322 (SC).   2. For the purpose of this order, we may record the brief facts as arising in Tax Appeal No.823 of 2008. This appeal is directed against the judgment of the Tribunal dated 9.2.2007. The sole question pressed by the Revenue in this appeal is with respect to the surcharge on the undisclosed income of the assessee for the block period of 1991-92 to 2001-02.   3. Search was carried out in the premises of the assessee on 16.11.2000. The assessee thereupon filed its return for the block period of 1991-92 to 2001-02 on 9.10.2002 declaring the total income of Rs.14,81,550/- Assessment under Section 158BC was complete....

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.... of the Act with effect from 1.6.2002 were only by way of clarification and in no manner effect the charging provisions. While admitting this appeal Division Bench of this Court had formulated following substantial questions of law".   "(1) Whether on the facts and in circumstances of the case, the Appellate Tribunal is justified on facts and in law in holding the proviso to Section 113 of the I.T. Act, 1961 is not applicable for block period consisting of A.Yrs. 1991-1992 to 2001-02?   (2) Whether the 'Proviso' to Section 113 of the I.T. act, 1961 is clarificatory or declaratory in nature particularly when First Schedule to the Finance Act provides for levy of surcharge on tax determined under Section 113 of the Act and hence i....

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....nt. In the present case, the Assessing Officer has applied the rate of surcharge at 17 per cent. which rate finds place in paragraph A of Part I of the First Schedule to the said Finance Act of 2001, therefore, surcharge leviable under the Finance Act was a distinct charge, not dependant for its leviability on the assessee's liability to pay income-tax but on assessed tax.   23. For the aforementioned reasons, we hold that even without the proviso to section 113 (inserted vide Finance Act, 2002, with effect from June 1, 2002), the Finance Act 2001, was applicable to block assessment under Chapter XIV-B in relation to the search initiated on January 17,2001, and accordingly surcharge was leviable on the tax amounting to Rs.97,456 at 17....

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.... no merit in the above arguments. Both, the Finance Acts of 2000 and 2001, indicated that a substantive charge was created in respect of the income-tax to be levied. Both these Acts prescribed the rates of sur-charge. The said surcharge did not depend for its leviability on the assessee's liability to pay income-tax but on the assessed tax. The assessee has relied upon the above anomalies in support of their contention that such anomalies made the charge ineffective. In our view, such submission amounts to begging the question. According to the assessee, prior to June 1, 2002, the position was ambiguous as it was not clear even to the Department as to which year's Finance Act would be applicable. To clear this doubt precisely, the proviso h....