TaxTMI 
TaxTMI 
2008 (7) TMI 380
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....the Income-tax Act, 1961? (2) Whether, in the facts and circumstances of the present case, the Income-tax Appellate Tribunal had not erred in law in holding that the Commissioner of Income-tax had no power to initiate proceedings under section 263 of the Income-tax Act, 1961?" 3. The counsel for the parties agree that the appeal may be taken up for disposal straightaway and nothing further needs to be filed. 4. The facts are that a search and seizure operation under section 132 of the Income-tax Act, 1961 (hereinafter referred to as "the said Act"), was conducted in the case of the assessee on February 10, 2000. The block assessment in this case was completed by the Assessing Officer under section 158BC on February 28, 2002, at a total u....
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....hat the issue of surcharge was a contentious and debatable issue. This is noted in paragraph 2 of the said notice dated March 1, 2004. Despite this fact, the Commissioner took the view that the block assessment order dated March 28, 2003, giving effect to the order of the Commissioner of Income-tax (Appeals) was erroneous and prejudicial to the interest of the Revenue since surcharge, which was leviable, had not been charged in this case. The proceedings arising out of the said notice dated March 1, 2004, culminated in the order dated March 23, 2004, under section 263 whereby the Commissioner directed the levy of surcharge at 10 per cent, on the amount of income-tax computed by the Assessing Officer and directed that a revised notice of dem....
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.... appeal, this court by its order March 14, 2007 held that "we are of the opinion that the amendment to section 113 of the Income-tax Act, 1961 is not retrospective in nature". It is also pertinent to note that in CIT v. Devi Dass Malhan this court had observed (page 232): "The Tribunal held, and in our view rightly, that apart from the fact that the issue is debatable and no such order could have been passed in rectification under section 154 of the Act, even on the merits, the proviso to section 113 of the Act did not have any retroactive effect. The proviso was inserted with effect from June 1, 2002, by virtue of the Finance Act, 1999, and there is nothing to indicate that it would operate from retroactively." 10. The impugned order of ....
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....ax. 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 has been inserted in section 113 by which it is indicated that the Finance Act of the year in which the search was initiated would apply. Therefore, in our view, the said proviso was clarificatory in nature. In taxation, legislation of the type indicated by the proviso has to be read strictly. There is no question of retrospective effect.....
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....Income-tax (Appeals) had already, while construing the rectification order dated June 30, 2003, passed by the Assessing Officer, held that the issue of surcharge was a debatable one. This fact was also subsequently confirmed by the Tribunal, though later to the order passed under section 263. The impression we get by reading these orders as also the order passed by the Tribunal and subsequently by this court on March 14, 2007, is that at the time when the Commissioner issued the notice under section 263 and passed the order dated March 23, 2004, the contemporaneous understanding was that two views were possible and the question of surcharge on undisclosed income was a debatable one. It is a different matter that today the Supreme Court has ....
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....t the facts indicate a different story, the block assessment order was passed on February 28, 2002, this was taken in appeal by the assessee and after the Commissioner of Income-tax (Appeals) had partially allowed the appeal, the Assessing Officer giving effect to the appellate order, passed his order dated March 28, 2003, without levying any surcharge. But this order, according to us, did not survive because the Assessing Officer subsequently passed the order dated June 30, 2003, under section 154. It is clear that there cannot be two assessment orders in respect of the same assessee for the same assessment period. When the Commissioner issued the notice under section 263 he sought to revise the order dated March 28, 2003, which had alread....