Commissioner of Income Tax v. Dr. K. Senthilnathan
INCOME TAX ACT, 1961
Search and seizure- Block assessment-Levy of surcharge
Search was conducted under section 132 in the residence as well as in the business premises of assessee and a block assessment was framed for the relevant period. Order was passed for the relevant period levying a surcharge at 17 per cent, on the tax payable on the block assessment. CIT(A) upheld the levy of surcharge. Tribunal held that as per the proviso to section 113 it was clarified that surcharge as applicable would be leviable in cases of block assessments, was introduced only with effect from June 1, 2002 and would be applicable only if the search took place after that date. Held:With regard to the issue raised, viz., whether surcharge could be levied for the block assessments if the search was conducted prior to the introduction of the proviso to section 113, the Punjab and Haryana High Court inthe cae of CIT v. Roshan Singh Makker [2006] 287 ITR 160 (P&H), after referring to section 113 and the relevant proviso levying surcharge, was held that since the search was conducted on June 1, 2000, i.e. before the insertion of the proviso in section 113, with effect from June 1, 2002, the levy of surcharge envisaged under this proviso will not be attracted. After going through section113, especially the proviso added on June 1, 2002, which provides for levy of surcharge. Counsel could not dispute that the same had not been given retrospective effect on the language of clause 41 of the Notes on Clauses is in clear terms. Since the search in the instant case was conducted on June 1, 2000, i.e. before the insertion of the proviso in section 113, with effect from June 1, 2002. The levy of surcharge envisaged under this proviso would not be attracted in the present case. Therefore, the order of tribunal holding that surcharge is not applicable to the block assessments in respect of the search conducted prior to the introduction of proviso to section 113, viz., prior to June 1, 2002, was confirmed. In the present case also, the search was commenced on November 23, 2000, and concluded on March 14, 2001, which is obviously prior to the introduction of the proviso to section 113. Hence, the appeal of the revenue was dismissed.
Income Tax Act, 1961 Section 113
Decision: In favour of Assessee.
A.Y. 1988-89 to 1998-99