The ACIT, 3(1), Bhopal V. Shri Rameshchand Shah, GANJBASODA

MA 39/IND/2010

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 5254 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 26-11-2010
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 23-09-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P K MITRA
• Assessee Lawyers: H P VERMA
• Keywords: Retrospective amendment; Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER M.A. NO. 39/IND/2010 ARISING OUT OF IT(SS)A NO. 65/IND/05 AND C.O.NO. 75/IND/05 ASSTT. COMMR. OF INCOME TAX 3(1), BHOPAL APPLICANT VS RAMESH CHAND SHAH GANJBASODA RESPONDENT APPPLICANT BY SHRI P.K. MITRA RESPONDENT BY SHRI H.P. VERMA AND SHRI ASHISH GOYAL O R D E R PER SHRI JOGINDER SINGH THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY T HE REVENUE TO RECTIFY A MISTAKE APPARENT FROM RECORD IN THE ORDER OF THE TRIBUNAL DATED 29 TH MARCH, 2010. 2. THROUGH THIS PETITION, IT WAS CONTENDED BY THE LEAR NED SENIOR DR THAT SURCHARGE LEVIED BY THE ASSESSING OF FICER 2 HAS BEEN DELETED BY THE TRIBUNAL AMOUNTING TO RS.18,54,254/- AND IN VIEW OF THE DECISION OF THE H ONBLE SUPREME COURT IN THE CASE OF SURESH N. GUPTA; 297 I TR 322, SUCH SURCHARGE IS TO BE LEVIED IN CASE OF BLOCK ASS ESSMENT. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F SURESH N. GUPTA (SUPRA), IS NOT APPLICABLE TO THE ASSESSEE , THUS THERE IS NO MISTAKE APPARENT FROM RECORD IN THE ORDER OF THE TRIBUNAL WITH REGARD TO DELETING THE SURCHARGE LEVI ED IN RESPECT OF BLOCK ASSESSMENT, WHICH COULD BE RECTIFI ED U/S 252(2) OF THE ACT. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE MATERIAL ON RECORD. THE HONBLE SUPREM E COURT IN THE CASE OF SURESH N. GUPTA (SUPRA) HAS HELD THA T SURCHARGE IS LEVIABLE ON THE UNDISCLOSED INCOME AND THAT THE AMENDMENT TO SECTION 113 OF THE OF THE ACT BY INTRO DUCTION OF PROVISO WAS ONLY CLARIFICATION IN NATURE. THUS, THE DELETION OF SURCHARGE BY THE TRIBUNAL IN ITS ORDER DATED 29 TH MARCH, 2010 AMOUNTS TO A MISTAKE APPARENT FROM RECO RD WHICH IS LIABLE TO BE RECTIFIED U/S 254(2) OF THE A CT, 1961. 3 FOLLOWING IS THE OBSERVATIONS OF THE HONBLE SUPREM E COURT :- 25. WE FIND 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 ACT PRESCRIBED THE RATES OF SURCHARGE. THE SAID SURCHARGE DID NOT DEPEND FOR ITS LIVABILITY ON THE ASSESSEES 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 YEARS 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. THE PROVISO ONLY CLARIFIES THAT OUT OF THE FOUR DATES, PARLIAMENT HAS OPTED FOR THE DATE, NAMELY, THE YEAR IN WHICH THE EARCH IS INITIATED, WHICH DATE WOULD BE RELEVANT FOR APPLICABILITY OF A PARTICULAR FINANCE ACT. THEREFORE, WE HAVE TO READ THE PROVISO AS IT STANDS. 4 WE REVERSE THE ORDER OF THE TRIBUNAL ON THIS ISSUE AND CONFIRM THE LEVY OF SURCHARGE IN RESPECT OF INCOME ASSESSED UNDER THE BLOCK ASSESSMENT. 5. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE REVENUE IS ALLOWED IN PART IN THE TERMS INDICATED HEREINABOVE. ORDER PRONOUNCED IN OPEN COURT ON 26 TH NOVEMBER, 2010. SD SD (R.C. SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER INDORE NOVEMBER 26, 2010 COPY TO : APPLICANT, RESPONDENT, CIT, CIT(A), DR DN/-