R CHANDRAMOULEESWARAN Vs. P VASUDEVAN

JUDGEMENT

(1.) THE above tax case appeal is directed against the order of the Income-tax Appellate Tribunal made in IT (SS)A No. 78/mds/2002, dated 8. 9. 2006.

(2.) THE brief facts are: A search was conducted by the revenue officials under Section 132 of the Income-tax Act, 1961 in the residence and in the office premises of the assessee on 15. 7. 99 and based on the materials found during the search, a block assessment was framed for the block period 1. 4. 90 and 15. 7. 99 and an order was passed for the said block period on 19. 6. 2001 levying a surcharge at 17% on the tax payable on the block assessment. Aggrieved by the said order of block assessment, the assessee filed an appeal before the Commissioner of Income-tax (Appeals), who upheld the order of the assessing officer-levying surcharge by order-dated 26. 2. 2002. THE tribunal, on further appeal by the assessee, held that prior to introduction of proviso to Section 113 with effect from 1. 6. 2002, whereby it was clarified that surcharge as applicable would be leviable in cases of block assessments, the levy would fail, since the search in the present case was prior to 1. 6. 2002 and hence, surcharge is not imposable. Aggrieved by the said order of the Tribunal, the Revenue has preferred the above appeal raising the following substantial questions of law: "1. Whether in the facts and circumstances of the case, the Tribunal was right in holding that surcharge is not applicable to block period 1. 4. 90 to 15. 7. 99? 2. Whether in the facts and circumstances of the case, the Tribunal was right in holding that surcharge is not applicable to block assessments if the search took place prior to introduction of the proviso to sec. 113 with effect from 1. 6. 2002, even though Finance Acts of different years falling within the block period prescribed levy of surcharge? 3. Whether in the facts and circumstances of the case, the Tribunal was right in holding that surcharge is not leviable on block assessments during the relevant period, on the ground that the calculation is complex?"

(3.) FOLLOWING the above view of the Punjab and Haryana high Court in the case cited supra, a Division Bench of this Court, in which one of us was a party (P. D. DINAKARAN, J.), in T. C. (A) No. 46 of 2007 [ (between commissioner of Income-tax v. M/s. Neotech Company (Firm)], by order dated 7. 2. 2007, held that surcharge is not applicable to block assessments in respect of the search conducted prior to the introduction of proviso to Section 113. Admittedly, in the instant case also, the search was conducted on 15. 7. 99, which is prior to the introduction of proviso to section 113, i. e. , 1. 6. 2002. Hence, following the above said decisions, the issue raised in the first and second questions are decided in the affirmative, against the Revenue and in favour of the assessee. In that view of the matter, the issue raised in the third question need not be gone into. Accordingly, finding no substantial question of law arises for consideration, the appeal stands dismissed. .