Case Law Details
Court reiterated that if a proviso is clarificatory and curative in nature, it should be given a retrospective operation. The Court in para 33 held as under:-
“If a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally and where to confer such benefit appears to have been the legislators object, then the presumption would be that such a legislation, giving it a purposive construction, would warrant it to be given a retrospective effect. This exactly is the justification to treat procedural provisions as retrospective.”
SC On Levy of Surcharge U/s 113 Proviso In Search Cases
This question has been referred to the Constitution Bench in the Civil Appeal arising out of S.L.P. No.540/2009 and, therefore, to start with, we would be justified in referring to facts of that case. In fact the answer to the aforesaid question would lead to the sealing of the fate of all these appeals one way or the other. The facts in this appeal, which need recapitulation, are that there was a search and seizure operation under Section 132 of the Act on the premises of the assessee on 10.02.2001. Notice under Section 158BC of the Act was issued to the assessee on 18.06.2001 requiring him to file his return of income for the block period ending 10.02.2000. In compliance, the assessee filed its return of income for the block period from 01.04.1989 to 10.02.2000. The Block Assessment in this case was completed under Section 1 58BA on 28.02.2002 at a total undisclosed income of Rs.85,18,819/-. After sometime, the Assessing Officer, on verification of working of calculation of tax, observed that surcharge had not been levied on the tax imposed upon the assessee. This was treated as a mistake apparent on record by the Assessing Officer and accordingly a rectification order was passed under Section 154 of the Act on 30.06.2003. This order under Section 154 of the Act, by which surcharge was levied by the Assessing Officer, was challenged in appeal by the assessee. The said order was cancelled by the CIT (Appeals)-I, New Delhi vide order dated 10.12.2003 on the ground that the levy of surcharge is a debatable issue and therefore such an order could not be passed taking umbrage under Section 154 of the Act. The undisclosed income was revised under Section 250BC/1 58BC by the Assessing Officer vide order dated 09.09.2003 to Rs.10,90,000/- to give effect to the above order of the CIT (Appeals), and thereby removing the component of the surcharge.
As the Department wanted the surcharge to be levied, the Commissioner of Income Tax (Central-I), New Delhi issued a notice under Section 263 of the Act to the assessee and sought to revise the order dated 09.09.2003 passed by the Assessing Officer by which he had given effect to the order of the CIT (Appeals) and in the process did not charge any surcharge. In the opinion of CIT, this led to income having escaped the assessment. According to the CIT, in view of the provisions of Section 113 of the Act as inserted by the Finance Act, 1995 and clarified by the Board Circular No.717 dated 14.08.1995, surcharge was leviable on the income assessed. According to the CIT the charging provision was Section 4 of the Act which was to be read with Section 113 of the Act that prescribes the rate and tax for search and seizure cases and rate of surcharge as specified in the Finance Act of the relevant year was to be applied. In this particular case the search and seizure operation took place on 14.07.1999 and treating this date as relevant, the Finance Act 1999 was to be applied.
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