- (1.) WE have heard learned counsel for parties and perused the pleadings of Income Tax Appeal. This Income Tax appeal has been preferred against the appellate order dated 21.04.2006 passed by the Income Tax Appellate Tribunal, Lucknow Bench in a Bunch of Appeals namely ITA Nos.699/Luc/2002 (block period 01.04.1989 to 09.02.2000); 700/Luc/2002 (block period 01.04.1989 to 09.02.2000); 701/Luc/2002 (block period 01.04.1989 to 09.02.2000); 702/Luc/2002 (block period 01.04.1989 to 09.02.2000); and 703/Luc/2002 (block period 01.04.1989 to 09.02.2000), whereby the appeals of department were partly allowed for statistical purposes. The operative portion of the order on reproduction reads as :- "We have carefully considered the submissions of the learned representatives of the parties and have perused the records of the case. The assessee had surrendered the entire investment in the pawned business, which included the reinvestment of interest income earned by the assessee from this business. It is not disputed that in the cases of other members of this group, the income was assessed on cash basis of accounting in consonance with the general prevailing practice in the market and, therefore, there was no reason to estimate the interest on accrual basis in the case of the assessee, particularly when no papers were seized suggesting that the income had accrued on mercantile basis. In the result, this ground is rejected. In the result, all the appeals of the Department are partly allowed for statistical purposes."
(2.) THE instant appeal raises the following substantial questions of law: 1."Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal was justified in law in setting aside the issue regarding the levy of surcharge to the file of the Assessing Officer, without appreciating that the proviso to Section 113 inserted by the Finance Act, 2002 is only clarificatory in nature and the Finance of the relevant year clearly provided for levy of surchage on Income Tax calculated as per the provisions of Section 113 of the Act. 2.Whether on the facts and circumstances of the case, the Hon'ble Tribunal was justified in upholding the order of the CIT(A), who deleted the addition of Rs.1,06,460/- made on account of undisclosed income in respect of the Assessment Years 1995-96 and 1996-97 as the respondent had failed to furnish the returns before the expiry of due dates, without appreciating the provisions of Section 158BB(1)(ca) according to which the income is to be taken as Nil for any previous year failing in the block period, where the due date for filing of return of income has expired and no return of income has been filed. 3.Whether on the facts and circumstances of the case, the Hon'ble Tribunal was justified in upholding the order of the CIT(A), who deleted the addition of Rs.1,06,460/- made on account of undisclosed income in respect of Assessment Years 1995-96 and 1996-97 as the respondent had failed to furnish the returns before the expiry of due dates, without appreciating that the respondent had failed to discharge the burden of proving to the satisfaction of the assessing officer that any undisclosed income has already been disclosed in any return of income filed by the respondent before the commencement of search." The first and second questions as hereinabove, are the only the substantial questions of law, whereas the third one appears to be supplementary to the second.? During the course of hearing, learned counsel for revenue Sri D.D. Chopra pointed out a judgment of a Coordinate Bench of this Court of which one of us (Dr. Satish Chandra, J) was a member in Income Tax Appeal No.8 of 2008 (Commissioner of Income Tax (Central) Kanpur vs. Sampat Kumar Gupta, Lucknow), whereby the surcharge @ 10% as levied by the department was found to be correct and thus, it was upheld.?
(3.) FURTHER , the Court also held that the substantial question no. 1 was already covered by a judgment of Hon'ble the Apex Court reported in (2008) 297 ITR 322 (Commissioner of Income Tax vs. Suresh N. Gupta). The ratio of the said judgment appears to be that in case of block assessment, even prior to amendment made in Section 113 of the Act w.e.f. 01.06.2002, surcharge was leviable and further it has been held that the amendment made w.e.f. 01.06.2002 was only clarificatory in nature. Accordingly, the impugned order of Tribunal is hereby set aside and the order of the A.O. pertaining to the surcharge is restored. Thus, the answer to question no.1 is in favour of revenue. ? Now coming to second substantial question of law,? as the tax effect is below Rs.4.0 lacs, the appeal would obviously not be maintainable in view of Board's Circular dated 24.10.2005 as well as under Section 268-A of the Income Tax Act. So, this question requires no answer. Accordingly, this appeal filed by revenue stands party allowed.;