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2008 (1) TMI 396 - SC - Income TaxWhether, on the facts and circumstances of this case, the Finance Act, 2001 was applicable to "block assessment" under Chapter XIV-B in respect of the search carried out on January 17, 2001; secondly, whether the proviso inserted in section 113 by the Finance Act, 2002, is clarificatory? Whether Finance Act, 2001 was applicable to block assessment under Chapter XIV-B up to June 1, 2002: Held that:- Even without the proviso to section 113 (inserted vide Finance Act, 2002, with effect from June 1, 2002), the Finance Act 2001, was applicable to block assessment under Chapter XIV-B in relation to the search initiated on January 17, 2001, and accordingly surcharge was leviable on the tax amounting to ₹ 97,456 at 17 per cent. amounting to ₹ 16,504. We accordingly answer the above question in favour of the Revenue and against the assessee. Prior to June 1, 2002, in several cases, tax was prescribed sometimes in the 1961 Act and sometimes in the Finance Act and often in both. This made liability uncertain. In the present case, however, the rate of tax in case of block assessment at 60 per cent. was prescribed by section 113 but the year of the Finance Act imposing surcharge was not stipulated. This resulted in the above four ambiguities. Therefore, clarification was needed. The proviso was curative in nature. Hence, the proviso inserted in section 113 merely clarifies that out of the above four dates, the relevant date for applicability of the Finance Act would be the year in which the search stood initiated under section 158BC. The impugned judgment of the High Court dated February 13, 2006, in Tax Appeal No. 1042 of 2005 and, accordingly, we allow the Department's civil appeal
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