TMI Blog2004 (2) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is now challenging only the levy of surcharge over and above the income-tax. 3. Shri Sridhar, the learned counsel for the assessee further submitted that section 113 of the Income-tax Act provides rate of tax at 60 per cent in respect of the undisclosed income determined under Chapter XIV-B. The learned counsel invited our attention to section 4 of the Income-tax Act and submitted that the rate of tax prescribed under the Central Act, would be applicable in respect of the assessment made under regular course. In respect of the undisclosed income, the Legislature prescribed a separate procedure under Chapter XIV-B. After computing the income, the rate of tax has been specifically provided under section 113 of the Income-tax Act. Under section 113 there was no reference to any Central enactment for the purpose of rate of tax. According to the learned counsel, section 113 itself provides the rate of tax and, therefore, there is no further scope for referring to the Central Act for the purpose of determining the rate of tax in respect of undisclosed income. According to the learned counsel, section 4(1) specifically refers to the Central enactment for the purpose of fixing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f searches which took place before 1-6-2002. The learned counsel further submitted that the other Benches of this Tribunal have also taken a similar view. 5. On the contrary, Shri K. Anangapal, the learned Departmental Representative (D.R.) submitted that the Parliament by Finance Act, 1999 provided for levy of surcharge over and above the rate of income-tax prescribed under sections 112 and 113. A similar provision was also enacted by Finance Act, 2000 enabling the Government to levy surcharge. A specific reference was made with regard to sections 112 and 113 of the Income-tax Act. The Parliament has also enacted Finance Act, 2001 for levying surcharge over and above the tax computed in accordance with the provisions of sections 112 and 113 of the Income-tax Act. However, by Finance Act, 2002, the Parliament amended section 113 and thereby a proviso was introduced to levy surcharge over and above the rate of tax prescribed under section 113. By a separate provision in Finance Act, 2002 the Parliament continued the levy of surcharge in respect of tax determined under section 112 of I.T. Act. According to the learned D.R., since the Parliament in their wisdom enacted Finance Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmencing from taxing statute to taking away of the money from the pocket of the citizen shall be made by a process authorised by a law. The Apex Court has also taken a similar view in the case of A. Venkata Subbarao v. State of A.P. AIR 1965 SC 1773. The Madras High Court also held that the entire process of levy and collection of tax must be authorized by law in the case of Rayalseema Constructions v. Dy. CTO AIR 1959 Mad. 382. Therefore, the Parliament in their wisdom enacted income-tax to provide the method of computation of income and also method for recovery and collection of taxes. Section 4(1) of the Income-tax Act provides that the rate of tax shall be prescribed by Central enactment. In view of the above, every year the Parliament passes the Finance Act prescribing the rate of tax for the purpose of income-tax. 8. Article 271 of the Constitution of India enables the Parliament to increase the duties or taxes referred in articles 269 and 270 by levy of surcharge. Therefore, it is very clear that the Parliament has power to prescribe the rate of tax under article 270 of the Constitution of India and also to prescribe the rate for the purpose of surcharge over and above the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income-tax levied under section 113 of the Income-tax Act. It is for the Parliament either to make an amendment by incorporating a proviso in section 113 of the Income-tax Act for the purpose of levying surcharge or to enact a separate Act like Finance Act. Since it is entirely within the domain of the Parliament, it may not be correct to say that surcharge can be levied only if an amendment was made in section 113 of the Income-tax Act. Finance Act, 2001 is also a Central enactment which prescribes the rate of surcharge over and above the income-tax prescribed under section 113 of the Income-tax Act. The Apex Court in the case of K. Srinivasan held as follows:- "It is in exercise of the legislative power conferred by that entry that the Union Parliament enacts the provision in the Finance Act each year relating to them. It is that Act which authorises these taxes to be charged and prescribes the rates at which they can be charged. Section 4 of the Act simply provides that where any Central Act enacts that income-tax shall be charged for any assessment year at any rate or rates income-tax at that rate or those rates shall be charged in accordance thereto and subject to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt judicial body, is expected to examine the levy of surcharge in accordance with statutory provisions. Therefore, we find no justification in the contention of the assessee that there cannot be any levy of surcharge merely because the Chief Commissioners expressed their doubt. 10. The other contention of the learned counsel for the assessee is that the Finance Act was passed every year and there is a reference about the assessment year. In respect of the block assessment, the tax has to be levied for the block assessment year. Since there is no reference about the block assessment year in the Finance Act, the rate of tax prescribed under the Finance Act, 1999, would not be applicable for block assessment. In our view, this submission of the learned counsel for the assessee is also not correct. When the Parliament enacted Finance Act, 2001 prescribing levy of surcharge over and above the rate of income-tax prescribed under section 113, the Legislature was aware that section 113 refers only to undisclosed income in respect of block assessment year. Therefore, it is not correct to say that Finance Act refers only assessment year and not block assessment year. Finance Act, 2001 spec ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
