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TMI Blog2006 (5) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Appellate Tribunal was right in law in confirming the Commissioner of Income-tax (Appeals)' order directing not to levy surcharge on the tax worked out on the undisclosed income, as the case pertains to search conducted prior to June 1, 2002?" Briefly the facts of the case are that search and seizure operations were conducted at the business as well as residential premises of Sh. Roshan Singh Makker, (deceased) on April 6, 2000. As a result thereof notice under section 158BC of the Income-tax Act, 1961 (for short "the Act"), was issued on December 29, 2000. In response to the notice, the assessee filed his return for the block period ended April 6, 2000, declaring an undisclosed income of Rs. 21 lakhs. In assessment, the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Tribunal's order, which is extracted below: "9. We have heard both the parties and considered the rival contentions. The learned Commissioner of Income-tax (Appeals) has decided the matter by relying on the decisions of various Benches mentioned in para. 7 of this order. In addition to the same, we find this issue is also squarely covered in favour of the assessee and against the Revenue by the Income-tax Appellate Tribunal, Amritsar Bench's recent decision dated June 14, 2005, in the case of Deputy CIT v. Shri Charanjit Lal Chauhan, Prop., Chauhan Zewrat House, Kapurthala whereby relying on its earlier decision in the case of Deputy CIT v. R. K. Jewellers in I. T. A. (55) No. 10/Asr./2004 it was held that surcharge on tax on undis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 1, 2002, it was not provided that in addition to tax on undisclosed income, surcharge should also be levied. However, the proviso to section 113 was inserted by the Finance Act, 2002 with effect from June 1, 2002 as per which levy of surcharge on the undisclosed income was specifically provided with effect from June 1, 2002. However, such proviso has not been given retrospective effect and is applicable only to cases where searches had been carried out after June 1, 2002. In the present case, the search had been carried out prior to June 1, 2002, and, therefore, no surcharge on tax on undisclosed income was leviable. This view also finds support from the decision of the Income-tax Appellate Tribunal, Chandigarh Bench in the case of V. S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iso was inserted with effect from June 1, 2002, by the Finance Act, 2002. The provisions of section 113 of the Act are as under: "113. Tax in the case of block assessment of search cases.- The total undisclosed income of the block period, determined under section 158BC, shall be chargeable to tax at the rate of sixty per cent.: Provided that the tax chargeable under this section shall be increased by a surcharge, if any, levied by any Central Act and applicable in the assessment year relevant to the previous year in which the search is initiated under section 132 or the requisition is made under section 132A." The relevant clause of the Notes on Clauses is extracted below: "Clause 41 seeks to amend section 113 of the Income-tax Act rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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