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TMI Blog1982 (4) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... that additional surcharge was not leviable against the assessee for the assessment year 1963-64 ? The facts giving rise to the reference are as follows: The assessee is a co-operative society carrying on business in banking at Jalgaon. In respect of the assessment year 1963-64, in the original order of assessment which was made on March 14, 1969, the ITO did not charge additional surcharge as provided under the Finance Act, 1963 (referred to hereinafter as " the said Finance Act "). Thereafter, by an order dated September 27, 1969, passed under s. 154, the ITO held that the additional surcharge of Rs. 31,810 was payable by the assessee and he levied the said additional surcharge by the said order. The assessee preferred an appeal to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the rates specified in Part of the First Schedule and,- ... (ii) in the cases to which Paragraphs A and C of the aforesaid Part apply, shall further be increased by an additional surcharge for purposes of the Union (hereinafter referred to as the additional surcharge) calculated in the manner provided in the said Schedule. " Sub-section (8) of s. 2 defines the expression residual income " for the purposes of Paragraphs A and C of Pt. I of the First Schedule. That definition provides that " residual income " means the amount of total income as reduced by certain amounts like the amount of capital gains, if any, included in the total income. Section 3 of the said Finance Act runs as follows " Notwithstanding anything contained in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al income within the meaning of the term in the said Finance Act, and the assessee is liable to the levy of additional surcharge provided the residual income exceeds Rs. 6,000. The submission of Mr. Mehta, learned counsel for the assessee, on the other hand, is that in view of the fact that the entire income of the assessee was exempted from the payment of income-tax under the Provisions of s. 81 of the said Act as it then stood, no additional surcharge could be levied on that income. We find that the question before us is practically covered by the decision of the Supreme Court in Madurai District Central Co-operative Bank Ltd. v. Third ITO [1975] 101 ITR 24. In that case, it has been held by the Supreme Court that the additional surcharg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 75] 101 ITR 24 (SC), was that in that case a part of the total income of the assessee, an amount of Rs. 51, 763, was not exempt from income-tax, whereas, in the present case, the entire income of the assessee was exempt from income-tax by virtue of the provisions of s. 81 of the said Act. It was further urged by him that as the entire income of the assessee before us was exempt from the payment of income-tax, it was not possible to calculate additional surcharge at all and hence such surcharge could not be levied. In our view, both these contentions are unsound. The first contention of Mr. Mehta is answered by the said decision of the Supreme Court itself, where the Supreme Court has pointed out that the additional surcharge is a distinct c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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