TMI Blog2009 (2) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... AKAM SHARMA JJ. JUDGMENT The judgment of the court was delivered by Dr. ARIJIT PASAYAT, J - Leave granted. 2. Challenge in this appeal is to the judgment of a Division Bench of the Punjab and Haryana High Court dismissing the appeal filed under Section 260(A) of Income Tax Act, 1961 (in short the 'Act'). In the said appeal, challenge was to the order dated 01.7.2006 passed by the Income Tax Appellate Tribunal Amritsar Bench, Amritsar (in short the 'Tribunal'). The dispute related to the block period 1.4.1990 to 3.7.2000. The question which arose for consideration is as follows:"Whether, on the facts and in the circumstances of the case, the ITAT was right in law in confirming the CIT (A)'s order directing not to levy surcharg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The provision has not been given retrospective effect, and therefore, the Tribunal held that it applied only to cases where searches were carried out after 1.6.2002. The High Court dismissed the appeal relying on its decision in the case of CIT v. Roshan Singh Makkar (2006) 287 ITR 160 and also referred to two other decisions of the Madras High Court in CIT v. Neotech Company [(2007) 291 ITR 27] and CIT v. S. Palanivel [(2007) 291 ITR 33]. 4. Learned counsel for the appellant submitted that the case at hand is squarely covered by a decision of this court in Commissioner of Income Tax, Central II v. Suresh N. Gupta [2008(4) SCC 362]. 5. The power to levy a surcharge on income tax is traceable to Article 271 read wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion and also to expedite and simplify assessments in search cases. Undisclosed incomes have to be related in different years in which income was earned under block assessment. This is because in such cases, the "block period" is for previous years relevant to 10/6 assessment years and also the period of the current previous year up to the date of the search. The essence of this new procedure, therefore, is a separate single assessment of the "undisclosed income", detected as a result of search and this separate assessment has to be in addition to the normal assessment covering the same period. Therefore, a separate return covering the years of the block period is a prerequisite for making block assessment. Under the said procedure, Explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot with a view to oust the levy of surcharge but to make the levy cost effective and easy. Therefore, a flat rate is prescribed. The difficulty in block assessment is that one has to correlate the undisclosed income to different years in which income is earned, hence, Parliament has fixed a flat rate of tax in Section 113. 12. Though Parliament was aware of rate of tax prescribed by Section 113 and yet in the various Finance Acts, Parliament has sought to levy surcharge on the tax in the case of block assessment. In the present case, the assessing officer has applied the rate of surcharge at 17% which rate finds place in Para A of Part I of Schedule I to the said Finance Act of 2001, therefore, surcharge leviable under Finance Act was a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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