Surcharge leviable not depend on the liability of the assessee to pay income tax but on the assessed tax

IN THE INCOME TAX APPELLATE TRIBUNAL“C” BENCH: KOLKATA

[Before Shri N.Vijaya Kumaran, Judicial Member & Shri C.D.Rao, Accountant Member]

M.A. No. 32/Kol/2010

[Arising out of IT (SS) A No.190/Kol/03 ]

Block Assessment Period 1-4-1990 to 8-9-2000

A.C.I.T, C.C-XXV, Kolkata

[Applicant]

Vs.

 Loknath Prasad Gupta

PAN: ADUPG 5810F

 [Respondent]

M.A. No.117/Kol/2007

[Arising out of IT (SS) A No. 185/Kol/03 ]

Block Assessment Period 1-4-1990 to 8-9-2000

D.C.I.T, C.C-XXV, Kolkata

[Applicant]

Vs.

Loknath Prasad Gupta

PAN: ADUPG 5810F

 [Respondent]

Applicant by: Shri S.K. Roy, ld.DR

Respondent by: Shri Rajeev Kumar, ld.AR

Date of Hearing: 20-01-2012

Date of Pronouncement: 21st -03-2012

ORDER

Shri N.Vijaya Kumaran, Judicial Member

Misc. Application No.32/Kol/10 is arising out of IT(SS) No. 190/Kol/03 and the second Misc. Application No.117/Kol/07 is arising out of IT(SS) No.185/Kol/03 for the block assessment period 01-04-90 to 08-09-2000 respectively.

2. In the first round the appeal i.e IT(SS) No.190/Kol/03 was filed by the revenue and appeal i.e IT(SS) No.185/Kol/03 was filed by the assessee. Both the appeals have been disposed of by this Tribunal order vide dated 11th October 2004.

3. Now, the misc. petitions relating to both the appeals filed on 19-3-2010, which is beyond the period of 4 years as contemplated in section 254(2) of the I.T.Act 1961. The original appeal order is dated 11th October 2004. Both the Misc. Applications [ No.32/Kol/10 & 117/Kol/07] filed by the revenue on 19-3-10//6-1-10 and the order of the tribunal is dated 11-10-2004. Therefore, the first Mis. Application ie.e 32/Kol/10 [arising out of IT(SS) No.190/Kol/03 is  barred by limitation as contemplated in section 254(2) of the I.T.Act’61. Therefore, the misc. application no.32/Kol/10 is dismissed as beyond 4 years.

4. Now, the consideration with regard to Misc. Application No.117/Kol/07 arising out of IT(SS) No.185/Kol/03, the grievance of the department is that of charging of sur-charge is to be 17% and not 10%.

5. We have heard the learned DR and the learned counsel for the assessee. The learned counsel for the assessee filed written submissions with a copy orders pages 1-20. The interesting point is that the revenue filed misc. petition in connection with IT(SS) No.185/Kol/2003 the assessee filed Misc. Application bearing MA No.153/Kol/05 arising out of MA No.50/Kol/05 in IT (SS)A No.185/Kol/03. The Tribunal vide its order dated 28-2-2006 has recalled only ground no.1 for fresh adjudication. For the purpose of clarity, we reproduce the second round of tribunal order dated 13-10-06 as under:-

“That the ld.CIT(A) was wrong in confirming the addition of Rs.7,50,975/- based on the undisclosed Bank a/c, peak balance. The assessee disclosed income of Rs.1,53,28,003/- in his block return based on the assets/expenses found in the course of search and made further offer of income in the course of assessment proceeding of Rs.4,01,306/- based on the assets/expenses found in course of search. Details is given in page no.27 & 28 of the CIT(A)’s order. No documents except the undisclosed Bank a/c was found, as such when income is determined based on application of fund, than again making addition based on income is nothing but double addition and against the accounting principle. As such, addition is bad in law and need to be deleted.”

6. The Tribunal vide order dated 28-02-2006 has recalled only ground no.1 for fresh adjudication which relates to addition of Rs.7,50,975/ based on the undisclosed bank account, peak balance.

7. In the second round the tribunal vide its order dated 13-10-2006 has restored the matter observing as under:-

“6. In the result, the appeal filed by the assessee in IT(SS) A No.185/Kol/2003 for Ground No.1 is allowed for statistical purpose, whereas the appeal being No. 190/Kol/2003 by the revenue does not need any adjudication as the same had already been disposed of by this Tribunal vide order dated 11th October 2004.”

8 Hence, the revenue cannot challenge the decision by way of these misc. petitions as the Tribunal vide its original order has recalled in its second innings vide dated 13-10-06. As the tribunal has already recalled ground no.1 for fresh adjudication this misc. application will not survive as there cannot be two misc. applications. Hence, the purported second mis. Petition i.e. MA No.117/Kol/07 arising out of IT(SS) No.185/Kol/03 has no legs to stand.

9. Further, the following submission of the learned counsel for the assessee is also worth to be considered:-

“As such, no mistake has crept in the order of the Hon’ble Tribunal in IT(SS) A No.190/Kol/03 since in IT(SS) A No.190/Kol/2003 no ground was taken by the department on the issue of levy of surcharge@10%. Further, in proceedings after setting aside, the Hon’ble Tribunal in IT(SS) A No.14/Kol/2007 & CO No.15/Kol/2007 deleted the surcharge levied @10%. As such, there is no question of levy of surcharge @10% or 17%. In view of the facts as narrated above, the Miscellaneous Application No.117/Kol/07 & 32/Kol/10 deserves to be dismissed.”

10. The Hon’ble Supreme Court in the case of CIT Vs. Raju Bhatra reported in (2009) 310 ITR 105 (SC) has laid down the ratio that surcharge leviable under the Finance Act was a distinct charge not dependent for its leviability on the assessee’s liability to pay incometax but on assessed tax. Therefore, even without the proviso to section 113 of the Income-tax Act, 1961 relating to tax in the case of block assessment of search cases, the Finance Act, 2001 was applicable to block assessment under Chapter XIV-B in relation to the search initiated on April6, 2000 and according surcharge was leviable. In this we find that search and seizure action u/s. 132(1) of the I.T Act 1961 was conducted in the case of Sri Loknath Prasad Gupta on 8-9- 200 only. Hence, the said decision of the Hon’ble Supreme Court is directly applicable. The decision of the Hon’ble Apex Court has to be followed. There is a mistake apparent on record as urged by the department in these misc. applications. Hence, after considering the rival submissions, the issue of surcharge is decided in favour of the revenue and against the assessee by following said decision of the Hon’ble Supreme Court in the case of cited supra. The decision of the Hon’ble Supreme Court in the case of CIT Vs. Suresh N.Gupta [2008] 297 ITR 322(SC) is also applicable on this issue, which supports the stand of the department.

11. In the result, both the miscellaneous application no.117/Kol/07 is allowed to the extent as indicated above and the other misc. application no. 32/Kol/2010 is dismissed as it is barred by limitation..

Order pronounced in the open Court on 21st -03-2012

                                            Sd/-                                                 Sd/-

                       [C.D.Rao, Accountant Member]    [N.Vijaya Kumaran, Judicial Member]

Dated: 21st -03-2012

Copy of the order forwarded to:

1. Appellant- ACIT/DCIT, CC-XXV, 18 Rabindra Sarani, Kol-1.

2. Respondent: Shri Loknath Prasad Gupta, Ramkrishna Dev Path, Titagarh, 24 Pgs(N).

3. CIT,

4. CIT (A),

5. DR, Kolkata Benches, Kolkata

*PP Sr.PS]

[True Copy]

By order,

Asstt Registrar.