The Commissioner Of Income Tax, Udaipur v. Shri Kirti Kumar Shah

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR -------------------------------------------------------- INCOME TAX APPEAL No.42 of 2006 THE COMMISSIONER OF INCOME TAX, UDAIPUR V/S SHRI KIRTI KUMAR SHAH Mr. K.K.BISSA, for the appellant / petitioner Date of Order : 18.8.2008 HON'BLE SHRI N P GUPTA,J. HON'BLE SHRI KISHAN SWAROOP CHAUDHARI,J. ORDER ----- This appeal is filed by the Revenue against thejudgement of the Tribunal dated 06.05.2005, accepting theappeal of the assessee, and setting aside the orders of theAssessing Officer, and the Commissioner, Income Tax(Appeals), and thereby deleting the surcharge, as leviedunder Section 113 of the Income Tax Act, 1961. The appealwas admitted on 04.04.2006, by framing a substantialquestion, reading as under :- “Whether in the facts and circumstances of the case, the Tribunalwas justified in holding that levy of surcharge while computingtax demand is debatable issue and hence non levy of it could notbe made subject matter of application for rectification underSection 154 of the Income Tax Act, 1961.” Thus, the question precisely comprehends the aspect, asto whether the levy of surcharge, while computing the taxdemand is a debatable issue or not. Learned AssessingOfficer has passed a very short order (Annex.4), holding,that on examination of assessment records it is noticed,that surcharge leviable has not been charged, and findingit to be a mistake apparent from record, it was purportedlyrectified, and the demand notice was issued. The matterwas carried in appeal, which was dismissed by learnedCommissioner, vide order dated 05.02.2004. It is adifferent story, that the certified copy of that order,which was required to be filed in this appeal, has not beenfiled. However, learned counsel made available for ourperusal the certified copy thereof, and a look at thatjudgement shows, that in Para 3, the contention of theassessee was noticed, about the proviso to Section 113being not retrospective, and for that purpose, twojudgements of Hon'ble Supreme Court were cited, then threejudgements of ITAT, Jaipur were cited, and two morejudgements were cited. Likewise, judgements of Hon'bleSupreme Court in ITO Vs. Volkart Brothers, reported in 82ITR 50, was also cited to contend, that for invokingSection 154, the mistake apparent on record must beobvious, and patent mistake, and not something, which canbe established by long drawn process of reasoning, onpoints, on which there may conceivably be two opinions.After noticing these contentions, the learned Commissioner also found, that one interpretation ofcourse is that incases where survey have been concluded after 01.06.2002,surcharge could be levied, and that this interpretation hasnot been considered by the ITAT, Jaipur, in cases cited bythe assessee, and that the ITAT, Jaipur is also notcategorical to held, that surcharge is to be levied only oncases where searches have been conducted after 01.06.2002.Then reference is made to a Circular of CBDT dated04.08.1995, and thus the appeal was dismissed. The learned Tribunal has found, that it is undisputedfact, that the amended provision came into force w.e.f.01.06.2002 only, and there cannot be two opinions, thatnon-charging of surcharges cannot be stated to be a mistakeapparent on record, and that, any issue which is debatableone, cannot be subject matter of order under Section 154,and has relied upon the judgement of Hon'ble Supreme Court,in Volkart Brothers case. Arguing the appeal, the learned counsel for the Revenuerelied upon the judgement of Hon'ble Supreme Court, in CITVs. Suresh N. Gupta, reported in 297 ITR 322 (SC), and readthat judgement in extenso. The learned Tribunal has found, that it is undisputedfact, that the amended provision came into force w.e.f.01.06.2002 only, and there cannot be two opinions, thatnon-charging of surcharges cannot be stated to be a mistakeapparent on record, and that, any issue which is debatableone, cannot be subject matter of order under Section 154,and has relied upon the judgement of Hon'ble Supreme Court,in Volkart Brothers case. Arguing the appeal, the learned counsel for the Revenuerelied upon the judgement of Hon'ble Supreme Court, in CITVs. Suresh N. Gupta, reported in 297 ITR 322 (SC), and readthat judgement in extenso. In our view, the bare reading of the judgement ofHon’ble the Supreme Court in Suresh N. Gupta’s case, byitself made it clear, that it was by that judgement, that Hon'ble Supreme Court proceeded to set at rest thecontroversy, as to whether the amendment in Section 113,made w.e.f. From 01.06.2002 is retrospective orprospective, and held it to be clarificatory andretrospective. That is the judgement rendered in the Year2008. Even without anything else, even this judgement doesmake it clear, that at least, on the date, when theTribunal passed the impugned order, the question aboutretrospective applicability of the amendment, made inSection 113, was very much a debatable question. In that view of the matter, the question, as framed, isrequired to be, and is, answered against the revenue. Theappeal thus has no force, and is dismissed. The parties areleft to bear their own costs. /mamta/