V.s.kathervel v. The Assistant Commissioner Of Income Tax,Central Circle Ii,Coimbatore

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM W.P.No.12647 of 2003 V.S.Kathervel.. Petitioner versus The Assistant Commissioner of Income Tax,Central Circle II,Coimbatore... Respondent .. Respondent Prayer: Petition filed under Article 226 of the Constitution ofIndia, seeking for a Writ of Certiorarified Mandamus to call forthe records of the Petitioner on the file of the Respondent inK.707/Central-Circle II/CBE and quash the impugned order dated21.02.2003 and consequently direct the Respondent not to levyany surcharge on the block assessment. Heard Mr.R.Venkat Narayan, learned counsel appearing for thepetitioner and Mr.T.Pramodkumar Chopda, learned Senior StandingCounsel, appearing for the Revenue. 2. The issue involved in this Writ Petition is squarelycovered by the decision in favour of the Assessee, based on thedecision of the Hon'ble Supreme Court in the case ofCommissioner of Income Tax vs. Vatika Township (P) Ltd. (2014)109 DTR (SC) 33. The said decision was followed by the Hon'bleDivision Bench of this Court in CIT (Central-I), Chennai vs.P.Ramanathan, T.C.(A).No.1453 of 2007, dated 02.02.2015. At thisstage, it would be beneficial to refer the operative portion ofthe order passed by the Hon'ble Division Bench:- “..... The issue raised in this appeal was consideredby a Constitution Bench of the Supreme Court inCommissioner of Income Tax (Central)-I vs. VatikaTownship Private Limited, (2014) 109 DTR (SC) 33. For https://hcservices.ecourts.gov.in/hcservices/ better understanding of the issue, the view taken inthe order passed by the High Court, which waschallenged before the Supreme Court, and the scope ofreference to the Constitution Bench are extractedhereunder: “7.It is clear from the aforesaid narration thatthe High Court has taken the view that provisoinserted in Section 113 of the Act by theFinance Act, 2002 was prospective in nature andthe surcharge as leviable under the aforesaidproviso could not be made applicable to theblock assessment in question of an earlierperiod i.e. the period from 01.04.1989 to10.02.2000 in the instant case. The Reference Order 8. It so happened that this very issue about thesaid proviso to Section 113, viz., whether it isclarificatory and curative in nature and,therefore, can be applied retrospectively or itis to take effect from the date i.e. 01.06.2002when it was inserted by the Finance Act, 2002,attracted the attention of this Court and wasconsidered by the Division Bench in the case ofCommissioner of Income Tax, Central II vs.Suresh N. Gupta, (2008) 4 SCC 362. The DivisionBench held that the said proviso isclarificatory in nature. When the instant appealcame up before another Division Bench on06.01.2009 for hearing, the said Division Benchexpressed its doubts about the correctness ofthe view taken in Suresh N.Gupta and directedthe Registry to place the matter before Hon'blethe Chief Justice of India for constitution of alarger Bench.” The Constitution Bench answered the reference in thefollowing manner: 38. When we examine the insertion of proviso inSection 113 of the Act, keeping in view theaforesaidprinciples,ourirresistibleconclusion is that the intention of thelegislature was to make it prospective in nature......39. The charge in respect of the surcharge,having been created for the first time by theinsertion of the proviso to Section 113, isclearly a substantive provision and hence is to https://hcservices.ecourts.gov.in/hcservices/ The Constitution Bench answered the reference in thefollowing manner: 38. When we examine the insertion of proviso inSection 113 of the Act, keeping in view theaforesaidprinciples,ourirresistibleconclusion is that the intention of thelegislature was to make it prospective in nature......39. The charge in respect of the surcharge,having been created for the first time by theinsertion of the proviso to Section 113, isclearly a substantive provision and hence is to https://hcservices.ecourts.gov.in/hcservices/ be construed prospective in operation. Theamendment neither purports to be merelyclarificatory nor is there any material tosuggest that it was intended by Parliament.Furthermore, an amendment made to a taxingstatue can be said to be intended to remove'hardships' only of the assessee, not of theDepartment. On the contrary, imposing aretrospective levy on the assessee would havecaused undue hardship and for that reasonParliament specifically chose to make theproviso effective from 01.06.2002.” In view of the proposition of law enunciated in the abovedecision, this Court allows the Writ Petition and the impugnedorder is set aside. No costs. Sd/-Asst. Registrar. /true copy/ Sub Asst. Registrar. pvsToThe Assistant Commissioner of Income Tax,Central Circle II,Coimbatore. +1 CC to M.T. Pramodkuman Chopda, Advocate Sr.No.51735 SK (CO)MD : 06/10/2016 https://hcservices.ecourts.gov.in/hcservices/