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[2007] 291 ITR 30 (Madras) HIGH COURT OF MADRAS Commissioner of Income-tax v. Dr. K. Senthilnathan P. D. DINAKARAN AND MRS. CHITRA VENKATARAMAN, JJ. TAX CASE (APPEAL) NO. 523 OF 2004 FEBRUARY 7, 2007 Section 113 of the Income-tax Act, 1961 - Block assessment in search cases - Rate of Tax â– Surcharge was not applicable to block assessments if search took place prior to introduction of proviso to section 113 with effect from 1-6-2002 [Block period 1988-89 to 1998-99] As held in the decision of the Punjab & Haryana High Court in CIT v. Roshan Singh Makker [2006] 287 ITR 160, Surcharge was not applicable to block assessments if the search took place prior to the introduction of the proviso to section 113 with effect from 1-6-2002. CASE REVIEW CIT v. Roshan Singh Makkar [2006] 287 ITR 160 (Punj. & Har.) and CIT v.Neotech Co. (Firm) [2007] 291 ITR 27 (Mad.) followed & relied upon. JUDGMENT P.D. Dinakaran, J.-The above tax case appeal is directed against the order of the Income-tax Appellate Tribunal made in IT(SS)A No. 211/Mds/ 2003, dated January 6, 2004. 2. The facts in brief are : There was a search conducted by the Revenue officials under section 132 of the Income-tax Act, 1961, in the residence as well as in the business premises of the assessee on November 23, 2000, and it was concluded on March 14, 2001, and a block assessment was framed for the block period April 1, 1990, to November 22, 2000, and an order was passed for the said block period on March 28, 2003, levying a surcharge at 17 per cent, on the tax payable on the block assessment. Aggrieved by the said order of block assessment, the assessee filed an appeal before the Commissioner of Income-tax (Appeals), who by order dated November 10, 2000, upheld the levy of surcharge. On further appeal by the assessee, the Tribunal held that the proviso to section 113, whereby it was clarified that surcharge as applicable would be leviable in cases of block assessments, was introduced only with effect from June 1, 2002, and as such, would be applicable only if the search took place after that date. Aggrieved by the said order of the Tribunal, the Revenue has preferred the above appeal raising…

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