Law:

Section:

Section 113, read with Chapter XIV-B of the Income-tax Act, 1961 and read with Para A of Part I of First Schedule to Finance Act, 2001 - Block assessment in search cases - Tax in case of - Block period 1991-92 to 2000-01 - On 17-1-2001 a search under section132 was carried out at premises of assessee which unearthed certain undisclosed income - Assessing Officer computed tax thereon at 60 per cent in terms of section 113 and also levied surcharge at 17 per cent on amount so taxed - Assessee challenged levy of surcharge in appeal before Commissioner (Appeals) - Commissioner (Appeals) allowed assessee's appeal - Decision of Commissioner (Appeals) was confirmed by Tribunal and High Court - Whether since even without proviso to section 113 (inserted vide Finance Act, 2002 with effect from 1-6-2002), Finance Act, 2001 was applicable to block assessment under Chapter XIV- B in relation to search initiated on 17-1-2001, surcharge was leviable at rate of 17 per cent on amount of tax computed - Held, yes Section 113 of the Income-tax Act, 1961 - Block assessment in search cases - Tax in case of - Block period 1991-92 to 2000-01 - Whether proviso inserted in section 113 by Finance Act, 2002 is clarificatory in nature as it clarifies that relevant date for applicability of Finance Act would be year in which search stood initiated under section 158BC- Held, yes Section 158BB of the Income-tax Act, 1961 - Block assessment in search cases - Computation of undisclosed income - Whether section 158BB is required to be read with section 4 - Held, yes FACTS On 17-1-2001 a search under section 132 was carried out at the premises of the assessee, an individual. The search unearthed an unexplained investment of Rs. 65,000 being the value of household valuables and Rs. 97,427 on account of unexplained marriage expenses (undisclosed income). Accordingly, in the block assessment, the Assessing Officer determined the assessee's undisclosed income at Rs. 1,62,427. He computed tax thereon at 60 per cent in terms of section 113 of the 1961 Act amounting to Rs. 97,456 on which surcharge was levied at 17 per cent i.e., Rs. 16,504. The levy of surcharge was challenged by the assessee in…

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