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Issues involved:
The controversy relates to Block Period from 1.4.1989 to 9.2.2000. The issues include the levy of surcharge under Section 113 of the Income Tax Act, 1961 and the addition of undisclosed income for assessment years 1994-1995, 1995-1996, and 1996-1997. The judgment pertains to a case where a search and seizure operation was conducted under Section 132(1) of the Income Tax Act, 1961 at Krishna Kumar Gupta group of cases, leading to proceedings against the assessee. The assessee filed a block return declaring undisclosed income, which was assessed by the Assessing Officer under Section 158BC. The tax liability was computed at 60% on the total undisclosed income, with an additional surcharge levied. The assessee appealed against this order, and the CIT(A) directed the Assessing Officer not to charge surcharge. The tribunal upheld this decision, leading to the present appeal. Substantial Question of Law 1: The first substantial question of law raised in the appeal was whether the Income Tax Appellate Tribunal was justified in deleting the surcharge levied by the Assessing Officer. The Court referred to a judgment of the Supreme Court and held that even prior to the amendment in Section 113 of the Act, surcharge was leviable for block assessments. The Court further noted that the amendment made was clarificatory in nature. Consequently, this question was decided in favor of the revenue against the assessee. Substantial Question of Law 2: The second substantial question of law concerned the deletion of an addition made on account of undisclosed income for certain assessment years. The Court noted that the tax effect was less than four lacs, as per a Circular dated 25.6.2005, and therefore, this question did not require adjudication. As a result, the appeal was decided accordingly.
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