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TMI Blog1990 (3) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1976, has to be considered as a payment of surcharge within the meaning of rule 2(i) of the First Schedule to the Surtax Act is a debatable issue and in that view cancelling the order passed under section 13 of the Surtax Act ? The assessment year involved is 1977-78. The facts, as found by the Tribunal, are as under : "The facts, in brief, are that the Surtax Officer, by his order dated January 20, 1979, determined the net chargeable profit under section 6(2) of the Act at a sum of Rs. 16,65,219 and determined the surtax payable by the assessee-company for the assessment year 1977-78 at a sum of Rs. 6,49,272. In computing the aforesaid net chargeable profit, the Surtax Officer deducted the income-tax payable by the company at a sum of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment should be revised on the basis of the Tribunal's order in STA No. 16 (Cal.) of 1980, dated May 16, 1981. Subsequently, by two separate orders dated November 5, 1981, both the income-tax and the surtax assessment orders were revised on the basis of the Tribunal's orders dated March 13, 1980, relating to the income-tax assessment, and order dated May 15, 1981, pertaining to the surtax assessment for the assessment year 1977-78. In revising the surtax assessment, the amount deposited with the Industrial Development Bank of India amounting to Rs. 1,49,495 which was allowed by the Surtax Officer in his order dated March 7, 1979, was withdrawn. The net chargeable profit was computed at a sum of Rs. 15,56,030 as against the net cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the Companies (Profits) Surtax Act, 1964, deduction was to be made in respect of income-tax including surtax paid in the form of deposits under the Companies Deposits (Surcharge on Income-tax) Scheme, 1976. It was the assessee's case before the Tribunal that since the Surtax Officer was in doubt whether deposit in lieu of surcharge was to be deducted in computing the chargeable profits for the assessment year under consideration, as also the fact that the Delhi Bench of the Tribunal was of the view that the surtax paid in the form of deposits was to be deducted in computing the chargeable profits under rule 1(i), it was clear that the matter fell beyond the scope of section 13 of the Companies ( Profits ) Surtax Act, 1964. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vances that the assessee was denied proper opportunity before the impugned rectification order was passed by the Surtax Officer is indeed correct. The notice of rectification dated June 5, 1981, which the assessee's learned counsel produced for our perusal did not contain the reasons for which the rectificatory action was proposed by the Surtax Officer. The Surtax Officer apparently sought to revise the earlier order under section 13(1) dated March 7, 1979, but on a Perusal of the notice issued under section 13, we find that it refers to the Surtax Officer's order under section 13(1) dated April 16, 1980, for the assessment year 1977-78. According to the assessee's learned counsel, there was no such order of the Surtax Officer dated April 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Companies (Profits) Surtax Act, 1964, the Special Bench of the Tribunal held that the word 'deposit' could not be equated with the word 'payment'. There can be no doubt that the issue being debatable, the matter cannot come within the ambit of section 13 of the Companies (Profits) Surtax Act. In that view of the matter, we hold that the Commissioner (Appeals) was wrong in deciding the issue against the assessee. We would, accordingly, direct the Surtax Officer to revise his order under section 13 dated November 5, 1981, by recomputing the chargeable profits after deducting the deposit of Rs. 1,49,495 made with the Industrial Development Bank of India." The controversy whether deposits under the Companies Deposits (Surcharge on Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were produced by the parties to show that different Benches had taken conflicting views on the issue. Reference was made to the President for constituting a Special Bench. The proposal was accepted and hence this appeal before the Special Bench. " It has been contended that the question that is now being raised could not be treated as a rectifiable error when the rectification proceedings were taken by the Income-tax Officer. Not only were two views possible about the controversy but two views were actually taken by different Benches of the Tribunal and a Special Bench had to be set up to resolve the conflicting views between the Tribunals. The language of section 13 of the Surtax Act is similar to the language of section 154 of the 1961 A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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