[ CIT v. Vatika Township P. Ltd., (2009) 314 ITR 338
(SC)]
In the case before the Supreme Court, the search and
seizure took place on October 6, 2001. An order of block assessment in terms
of S. 158BC was made in respect of the A.Ys. 1984 to 2003. The surcharge was
levied on June 30, 2003.
The question which fell for consideration before the High
Court was as to whether the proviso appended to S. 113 of the Income-tax Act,
1961, is clarificatory and/or curative in nature. The Delhi High Court
following its decision in CIT v. Devi Dass Malhan dismissed the appeal
holding that no substantial question of law arose from the finding of the
Tribunal that proviso is prospective in effect.
Before the Supreme Court in support of his contention that
the said proviso was retrospective in nature, the learned Additional Solicitor
General relied upon a Division Bench decision of the Supreme Court in CIT
v. Suresh N. Gupta, (2008) 297 ITR 322 (2008) 4 SCC 362, 379.
The Supreme Court held that as the said proviso was
introduced with effect from June 1, 2002, i.e., with prospective effect
and by reason thereof, tax chargeable u/s.113 of the Income-tax Act is to be
increased by surcharge levied by a Central Act, it was of the opinion that
keeping in view the principles of law that the taxing statute should be
construed strictly and a statute, ordinarily, should not be held to have any
retrospective effect, it was necessary that the matter be considered by a
larger Bench.
