1 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR -------------------------------------------------------- INCOME TAX APPEAL No.42 of 2006 THE COMMISSIONER OF INCOME TAX, UDAIPUR V/S SHRI KIRTI KUMAR SHAH Mr. K.K.BISSA, for the appellant / petitioner Date of Order : 18.8.2008 HON'BLE SHRI N P GUPTA,J. HON'BLE SHRI KISHAN SWAROOP CHAUDHARI,J. ORDER ----- This appeal is filed by the Revenue against the judgement of the Tribunal dated 06.05.2005, accepting the appeal of the assessee, and setting aside the orders of the Assessing Officer, and the Commissioner, Income Tax (Appeals), and thereby deleting the surcharge, as levied under Section 113 of the Income Tax Act, 1961. The appeal was admitted on 04.04.2006, by framing a substantial question, reading as under :- “Whether in the facts and circumstances of the case, the Tribunal was justified in holding that levy of surcharge while computing tax demand is debatable issue and hence non levy of it could not be made subject matter of application for rectification under Section 154 of the Income Tax Act, 1961.” 2 Thus, the question precisely comprehends the aspect, as to whether the levy of surcharge, while computing the tax demand is a debatable issue or not. Learned Assessing Officer has passed a very short order (Annex.4), holding, that on examination of assessment records it is noticed, that surcharge leviable has not been charged, and finding it to be a mistake apparent from record, it was purportedly rectified, and the demand notice was issued. The matter was carried in appeal, which was dismissed by learned Commissioner, vide order dated 05.02.2004. It is a different story, that the certified copy of that order, which was required to be filed in this appeal, has not been filed. However, learned counsel made available for our perusal the certified copy thereof, and a look at that judgement shows, that in Para 3, the contention of the assessee was noticed, about the proviso to Section 113 being not retrospective, and for that purpose, two judgements of Hon'ble Supreme Court were cited, then three judgements of ITAT, Jaipur were cited, and two more judgements were cited. Likewise, judgements of Hon'ble Supreme Court in ITO Vs. Volkart Brothers, reported in 82 ITR 50, was also cited to contend, that for invoking Section 154, the mistake apparent on record must be obvious, and patent mistake, and not something, which can be established by long drawn process of reasoning, on points, on which there may conceivably be two opinions. After noticing these contentions, the learned Commissioner 3 also found, that one interpretation ofcourse is that in cases where survey have been concluded after 01.06.2002, surcharge could be levied, and that this interpretation has not been considered by the ITAT, Jaipur, in cases cited by the assessee, and that the ITAT, Jaipur is also not categorical to held, that surcharge is to be levied only on cases where searches have been conducted after 01.06.2002. Then reference is made to a Circular of CBDT dated 04.08.1995, and thus the appeal was dismissed. The learned Tribunal has found, that it is undisputed fact, that the amended provision came into force w.e.f. 01.06.2002 only, and there cannot be two opinions, that non-charging of surcharges cannot be stated to be a mistake apparent on record, and that, any issue which is debatable one, cannot be subject matter of order under Section 154, and has relied upon the judgement of Hon'ble Supreme Court, in Volkart Brothers case. Arguing the appeal, the learned counsel for the Revenue relied upon the judgement of Hon'ble Supreme Court, in CIT Vs. Suresh N. Gupta, reported in 297 ITR 322 (SC), and read that judgement in extenso. In our view, the bare reading of the judgement of Hon’ble the Supreme Court in Suresh N. Gupta’s case, by itself made it clear, that it was by that judgement, that 4 Hon'ble Supreme Court proceeded to set at rest the controversy, as to whether the amendment in Section 113, made w.e.f. From 01.06.2002 is retrospective or prospective, and held it to be clarificatory and retrospective. That is the judgement rendered in the Year 2008. Even without anything else, even this judgement does make it clear, that at least, on the date, when the Tribunal passed the impugned order, the question about retrospective applicability of the amendment, made in Section 113, was very much a debatable question. In that view of the matter, the question, as framed, is required to be, and is, answered against the revenue. The appeal thus has no force, and is dismissed. The parties are left to bear their own costs. ( KISHAN SWAROOP CHAUDHARI ),J. ( N P GUPTA ),J. /mamta/