In Brief
The Supreme Court held that in block assessment proceedings under Chapter XIV-B, interest under Section 158BFA(1) is leviable for late filing of return even without a notice under Section 158BC being served on persons other than searched persons, and is leviable from the start of the delayed filing period regardless of when the obligation to pay tax along with the return was introduced. However, the Court held that surcharge under Section 113 is not leviable on block assessment undisclosed income unless specifically stipulated by statute with reference to a particular date, which was done prospectively only from 1 June 2002. The appeals partly succeeded: the surcharge liability was discharged, but the interest liability was upheld.
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