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8. Article 271 of the Constitution of India enables the Parliament to increase the duties or taxes referred in Article 269 and 270 by levy of surcharge. Therefore, it is very clear that the Parliament has power to prescribe the rate of tax under Article 270 of the Constitution of India and also to prescribe the rate for the purpose of surcharge over and above the rate of income tax under Article 271. In other words, the source of power for prescribing the rate of income tax and also the rate of surcharge flows from Article 265 read with Article 270 and 273 of the Constitution of India. The Parliament in their wisdom, while enacting Income Tax Act, 1961 left open the rate of tax on income to be decided by a Central Act namely, the Finance Act. Therefore, Section 4(1) refers to Central Act for the purpose of rate of tax. The reason for doing so is obvious. The rate of income tax has to be fixed by taking into consideration of the socio, economic scenario that exist in particular year. It does not mean that the source of power for prescribing rate of income tax flows from Section 4(i) of the Income Tax Act. The source of power for prescribing the rate of income tax remains with Parliament under Article 265 read with Article 270 of the Constitution of India. Likewise, the power to prescribe the rate in respect of surcharge remains with Parliament under Article 271 of the Constitution of India. Therefore, it may not be correct to say that merely because there was no reference about Central enactment in Section 113 of the Income Tax Act, as referred in Section 4(1), the Parliament cannot fix the rate of surcharge by a separate enactment in respect of surcharged In our considered opinion, what is required is an enactment by a legislature for the purpose of levying tax. Since income tax falls at Entry-82, List-1 of Schedule-VII to the Constitution of India, the Parliament alone can enact law for the purpose of levying tax on income. Likewise, the Parliament aline is competent to enact law for the purpose of levying surcharge on income tax. Section 4(1) of the Income Tax Act does not become the source of power for the Parliament to prescribe the rate of tax on income merely because there was a reference about Central Act. Likewise, the source of power for the purpose of levying surcharge remains under Article 271 of the Constitution of India. Therefore, merely because there was no reference about the Central Act in Section 113 of the Income Tax Act, it cannot be said that the Parliament cannot levy surcharge in respect of tax on undisclosed income by separate enactment. In our view, so long as the source of power flows from Article 271 of the Constitution of India, the Parliament can fix the rate of surcharge over and above the income tax levied under Section 113 of the Income Tax Act. It is for the Parliament either to make an amendment by incorporating a proviso in Section 113 of the Income Tax Act for the purpose of levying surcharge or to enact a separate Act like Finance Act. Since it is entirely within the domain of the Parliament, it may not be correct to say that surcharge can be levied only if an amendment was made in Section 113 of the Income Tax Act. Finance Act, 2001 is also a Central enactment which prescribes the rate of surcharge over and above the income tax prescribed under Section 113 of the Income Tax Act. The Apex Court in the case of CIT v. K. Srinivasan (supra) held as follows :-

Therefore, we find no substance in the objection of the assessee that there cannot be any levy of surcharge since there was no reference about Central Act in Section 113 of the I.T. Act. In our considered opinion, since the Parliament has enacted Finance Act, 2001 providing the levy of surcharge in respect of the income tax levied under Section 113, the lower authority has rightly levied the surcharge which is authorised by an authority of law.

9. The next submission of the learned counsel for the assessee is that the Chief Commissioners of Income Tax in their Conference expressed a doubt regarding levy of surcharge without any specific amendment in Section 113 of the Income Tax Act. Under the Income Tax Act, the Central Board of Direct Taxes (C.B.D.T.) was created as an administrative body to administer the direct taxes Act. The C.B.D.T. was also empowered to issue instructions and circulars under Section 119 of the Income Tax Act. Therefore, the statutory powers are vested only with the C.B.D.T. The Chief Commissioners are subordinate officers under the C.B.D.T. and they are expected to implement the instructions and guidance issued by the C.B.D.T. in exercise of its power under Section 119 of the Income Tax Act. No such statutory power was given to the Chief Commissioners of Income Tax. In our considered opinion, the Resolution passed by the chief Commissioners will not have a statutory force. Therefore, it will not bind on the quasi Judicial authorities established under the Income Tax Act. As already discussed, the source of power flows only from Articles 265, 270 and 271 of the Constitution of India for fixing rate of income tax and surcharge, there is no necessity for a separate reference about Central Act in Section 113 of the Income Tax Act. Therefore, we find no substance in the resolution of the Chief Commissioners. Even otherwise, the resolution passed by the Chief Commissioners of I.T. will not bind on this Tribunal. This Tribunal, being an Independent judicial body, is expected to examine the levy of surcharge in accordance with statutory provisions. Therefore, we find no justification in the contention of the assessee that there cannot be any levy of surcharge merely because the Chief Commissioners expressed their doubt.

11. The learned counsel for the assesses placed his reliance on the order of the Bangalore Bench of this Tribunal in the case of Microland Ltd. v. Asstt. CIT, (1998) 67 ITD 446 and also on the Madras Bench of this Tribunal in the unreported decision in IT (SS) A.No. 28(Mds)/2003. We have carefully gone through the orders of this Tribunal in the above said two cases. We find that the constitutional provisions and also the Finance Act, were not brought to the notice of the earlier Bench. Therefore, the earlier Bench has no occasion to discuss about Articles 265, 270 and 271 of Constitution of India and also the Finance Act, 2001. Therefore, in our view, the earlier orders of this Tribunal will not support the case of the assessed.

12. In view of the above discussion, we find that the Parliament in exercise of the power conferred upon it under Article 271 of the Constitution of India has enacted Finance Act, 2001 prescribing levy of surcharge at 17% over and above the rate of income tax levied under Section 113 of Income Tax Act in respect of the undisclosed income. Therefore, in our view, the assessing authority has rightly levied the surcharge. We find no infirmity in the order of the lower authority. Therefore, we have no hesitation to confirm the same. Accordingly, the orders of the lower authorities are confirmed.