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6. We find no merit in the above arguments. We quote hereinbelow Article 271 of the Constitution of India and Section 4 of the 1961 Act, which read as follows:

271. Surcharge on certain duties and taxes for purposes of the Union. Notwithstanding anything in articles 269 and 270, Parliament may at any time increase any of the duties or taxes referred to in those articles by a surcharge for purposes of the Union and the whole proceeds of any such surcharge shall form part of the Consolidated Fund of India. Charge of income-tax.
(2) In respect of income chargeable under sub-section (1), income-tax shall be deducted at the source or paid in advance, where it is so deductible or payable under any provision of this Act.

7. The power to levy a surcharge on income-tax is traceable to Article 271 read with Entry 82 of List I of Seventh Schedule to the Constitution of India. That power is not traceable to Section 4 of the 1961 Act. Every year the Finance Act is enacted by Parliament to give effect to the financial proposals of the Central Government. The rate at which a charge on the total income of the previous year is imposed under Section 4(1) of 1961 Act is not laid down in the Income-tax Act and, therefore, the said section provides that the charge has to be fixed by the Central Act. It is because of this, that income-tax is levied at different rates under the Finance Act. It must be borne in mind that the Income-tax Act deals with tax on income and nothing else. Therefore, in order that the charge should be a legal charge under Section 4, it must be a tax on the income of the assessee. If the charge is the tax on anything else, then it would not be a valid charge. This is the only limitation upon the power or authority of Parliament to fix any rate it pleases. So long as the charge is on total income of the previous year, there is no limitation upon the power or authority of Parliament to fix any rate it pleases. However, if rate is understood to mean the fixing of the tax irrespective of total income and unconnected with total income, then, in our view, Parliament would be travelling outside the ambit of Section 4(1). The Income-tax Act, therefore, contains an elaborate machinery for ascertaining total income of an assessee. If Parliament has power to fix tax at a rate which has no connection with the total income, then the machinery set up under the 1961 Act becomes infructuous. In our view, Section 4(1) prescribes the subject matter of the tax and the rate of that tax is prescribed by the Legislature, either under the Act as in the case of Section 113 or vide the Finance Act. As long as the charge is on total income of the previous year and so long as the rate relates to the subject matter of the tax, there is nothing to prevent Parliament from fixing the rate. But the rate must be applied to the total income and the tax that an assessee has to pay must be at the rate in respect of total income of the previous year.

8. Having discussed the scope of Article 271 and Section 4 of the 1961 Act, we have to look at some of the relevant provisions of Chapter XIV-B. The purpose of this Chapter is to lay down a special procedure for assessment of surcharge cases with a view to combat tax evasion and also to expedite and simplify assessments in search cases. Undisclosed incomes have to be related in different years in which income was earned under block assessment. This is because in such cases, the block period is for previous years relevant to 10/6 assessment years and also the period of the current previous year up to the date of the search, i.e., from 1.4.2000 to 17.01.2001, in this case. The essence of this new procedure, therefore, is a separate single assessment of the undisclosed income, detected as a result of search and this separate assessment has to be in addition to the normal assessment covering the same period. Therefore, a separate return covering the years of the block period is a pre- requisite for making block assessment. Under the said procedure, Explanation is inserted in Section 158 BB, which is computation section, explaining the method of computation of undisclosed income of the block period.