1992 (12) TMI 30 - HC - Income Tax

Summary

Issues:
Constitutional validity of Chapter XX-C of the Income-tax Act, 1961; Interpretation of rule 48L regarding the filing of Form No. 37-1 before October 30, 1987; Opportunity to show cause before making an order under section 269UD.

Constitutional Validity of Chapter XX-C:
The petitioner challenged the constitutional validity of Chapter XX-C of the Income-tax Act, 1961, and the order made under section 269UD(1) of the Act. However, the Supreme Court had already upheld the constitutional validity of Chapter XX-C in a previous case. Therefore, the petitioner's contention was rejected as it was no longer open for challenge.

Interpretation of Rule 48L:
The dispute arose regarding the interpretation of rule 48L, which required the filing of Form No. 37-1 before October 30, 1987, for agreements entered into before the extension of Chapter XX-C to Bangalore. The petitioner argued that filing on the same day did not meet the requirement, while the Department contended that the entire day of October 30, 1987, was inclusive. Precedents were cited to support both interpretations, with the court noting that the word "before" could mean "up to" or "within but not later than." Ultimately, the court held that the statement filed on October 30, 1987, was valid, allowing the Department to act upon it.

Opportunity to Show Cause under Section 269UD:
It was argued that neither the petitioner nor respondent No. 4 had been given a reasonable opportunity to show cause before the order under section 269UD was made. This contention was not contradicted, leading to the quashing of the order. The court directed that the statement filed on October 30, 1987, should be treated as if filed on the day of the judgment, and the appropriate authority was instructed to consider it in accordance with the Supreme Court's previous order and the law.

In conclusion, the court upheld the constitutional validity of Chapter XX-C, interpreted rule 48L to allow the filing on the same day, and quashed the order under section 269UD due to the lack of opportunity to show cause. The judgment clarified the interpretation of statutory provisions and emphasized the importance of considering legislative intent and context in legal interpretation.