1990 (10) TMI 68 - HC - Income Tax

Summary

Issues Involved:
1. Constitutional validity of the amendment to Section 18(1) of the Karnataka Agricultural Income-tax Act.
2. Hardship faced by individual assessees due to different sources of agricultural income.
3. Hardship faced by companies, particularly tea companies, due to the amendment.
4. Requirement of accompanying documents for the return of the assessee-company.

Issue-wise Detailed Analysis:

1. Constitutional Validity of the Amendment to Section 18(1):
The petitioners challenged the constitutional validity of the amendment to Section 18(1) of the Karnataka Agricultural Income-tax Act, which changed the deadline for filing returns from "first June every year" to "expiry of four months from the end of the previous year." The court noted that the amendment aimed to bring uniformity in the filing of returns irrespective of the accounting period. The court found no undue hardship or undue restriction imposed on the assessee, and thus, rejected the contention that the amendment was unconstitutional.

2. Hardship Faced by Individual Assessees:
The petitioners argued that individual assessees with multiple sources of agricultural income would face difficulties in filing comprehensive returns within the new timeframe. The court illustrated this with the example of a petitioner whose accounting year ended on September 30, 1983, and noted that the amendment reduced the time for filing returns from nine months to four months. The court concluded that four months was a reasonable period for filing returns and did not constitute an unreasonably short time that would attract interference under Article 19 of the Constitution.

3. Hardship Faced by Companies, Particularly Tea Companies:
The petitioners contended that companies, especially those involved in growing and manufacturing tea, faced hardship due to the amendment. They argued that the computation of agricultural income could not be completed until the income under the Income-tax Act was assessed. The court referred to the Supreme Court's decision in Anglo-American Direct Tea Trading Co. Ltd. v. Commr. of Agrl. I. T., which stated that the Agricultural Income-tax Officer must await the completion of the assessment under the Income-tax Act before proceeding with the agricultural income assessment. The court found that tea companies were protected under the law and were not aggrieved by the amendment.

4. Requirement of Accompanying Documents for the Return of the Assessee-Company:
The petitioners argued that companies were required to submit returns with certain documents, such as the auditors' report and profit and loss account, which could cause hardship if the accounting period did not align with the financial year. The court clarified that the Act and Rules only required an audit report and did not mandate the submission of the balance-sheet or profit and loss account as approved at the annual general body meeting. The court concluded that this requirement did not constitute extraordinary hardship and upheld the amendment.

Conclusion:
The court dismissed all the writ petitions, concluding that the petitioners were not genuinely aggrieved by the amendment and could not challenge its constitutional validity. The court directed the parties to bear their own costs.