1969 (5) TMI 5 - HC - Income Tax

Section 288 of the Income-tax Act, 1961 - section 288(3) is not ultra vires to article 19 of the Constitution

Issues Involved:
1. Applicability of Section 288(3) of the Income-tax Act, 1961.
2. Constitutionality of Section 288(3) under Article 19(1)(g) of the Constitution.
3. Alleged violation of Article 14 of the Constitution by Section 288(3).

Issue-wise Detailed Analysis:

1. Applicability of Section 288(3) of the Income-tax Act, 1961:

The petitioner argued that Section 288(3) of the Income-tax Act, 1961, did not apply to him because, at the time of his resignation, he was not employed in the execution of the Act but was serving as an Assistant Controller of Estate Duty under the Estate Duty Act, 1953. He contended that his employment under the Estate Duty Act was independent of the Income-tax Act, and he was not an income-tax authority within the meaning of Sections 116 and 288(3) of the Act.

The court examined the relevant part of Section 288, which outlines the conditions under which an individual can act as an authorized representative and the restrictions imposed on former income-tax authorities. The court noted that the petitioner had served as an Income-tax Officer for more than three years and had resigned from his position. It was immaterial whether he was working as an Income-tax Officer immediately before his resignation. The court held that the petitioner met the requirements of Section 288(3), which disqualified him from representing any assessee for two years from the date of his resignation. The court concluded that the petitioner remained an income-tax authority within the meaning of Sections 116 and 288(3) of the Act, even while discharging duties under the Estate Duty Act.

2. Constitutionality of Section 288(3) under Article 19(1)(g) of the Constitution:

The petitioner argued that Section 288(3) infringed his fundamental right to practice any profession or to carry on any occupation, trade, or business guaranteed under Article 19(1)(g) of the Constitution. He contended that the restriction imposed by Section 288(3) was neither reasonable nor in the interest of the general public, as it deprived the public of his services, experience, and knowledge.

The court held that the petitioner's right to practice as an authorized representative was not a fundamental right guaranteed by the Constitution but was derived from Section 288 of the Act. The court noted that the Act could have required assessees to appear personally before income-tax authorities without allowing representation by authorized representatives. The restriction imposed by Section 288(3) was reasonable and limited to a period of two years, which could not be considered unreasonable. The court concluded that Section 288(3) did not violate Article 19(1)(g) of the Constitution, as it did not impose any unreasonable restrictions on the carrying on of a profession.

3. Alleged violation of Article 14 of the Constitution by Section 288(3):

The petitioner argued that Section 288(3) denied him equality before the law and was violative of Article 14 of the Constitution. He contended that the provision was a colorable piece of legislation and discriminated against him without any reasonable basis.

The court held that there were no specific allegations or requisite material to support the petitioner's claim that Section 288(3) violated Article 14. The presumption was always in favor of the constitutionality of an enactment, and the burden was on the petitioner to show a clear transgression of constitutional principles. The court referred to several Supreme Court decisions emphasizing the need for specific, clear, and unambiguous allegations to challenge the validity of a statute on the grounds of Article 14. The court concluded that the petitioner had failed to provide sufficient particulars to establish unlawful discrimination, and therefore, the claim under Article 14 could not be sustained.

Conclusion:

The petition was dismissed, with the court holding that Section 288(3) of the Income-tax Act, 1961, was applicable to the petitioner and did not violate Articles 19(1)(g) or 14 of the Constitution. The petitioner was disqualified from representing any assessee for a period of two years from the date of his resignation.

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