2020 (12) TMI 1038 - HC - Income Tax

Petitioner locus standi to file present petition - PIL - issuance of a writ quashing Section 194 A(3) (ixa) of Income Tax Act, 1971 which mandates to deduct tax upon the interest accrued upon the award/Compensation granted by Motor Accident Claim Tribunal (MACT) by holding the same as unconstitutional and in the direct conflict with the object and spirit of the social welfare legislation i.e. Motor Vehicle Act, 1988 - HELD THAT - Settled principle of law is that an aggrieved person must approach the Court. The Standing doctrine characteristic is that a potential litigant must be injured by the action it is challenging. In the opinion of this Court, the petitioner is a stranger having no right and/or fundamental right to any award/Compensation granted by Motor Accident Claim Tribunal (MACT). As the petitioner is not an aggrieved person, this Court is in agreement with the submission advanced by the learned counsel for respondent, that the petitioner has no locus standi to maintain the present petition. Standing for individuals has been relaxed by Indian Courts by entertaining public interest litigation (hereinafter referred to as the PIL) in the event the person aggrieved is too poor or does not have the means to approach the Court. In fact in a PIL case, there need be no litigant, if a problem is deemed by the Court as worthy of attention. The concept of PIL is linked to the enforcement of social and economic rights in India. Accordingly, present writ petition is dismissed. It is clarified that the petitioner may file a PIL in accordance with law in a proper format with necessary disclosures, affidavits and undertakings as prescribed. The rights and contentions of all the parties in the PIL, if any, to be filed are left open.

Summary

Issues:
1. Challenge to the constitutional validity of Section 194 A(3) (ixa) of Income Tax Act, 1971.
2. Locus standi of the petitioner to file the present petition.
3. Consideration of public interest litigation (PIL) in case of lack of means by the aggrieved person.

Analysis:
1. The petitioner filed a writ petition seeking to quash Section 194 A(3) (ixa) of the Income Tax Act, 1971, which mandates tax deduction on interest accrued from awards/compensation by Motor Accident Claim Tribunals (MACT). The petitioner argued that this provision is unconstitutional and conflicts with the Motor Vehicle Act, 1988. The CBDT had earlier held that taxing the interest accrued is justified. The court considered the petitioner's argument but ultimately dismissed the petition challenging the constitutional validity of the tax deduction provision.

2. The respondent contended that the petitioner lacked locus standi to file the petition. The petitioner, citing a Supreme Court judgment, argued that a person need not be a stranger to the issue to have standing in court. However, the court held that the petitioner, not being an aggrieved person with a direct right to the award/compensation from MACT, lacked standing to maintain the petition. The court emphasized that a potential litigant must be injured by the action being challenged.

3. While dismissing the petition due to lack of locus standi, the court acknowledged that Indian courts allow for public interest litigation (PIL) in cases where the aggrieved person is unable to approach the court due to poverty or lack of means. The court explained that in a PIL, there may not even be a specific litigant if the issue is of public importance. The court advised the petitioner to file a PIL if necessary, following the prescribed procedures with proper disclosures and undertakings. This approach is linked to the enforcement of social and economic rights in India, providing an avenue for addressing issues affecting the public interest.

In conclusion, the court dismissed the writ petition due to the petitioner's lack of standing but left open the option for the petitioner to pursue the matter through a PIL if deemed appropriate. The judgment emphasized the importance of standing in legal proceedings while also recognizing the role of PIL in addressing broader societal concerns.