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TMI Blog1990 (9) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... ount. The Income-tax Officer, on March 30, 1987, rejected the claim. The Commissioner of Income-tax (Appeals), on June 12, 1987, directed the Income-tax Officer to reframe the assessment order. Thereafter, in the assessment order passed on March 30, 1990, the Income-tax Officer held that the amount of Rs. 4 crores cannot be deducted as "section 40A(9) brought in by the Finance Act, 1984, with retrospective effect from April 1, 1980, specifically provides that such contributions are not to be allowed as deductions". The company perhaps is pursuing its remedy before the appellate authority. The instant writ petition was filed by the company on August 17, 1984, against the Union of India, the Commissioner of Income-tax, North Eastern Region, Shillong, and the Inspecting Assistant Commissioner of Incometax, Assessment Range-II, Gauhati, to declare sub-sections (9), (10) and (11) of section 40A of the Income-tax Act, 1961, ultra vires articles 14, 265 and 300A of the Constitution of India. In this case, the Union of India has not filed any return and is also not represented, though the issues raised affect the vires of the three sub-sections of section 40A of the Income-tax Act, 1961. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the three sub-sections (in section 40A) were inserted to check evasion of taxes and, therefore, payments made after March 1, 1984, can neither be deducted as expenditure nor recovered as "unspent" amounts. Whether any other date can be substituted in the impugned sub-sections (10) and (11), the Revenue explained that it was for Parliament to decide the feasibility of insertion of a date and it was not for the court to probe or discover justification for substitution of another date or to dislodge the inserted date. The impugned provisions, it is averred by the Revenue, are enforced against all assessees in the country uniformly only and, therefore, the Assam Frontier Tea Company is in no way discriminated against. The principal contention that is raised thus in the petition is the issue of discrimination under article 14 of the Constitution. For considering violation of article 14, no other material is relied on to support the assertion except what is set out above in the pleadings. From the above facts, we are unable to hold that the petitioner has succeeded in establishing any violation of article 14 of the Constitution. All assessees who paid contributions before March 1, 198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons were not made. The Government intended to plug the loopholes and see that the Exchequer collected the dues from the assessees. The Finance Minister estimated that one hundred crores of rupees by way of taxes were lost to the Revenue by the erring employers. The Finance Minister stated "several cases have come to notice where taxpayers do not discharge their statutory liability such as in respect of excise duty, employer's contribution to provident fund, Employees' State Insurance Scheme, for long periods of time. For the purpose of their income-tax assessments, they none the less claim the liability as deduction even as they resort to legal action, thus depriving the Government of its dues while enjoying the benefit of non-payment. To curb such practices I propose to provide that irrespective of the method of accounting followed by the taxpayer, a statutory liability will be allowed as a deduction in computing the taxable profits only in the year and to the extent it is actually paid. This would result in revenue gain of Rs. 100 crores in a full year and Rs. 80 crores in 1983-84." In the above speech, it was shown that some sort of fraud was practised by some employers to avoid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 4 crores with two associations, one is only led to believe that the company intended to donate the amounts to the two associations and not intended to claim the amounts as expenditure incurred by them. In this case, we make it clear that we are not considering the bona fides of the payments made by the company. May be the company has eight tea gardens, employs 14,500 workers and expends Rs. 70 lakhs every year for welfare measures. These facts, if they are true, may form an excellent background and lend a large measure of credence to the assertion made by the petitioner-company. But that is not the question at issue raised in the instant petition. Learned counsel for the petitioner heavily relied on the case in D. S. Nakara v. Union of India, AIR 1983 SC 130, to read down the date March 1, 1984, in sub- sections (10) and (11) to March 31, of that year, and cited a case in which the vires of the Liberalised Pension Scheme under the 1972 Pension Rules was assailed. Civil servants who retired before and after March 31, 1979, were found not treated alike in that case and, therefore, the Supreme Court held that though the scheme was valid, yet there was no justification for the cla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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