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TMI Blog2020 (11) TMI 876X X X X Extracts X X X X X X X X Extracts X X X X ..... he challenge to the vires of Section 40(a)(iib) of the Income Tax Act on merits. As the High Court has not decided the issue with respect to vires of Section 40(a)(iib) of the Income Tax Act on merits, the matter is required to be remanded to the High Court to decide the writ petition on merits and decide the question with respect to challenge to the vires of Section 40(a)(iib) of the Income Tax Act on merits. The present appeal succeeds. The impugned judgment and order passed by the High Court is hereby quashed and set aside and the matter is remitted to the High Court to decide the writ petition on merits with respect to challenge to the vires of Section 40(a)(iib) - However, it is made clear that we have not expressed any opinion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writ petitioner, the said provision is discriminatory and violative of Article 14 of the Constitution of India, inasmuch as there are many Central Government undertakings which have not been subjected to any such computation of income tax and are enjoying exemption. At this stage it is required to be noted that a show cause notice was issued by the assessing officer for the Assessment Year 2017-18 stating that the VAT expense levied on the appellant is an exclusive levy by the State Government and therefore squarely covered by Section 40(a)(iib) of the Income Tax Act and therefore VAT expenditure is not allowable as deduction in accordance with Section 40(a)(iib) of the Income Tax Act, while computing the income of the appellant. That the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Having heard Shri Rakesh Dwivedi, learned Senior Advocate appearing on behalf of the appellant and Shri K.M. Natraj, learned Additional Solicitor General appearing on behalf of the Union of India and others and considering the impugned judgment and order passed by the High Court by which the High Court has dismissed the said writ petition without deciding the vires of Section 40(a)(iib) of the Income Tax Act on merits, we are of the firm opinion that the impugned judgment and order passed by the High Court is not sustainable at all. 5. When the vires of Section 40(a)(iib) of the Income Tax Act were challenged, which can be decided by the High Court alone in exercise of powers under Article 226 of the Constitution of India, the High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a by not deciding the writ petition on merits and not deciding the challenge to the vires of Section 40(a)(iib) of the Income Tax Act on merits. 6. In view of the above and as the High Court has not decided the issue with respect to vires of Section 40(a)(iib) of the Income Tax Act on merits, the matter is required to be remanded to the High Court to decide the writ petition on merits and decide the question with respect to challenge to the vires of Section 40(a)(iib) of the Income Tax Act on merits. 7. In view of the above and for the reasons stated above, the present appeal succeeds. The impugned judgment and order passed by the High Court is hereby quashed and set aside and the matter is remitted to the High Court to decide the w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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