9911796707
TMI Blog2022 (3) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... and setting aside the impugned order dated 19.06.2020 [Annex.-A] passed by the Respondent No.1 rejecting the claim of deduction u/s. 80IA(4) r.w.s. 80A(5) of the Act for A.Y. 2015-16 and directing the Respondent No.1 allow the claim of deduction u/s. 80IA(4) r.w.s. 80A(5) of the Act. (b) to issue a writ of certiorari or in the nature of certiorari or any other appropriate writ, orders or directions holding the provisions of section 80A(5) as ultra-virus the Constitution of India or in alternative this provisions may be read down as applicable only during the assessment proceedings before the assessing officer and not restricting the powers of the Respondent No.1 or any appellate authority to consider the claim of deduction, relief which is not claimed in the return of income filed by the assessee. (c) Pending the hearing and final disposal of this petition to maintain status quo in the matter and ask the Respondent No.1 and its subordinates not to take any action or to do anything in furtherance and pursuance of this impugned order. (d) To allow this Petition with cost. (e) To pass any further or other orders as the Hon'ble Court may deem proper in the interest of justice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he claim for the first time in revision under Section 264 of the Act, the deduction cannot be allowed to the writ applicant - assessee in view of sub section (5) of Section 80A of the Act. Hence, the writ applicant company has approached this Court essentially challenging the aforesaid order dated 19.06.2020 passed by the Principal Commissioner of Income Tax-3, Ahmedabad. 3. Before adverting to the principle relief sought for by the writ applicant company, at the outset, we would like to first deal with the second relief sought for by the writ applicant as regards the challenge to section 80A(5) as ultra-virus the Constitution of India with a prayer to read down the aforesaid provision. This Court, upon hearing Mr. S.N.Divatia, the learned counsel appearing for the writ applicant, vide order dated 15.11.2021 was pleased to issue Notice calling upon the respondents to respond to the various contentions raised by the writ applicant. The order dated 15.11.2021 reads thus: "1. The petitioner is before this Court by way of the petition under Article 226 of the Constitution of India, it challenges the validity of the order passed under Section 264 of the Income Tax Act, 1961, whereby ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service, direct service is permitted through speed post as well as e-mode. 4. Mr. S.N. Divatia, the learned counsel appearing for the writ applicant has tried to persuade this Court by emphasizing that the disallowance of the claim of deduction under Section 80A(5) of the Act is patently illegal, bad in law and without jurisdiction. Mr. Divatia, has submitted that the insertion of Section 80A(5) has resulted into giving inequal treatment to one set of assessees in similar situated facts in the sense that the class of assessees, who are otherwise eligible for deduction, by virtue of insertion of sub section (5) of Section 80A would made the claim of deduction redundant, though such assessees may otherwise fulfill all the other conditions required to get deduction. Mr. Divatia, has tried to persuade this Court by referring to Article 14 of the Constitution of India vis-a-vis the amendment brought in the statute book more particularly, by referring to explanatory notes to the provisions of the Finance(2) Act, 2009 dated 03.06.2010. 5. We may note that so far as the aspect of determination of constitutionality of statutory provision is concerned, it has been held in number of decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utional portion retaining the constitutional portion. 68. We may now deal with the last submission of the learned Attorney General on the point. Said the learned Attorney-General that principle of severability cannot be applied to augment the class and to adopt his words 'severance always cuts down the scope, never enlarges it'. We are not sure whether there is any principle which inhibits the Court from striking down an unconstitutional part of a legislative action which may have the tendency to enlarge the width and coverage of the measure. Whenever classification is held to be impermissible and the measure can be retained by removing the unconstitutional portion of classification, by striking down words of limitation, the resultant effect may be of enlarging the class. In such a situation, the Court can strike down the words of limitation in an enactment. That is what is called reading down the measure. We know of no principle that 'severance' limits the scope of legislation and can never enlarge it." The basis of the practice of reading down was succinctly laid down in Commissioner of Sales Tax, Madhya Pradesh, Indore Ors. v. Radhakrishan and Ors. MANU/SC/03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, Ray, J. observed: "On a proper consideration of the cases cited hereinbefore as well as the observations of Seervai in his book 'Constitutional Law of India' and also the meaning that has been given in the Australian Federal Constitutional Law by Coin Howard, it is clear and apparent that where any term has been used in the Act which per se seems to be without jurisdiction but can be read down in order to make it constitutionally valid by separating and excluding the part which is invalid or by interpreting the word in such a fashion in order to make it constitutionally valid and within jurisdiction of the legislature which passed the said enactment by reading down the provisions of the Act. This, however, does not under any circumstances mean that where the plain and literal meaning that follows from a bare reading of the provisions of the Act, Rule or Regulation that it confers arbitrary, un-cancalised, unbridled, unrestricted power to terminate the services of a permanent employee without recording any reasons for the same and without adhering to the principles of natural justice and equality before the law as envisaged in Article 14 of the Constitution, cannot be read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase was that whether the Commissioner was justified in exercise of powers conferred under Section 264 of the Act in rejecting the revision application more particularly, when the assessee had failed to raise the claim of deduction under Section 80-IB(10) and subsequently being raised before the Commissioner for the first time in revision. It appears that the attention of the Court was drawn to Section 80A(5) of the Act and similar contention was raised by the assessee therein. The Bombay High Court after considering the submissions of the assessee therein as well as taking note of sub section (5) which was inserted in Section 80A of the Act by Finance(2) Act, 2009 with retrospective effect from 01.04.2003, ultimately held as under: "5. As per this provision, where the assessee fails to make a claim in his return of income for any deduction under Section 10A or Section 10AA or Section 10B or Section 10BA or under any provision of the said Chapter - VI A under the heading "C. Deduction in respect of certain incomes", no deduction would be allowed to him under the said provision. In plain terms, this Sub Section (5) of Section 80A of the Act imposes an additional condition for claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt or refuse relief and the power to pass such order in revision as he may think fit. The discretion which the CIT has to exercise is undoubtedly to be exercised judicially and not arbitrarily according to his fancy. Therefore, subject to the limitation prescribed in S. 264, the CIT in exercise of his revisional power under the said section may pass such order as he thinks fit which is not prejudicial to the assessee. There is nothing in S. 264 which places any restriction on the CIT's revisional power to give relief to the assessee in a case where the assessee detects mistakes on account of which he was over assessed after the assessment was completed. We do not read any such embargo in the CIT's power as read by the CIT in the present case. It is open to the CIT to entertain even a new ground not urged before the lower authorities while exercising revisional powers. Therefore, though the Petitioner had not raised the grounds regarding under-totalling of purchases before the ITO, it was within the power of the CIT to admit such a ground in revision. The CIT was also not right in holding that the over-assessment did not arise from the order the assessment. Once the Petitioner was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication in Sub Section (5) of Section 80A of the Act as to why the restriction contained therein amounts to limiting the power of Assessing Officer but not that of Commissioner. 9. This issue can be looked from slightly different angle. In absence of the provision contained in Sub Section (5) of Section 80A of the Act has held by various decisions of the High Courts noted above, the CIT could entertain a fresh claim in Revision Application even if the claim was not made previously before the Assessing Officer. Provision contained in sub-section (5) of Section 80A is a statutory interdict which would prevent the CIT from granting any such claim in exercise of his revisional jurisdiction under Section 264 of the Act. As is often times stated, even High Court in exercise of Writ jurisdiction under Article 226 of the Constitution of India would not issue directions contrary to statutory provisions. Width of the powers of the CIT under Section 264 of the Act would not permit him to ignore the requirement of Section 80A(5) of the Act or allow the claim of an assessee in breach of the condition contained therein. We are therefore not in agreement that the expression given by the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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