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TMI Blog2022 (3) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... We are conscious that in absence of the provision contained in Section 80A (5) of the Act, the Petitioners could have maintained the claim of deduction even before the CIT for the first time in Revision Application, though no such claim was made before the Assessing Officer, if from the facts on record, the Petitioners could sustain the said claim in law. This is very clear from the series of Judgments of various High Courts. No error of law in the impugned order passed by the Principal Commissioner of Income Tax-3, Ahmedabad. - R/SPECIAL CIVIL APPLICATION NO. 16364 of 2021 - - - Dated:- 15-2-2022 - HONOURABLE MR. JUSTICE J.B.PARDIWALA AND HONOURABLE MS. JUSTICE NISHA M. THAKORE Appearance: MR SN DIVATIA(1378) for the Petitioner(s) No. 1 for the Respondent(s) No. 1 M R BHATT CO.(5953) for the Respondent(s) No. 1 NOTICE SERVED for the Respondent(s) No. 2 ORAL ORDER (PER : HONOURABLE MS. JUSTICE NISHA M. THAKORE) 1. By this writ application under Article 226 of the Constitution of India, the writ applicant challenges the validity of the order dated 19.06.2020 passed by the Principal Commissioner of Income Tax 3, Ahmedabad, under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn of income as well as after examining documents filed by the writ applicant, the assessment order came to be passed on 09.11.2017 thereby making an addition under Section 36(1) (va) of the Act and interest thereon determining total income to the tune of ₹ 3,85,48,984/-. 2.3 Being aggrieved and dissatisfied by the aforesaid addition made by the Assessing Officer, the writ applicant preferred Revision before the Principal Commissioner of Income Tax-3, Ahmedabad by invoking section 264 of the Act essentially for the first time claiming deduction under section 80IA of the Act which otherwise was never claimed nor allowed by the Assessing Officer. The Principal Commissioner of Income Tax -3, Ahmedabad upon considering the aforesaid contention of the writ applicant, called for the report from the Assessing Officer. The report came to be submitted by the Assessing Officer on 31.01.2020 which was taken upon record of the revision and due opportunity of hearing was given to the writ applicant to respond to the same. Ultimately, after considering the facts of the case, the report of the Assessing Officer and upon careful consideration of the submissions made by the writ applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejecting the claim of deduction u/s. 80IA (4) r.w.s. 80A(5) of the Act for A.Y. 2015-2016 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 and the circumstances of the case. 4. We have extensively heard the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The aforesaid broad principles as regards the determination of the constitutional validity of statutory provision has been consistently followed in canon of judgments. Few pronouncement on the above principles as regards the determination of constitutionality of the statutory provision can be illusinated in the case of D.S. Nakara and Ors. v. Union of India (UOI), reported in (1983) 1 SCC 305 , a Constitution Bench of Supreme Court elucidated upon the practice of reading down statutes as an application of the doctrine of severability while answering in affirmative the question whether differential treatment to pensioners related to the date of retirement qua the revised formula for computation of pension attracts Article 14 of the Constitution. Some of the observations made in that judgment are extracted below: 66. If from the impugned memoranda the event of being in service and retiring subsequent to specified date is severed, all pensioners would be governed by the liberalised pension scheme. The pension will have to be recomputed in accordance with the provisions of the liberalised pension scheme as salaries were required to be recomputed in accordance with the recommen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n giving a liberal interpretation to the section in order to avoid constitutional invalidity. These principles have given rise to rule of reading down the section if it becomes necessary to uphold the validity of the sections. In Minerva Mills Ltd. and Ors. V. Union of India (UOI) and Ors. MANU/SC/0075/1980 : (1980) 3 SCC 625 , the Court identified the limitations upon the practice of reading down: 69. The learned Attorney General and the learned Solicitor General strongly impressed upon us that Article 31C should be read down so as to save it from the challenge of unconstitutionality. It was urged that it would be legitimate to read into that Article the intendment that only such laws would be immunised from the challenge Articles 14 and 19 as do not damage or destroy the basic structure of the Constitution. The principle of reading down the provisions of a law for the purpose of saving it from a constitutional challenge is well-known. But we find it impossible to accept the contention of the learned Counsel in this behalf because, to do so will involve a gross distortion of the principle of reading down, depriving that doctrine of its only or true rationale when word ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or after. Such power can be exercised to the extent of inconsistency with the Constitution/contravention of Part III. (ii) There is a presumption of constitutionality in favour of all laws, including pre-Constitutional laws as the Parliament, in its capacity as the representative of the people, is deemed to act for the benefit of the people in light of their needs and the constraints of the Constitution. (iii) The doctrine of severability seeks to ensure that only that portion of the law which is unconstitutional is so declared and the remainder is saved. This doctrine should be applied keeping in mind the scheme and purpose of the law and the intention of the Legislature and should be avoided where the two portions are inextricably mixed with one another. (iv) The court can resort to reading down a law in order to it from being rendered unconstitutional. But while doing so, it cannot change the essence of the law and create a new law which in its opinion is more desirable. 6. In light of the aforesaid legal position as regards the determination of constitutionality of statutory provision is concerned, we are not inclined to go into the aspect of the validity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of Section 80A of the act. 6. We are conscious that in absence of the provision contained in Section 80A (5) of the Act, the Petitioners could have maintained the claim of deduction even before the CIT for the first time in Revision Application, though no such claim was made before the Assessing Officer, if from the facts on record, the Petitioners could sustain the said claim in law. This is very clear from the series of Judgments of various High Courts. Reference can be made to the decision of High Court of Gujarat in case of C. Parikh Co. v. CIT [1980] 4 Taxman 224/122 ITR 610 . In the said decision, the Court held that: it is clear that under Section 264, the CIT is empowered to exercise revisional powers in favour of the assessee. In exercise of this power, the CIT may, either of his own motion or on an application by the assessee, call for the record of any proceeding under the Act and pass such order thereon not being an order prejudicial to the assessee, as the thinks fit. Sub ss. (2) and (3) of Section 264 provide for limitation of one year for the exercise of this revisional power, whether suo motu, or at the instance of the assessee. Power is also confe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords subject to the provisions of this Act in S. 264 (1) and read a restriction on his revisional power which does not exist. The CIT was, therefore, not right in holding that it was not open to him to give relief to the Petitioner on account of the Petitioner s own mistake which it detected after the assessment was completed. Once it is found that there was a mistake in making an assessment, the CIT had power to correct it under S. 264 (1). In our opinion, therefore, the CIT was wrong in not giving relief to the Petitioner in respect of over-assessment as a result of under totalling of the purchases to the extent of ₹ 20,000. 7. This was reiterated in case of Ramdev Exports v. CIT [2002] 120 Taxman 315/[2001] 251 ITR 873 (Guj.). This Court also in case of Danny Denzongpa v. CIT [2010] 7 taxmann.com 81/194 Taxman 415 [2012] 344 ITR 166, has taken a similar view. 8. However, the Petitioners are faced with the statutory provision contained in Sub Section (5) of Section 80A of the Act. The Petitioners claim cannot therefore be accepted de hors the said statutory provision and ordinary principle of the wide powers of the CIT exercising revisional jurisdiction un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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