SEVA RAM Vs. INCOME TAX OFFICER
LAWS(J&K)-1982-11-3
HIGH COURT OF JAMMU AND KASHMIR
Decided on November 12,1982

SEVA RAM Appellant
VERSUS
INCOME-TAX OFFICER Respondents

JUDGEMENT

G.M.Mir, J. - (1.) THIS is a petition under Article 226 of the Constitution of India read with Section 103 of the J and K State Constitution for the issuance of a writ of certiorari or any other writ, order or direction, quashing the order of respondent No. 1 and for declaring Section 140A(3) of the I.T. Act, 1961, as ultra vires the Constitution.
(2.) IT has been alleged that the petitioner filed the requisite return of income-tax for the years 1972-73 and the income-tax assessed on the basis of that return was more than Rs. 500. The petitioner deposited the income-tax within 30 days from the date of the filing of the return. But the petitioner failed to deposit the tax within the time given and because of this the ITO proceeded to penalise the petitioner under Section 140A(3) of the I.T. Act, vide his show-cause notice No : Penl. /73-74, etc. He imposed a penalty of Rs. 110 on the petitioner. It has been urged in this petition that Section 140A(3) of the I.T. Act of 1961 was ultra vires Article 19 of the Constitution of India as the power to levy the penalty for non-payment of tax was confiscatory in nature and as such violative of Article 19 of the Constitution. Moreover, the power to levy penalty for non-payment of tax which had become payable was neither incidental nor ancillary to the power to tax income and, therefore, Section 140A(3) of the Act was beyond the legislative competence of Parliament. It has been, therefore, prayed that Section 140A(3) of the I.T. Act, 1961, may be declared void and the respondents directed not to recover any penalty from the petitioner. In the reply-affidavit respondent No. 1 has stated that the petition was misconceived and would not lie. It has been averred that Section 140A(3) of the I.T. Act was not ultra vires of Article 19 of the Constitution of India as the penalty was to be levied only in cases of breach of statutory obligations to be performed within the prescribed period and was not a confiscatory provision either. It has been next stated in the reply-affidavit that the power to levy penalty was certainly an incidental and ancillary power of the taxing authority and this power was within the legislative competence of Parliament.
(3.) I have heard learned counsel for the parties at length. Learned counsel for the petitioner has referred me to a case decided by the Madras High Court in A.M. Sali Maricar v. ITO [1973] 90 ITR 116. In that judgment, it has been held that Section 140A(3) was ultra vires the Constitution, After the judgment of the Madras High Court, Parliament made certain amendments in Section 140A(3). It has been argued by the learned counsel for the petitioner that the reasoning given in the judgment of the Madras High Court was sound, legal and, therefore, must be followed by this court in disposing of this case.;


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