Back
Karnataka High Court
H.A.K.RAO. - Appellant
Versus
UNION OF INDIA - Respondent
Decided On : 10-12-90
W.P. : 28329 of 1982
INCOME TAX - CHALLENGE TO CONSTITUTIONAL VIRES OF SECTION 44-AA OF INCOME TAX ACT, 1961 - The court found that there was no discrimination between enumerated and non-enumerated professions under Section 44-AA, as the enumerated professions were largely regulated by statutes and thus had more obligations to maintain accounts. The court also held that the objective of the Income Tax Act was to levy tax on persons with income from organized professions, and practicality guided the prescription of a monetary limit for maintaining accounts. The petition was rejected based on the absence of discrimination and the imposition of a financial limit on enumerated professions.
Fact of the Case:
The petitioner, a chartered accountant, challenged the constitutional vires of Section 44-AA of the Income Tax Act, 1961, alleging discrimination between enumerated and non-enumerated professions in terms of maintaining accounts for income tax purposes.
Finding of the Court:
The court found no discrimination between enumerated and non-enumerated professions under Section 44-AA, as the enumerated professions were largely regulated by statutes and had more obligations to maintain accounts. The court also held that the objective of the Income Tax Act was to levy tax on persons with income from organized professions, and practicality guided the prescription of a monetary limit for maintaining accounts. The petition was rejected based on the absence of discrimination and the imposition of a financial limit on enumerated professions.
Issues: Challenge to the constitutional vires of Section 44-AA of the Income Tax Act, 1961, alleging discrimination between enumerated and non-enumerated professions in terms of maintaining accounts for income tax purposes.
Ratio Decidendi: The court held that there was no discrimination between enumerated and non-enumerated professions under Section 44-AA, as the enumerated professions were largely regulated by statutes and had more obligations to maintain accounts. The court also emphasized that the objective of the Income Tax Act was to levy tax on persons with income from organized professions, and practicality guided the prescription of a monetary limit for maintaining accounts.
Final Decision: The petition was rejected, as the court found no discrimination and noted the imposition of a financial limit on enumerated professions.
( 1 ) IN THIS PETITION, PETITIONER WHO IS A chartered ACCOUNTANT HAS CHALLENGED THE CONSTITUTIONAL vires OF SECTION 44-AA OF THE INCOME tax ACT, 1961, INTER ALIA ON THE GROUND THAT BETWEEN the PROFESSIONS NOT ENUMERATED IN SUB-SECTION (1) of SECTION 44-AA AND OTHER PROFESSIONS a DISCRIMINATION IS MADE INASMUCH AS THE PROFESSIONS enumerated ARC REQUIRED TO MAINTAIN BOOKS of ACCOUNTS TO BE INSPECTED BY THE INCOME-TAX officer TO ASCERTAIN THEIR INCOME WHILE OTHER professions NOT SO ENUMERATED IN SUB-SECTION (1) but FALLING UNDER SUB-SECTION (2) IF THE INCOME exceeds THE AMOUNT MENTIONED IN THE SAID SUBSECTION are REQUIRED TO MAINTAIN THE ACCOUNTS. PRIMA FACIE WE DO NOT FIND ANY SUCH DISCRIMINATION because THE ENUMERATED PROFESSIONS UNDER sub-SECTION (1) TO SECTION 44-AA FALL DEFINITELY into A CATEGORY OF PROFESSIONS BY AND LARGE REGULATED by STATUTES WHICH IN TURN CAST MORE OBLIGATIONS on THOSE PERSONS TO MAINTAIN ACCOUNTS SUCH as LAWYERS, CHARTERED ACCOUNTANTS, DOCTORS, etc. THEREFORE, THE PETITIONER CANNOT PRESS INTO service ARTICLE 14, WHEN UNDER ARTICLE 14 CLASSIFICATION of PERSONS TO ACHIEVE THE PURPOSE OF a LEGISLATION IS PERMISSIBLE.
( 2 ) THE OBJECT OF THE INCOME TAX ACT IS TO SEE THAT TAX IS LEVIED ON PERSONS WHO HAVE INCOME from THE SOURCE OF PROFESSION AND ORGANISED professions OR PROFESSIONS WHICH ARE IN THE categories LIKE INTERIOR DECORATORS WHO CHARGE considerable FEE FOR THE SERVICES RENDERED, PERHAPS are NOT REGULATED BY ANY ENACTMENT TO SUBSERVE the OBJECT OF BRINGING TO TAX THEIR INCOME.
( 3 ) WHAT FALLS OUT SIDE THE ENUMERATED CLASS,the PRACTICALITY IS THE GUIDING FORCE TO PRESCRIBE a MONETARY LIMIT WHICH WILL COMPEL THEM TO maintain THE ACCOUNTS. IT WOULD BE FUTILE TO CALL upon AN ORDINARY PAN SELLER OR A STREET VENDOR or A ROAD SIDE HAWKER OR CABIN SHOP OWNER OR vegetable VENDOR AND PERSONS LIKE THAT WHO ALSO carry ON PROFESSION TO MAINTAIN BOOKS OF ACCOUNTS. VIEWED IN THAT FASHION WE ARE UNABLE to SEE ANY DISCRIMINATION OR NEED TO ATTRACT THE equality ASSURED UNDER ARTICLE 14 OF THE CONSTITUTION. IT CANNOT BE SAID THAT PROFESSIONS WHICH we HAVE MENTIONED SUCH AS STREET HAWKERS, ORDINARY pan SELLER, ETC. , CANNOT BE SAID TO BELONG to THE SAME CATEGORY OR CLASS OF PERSONS AS ADVOCATES, doctors AND ENGINEERS.
( 4 ) THEREFORE, THERE IS NO VICE OF DISCRIMINATION IF THEY ARE TREATED SEPARATELY AND DISTINCTLY. WITHIN THAT PROFESSION A FURTHER CLASSIFICATION IS made VIZ. , THOSE WHO EARN MORE THAN RS. 25,000/- and THOSE WHO EARN LESS THAN RS. 25,000/ -. THOSE who EARN MORE THAN RS. 25,000/- ARE REQUIRED to MAINTAIN BOOKS OF ACCOUNTS. THEREFORE, WE do NOT SEE UNREASONABLENESS IN SUCH CLASSIFICATION.
( 5 ) HOWEVER, IT IS RIGHTLY POINTED OUT BY MR. S. P. BHAT, LEARNED COUNSEL FOR THE PETITIONER, THAT vice OF DISCRIMINATION IF AT ALL WAS THERE HAS BEEN eliminated SINCE BY INSERTING RULE 6-F IN THE INCOME tax RULES BY WHICH SUCH A FINANCIAL LIMIT has BEEN IMPOSED ON THE PROFESSIONS ENUMERATED in SUB-SECTION (1) OF SECTION 44-AA OF THE ACT as WELL. THEREFORE, THERE IS NO MERIT IN THIS PETITION. IT IS REJECTED. WRIT PETITION REJECTED.
--- *** ---
.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
