Delhi HC dismisses
assessee’s (100% EOU) writ for AY 2007-08, upholds constitutional validity of
Sec. 80A(5) as well as fourth proviso to Sec. 10B(1) (the sections mandate
filing of return of income within prescribed due-date u/s 139(1) in order to
claim tax holiday u/s. 10A/10B); Assessee submitted that the provisions
discriminate between two sets of assessees – one, who file return u/s. 139(1)
but claim the deduction subsequently by way of revised return u/s. 139(5), and
another set of taxpayers, who could not file return within due date but claim
the deduction in the original return filed belatedly u/s. 139(4) and therefore
violative of Article 14 of the Constitution; HC observes that the provisions
did not curtail any vested rights of taxpayer but it only imposed an obligation
to claim deductions in a timely manner and in the return so filed; HC also
refers to SC ruling in Nallamilli Ramli Reddi to hold that Article 14 permits
reasonable classification if it is based on intelligible differentia and it has
reasonable connection with the object sought to be achieved; Noting that the
objective behind insertion of the two provisions was to defeat multiple claims
of deductions and to ensure better tax compliance, HC rules that “it is open to
legislate and prescribe different conditions in respect of those who claim
benefits, just as the substantive provisions which stipulate the conditions
(kind of accounts to be maintained, eligibility criteria, etc.).”; Also relies
on SC rulings in Kedarnath Jute Manufacturing Co. Ltd. and Sanjay Kumar Jain to
uphold the validity of fourth proviso, being merely a qualifying proviso, which
seeks to limit the general provision in Sec. 10B(1) with a further stipulation
or condition:HC
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