HARI KRISHNA BHARGAV Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner who is a trader at Meerut was ordered by the Income-tax Officer, D-Ward, Meerut, to pay Rupees 1,800/- as annuity deposit under Ch XXII-A of the Income-tax Act, 1961. The petitioner has filed this petition challenging the validity of the demand on the plea that Ch. XXII-A of the Income-tax Act is unconstitutional and is otherwise violative of the fundamental right guaranteed by Art. 14 of the Constitution.

(2.) The Indian Income-tax Act, 43 of 1961, was enacted by the Parliament to consolidate and amend the law relating to income-tax and super-tax. The Act came into force on April 1, 1962. The Parliament enacted Finance Act, 5 of 1964, to give effect to the financial proposals of the Central Government for the financial year 1964-65, and by S. 3 (1) of that Act it was provided:

(3.) Broadly stated, the scheme of Ch. XXII-A is that certain classes of taxpayers in the comparatively higher income groups are required to make out of their total income deposits at the specified rates on the adjusted total income, with the Central Government. The amount so deposited in made returnable with interest in ten annual instalments. In computing the total income of the year in which it is made the deposit is an admissible deduction. But the instalment due in any year is liable to be adjusted in the total income of the year in which it is due. The taxpayer however has the option not to pay the deposit, and pay tax on his total income and fitty per cent of the amount saved by not making the deposit.