UNION OF INDIA Vs. A SANYASI RAO

JUDGEMENT

(1.) IN this batch of cases - writ petitions filed under Article 32 of the Constitution of INdia and civil appeals and special leave petitions filed under Article 136 of the Constitution of INdia - substantially similar questions arise for consideration. The matter arise under the INcometax Act, 1961. The validity of Sections 44AC and 206C of the INcome-tax Act, 1961 (hereinafter referred to as 'the Act') is posed for consideration. Various assessees challenged the aforesaid provisions as ultra vires and beyond legislative competence and also violative of Articles 14 and 19(1) (g) of the Constitution of INdia in a few High Courts. Substantially, the challenge was not accepted by all the High Courts. A few High Courts have read down the provisions of Section 44AC of the Act. Dissatisfied by the same, the assessee have come up in appeal. Feeling aggrieved by the reading down of Section 44AC of the Act, the Union of INdia has come up in appeals. Those are covered by civil appeals. Certain other assessees have challenged the aforesaid provisions directly under Article 32 of the Constitution of INdia. Those are covered by writ petitions. A few assessees, feeling aggrieved by the decisions of the High Courts, have filed special leave petitions seeking leave of this Court to file appeals. Since all these three classes of cases involved consideration of the validity or otherwise of Sections 44AC and 206C of the Act, they were heard together.

(2.) SECTION 44AC of the Act was inserted by the Direct Tax Laws (Amendment) Act, 1989 with effect from 1-4-1989. SECTION 206C of the Act was inserted by the Finance Act, 1988 with effect from 1-6-1988. The above sections are re-produced herein below :-

(3.) CIRCULAR No. 525 dated 24-11-1958 and CIRCULAR No. 528 dated 16-12-1988, issued by C. B. D. T., have explained the scope and ambit of Section 44AC and Section 206C of the Act.