A KOWSALYA BAI Vs. UNION OF INDIA

JUDGEMENT

(1.) THESE petitions have been filed seeking for a declaration that S.206 AA of the Income Tax Act, 1961 is unconstitutional and for costs.

(2.) IT is stated, petitioners are small investors. For depositing their savings out of their meager income, they approached respondents 3 and 4, for earning better interest/returns. They do not have any source of income other than their investment. It is also stated specifically, they do not have income exceeding the maximum taxable limit as per S.139 A of the Act. Petitioners even filed Form 15 G as required under S.197 A of the Act to enable the 3rd and 4th respondents not to deduct tax at source as per S.193 of the Act.

(3.) THE Parliament also being aware of the plight of such people who are not assessed to income tax but who invest their money for the purpose of survival and eking out their livelihood and that deduction of tax at source on such small investments would cause undue hardship, introduced S.139 A1(i) of the Act in the year 1995 which enables such persons not assessable to income tax to file a declaration to that effect in the prescribed format, by which income tax would be deducted at source. S.206AA which is introduced has come into effect from 1.4.2010 as per Finance Act 2/2009, has a over riding provision to furnish PAN and as a consequence of which, persons who do not have assessable income are now compelled to obtain PAN or otherwise, the tax could be deducted as specified.