NAGAPPA Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THESE 28 writ petitions are filed by the firm of M/s. M. Nagappa, building contractors, and the six partners who constitute the said firm. They relate to the assessment years 1965-66, 1966-67, 19 67-68 and 1968-69. In these petitions, the petitioners have challenged the constitutional validity of section 217 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), under the following circumstances :

(2.) THE firm, M/s. Nagappa and its partners, had not been assessed to income-tax at any time prior to the assessment year 1965-66. THE orders of assessment in respect of the years 1965-66, 1966-67, 1967-68 and 1968-69 were passed by the Income-tax Officer in the year 1969. While passing the said orders of assessment, the Income-tax Officer levied interest at the prevailing rate under section 217(1) of the Act in respect of the advance tax which they had to pay according to the provisions of the Act. Aggrieved by that part of the order of assessment, the petitioners filed petitions before the Commissioner of Income-tax requesting him to exempt payment of the interest levied under section 217(1) in exercise of his power under rule 40 of the Income-tax Rules (hereinafter referred as "the Rules") read with section 264 of the Act. THE Commissioner of Income-tax found that there was no valid reason for exempting the petitioners from payment of interest in question. Accordingly, he rejected the petitions presented by the petitioners. Aggrieved by the orders passed by the Commissioner of Income-tax, the petitioners have filed these petitions.

(3.) THE first contention is formulated as follows :