B NOORSINGH Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioner has challenged the constitutional validity of Section 158BB(1)(c) of the Income-lax Act, 1961. That provision occurs in Chapter XIV-B which lays down a special procedure for assessment of search cases under Section 158BB. Section 158B(a) defines a block period with reference to the previous years relevant to ten assessment years preceding the previous year in which the search was conducted under Section 132 of the Act or any requisition was made under Section 132A of the Act and includes in the previous year in which such search was conducted or requisition made the period up to the date of the commencement of such search or, as the case may be the date of such requisition. Undisclosed income is defined in Section 158B(b) inter alia, to be the income which has not been or would not have been disclosed for the purposes of the Act.

(2.) SECTION 158BA provides that the special procedure set out in Chapter XIV-B shall be adopted in search cases covered by the provision "notwithstanding anything contained in any other provisions of this Act." The Explanation to that provision states that the assessment made under this Chapter will be in addition to the regular assessment in respect of each previous year included in the block, period : that the total income undisclosed relating to the block period shall not include the income assessed in any regular assessment as the income of such block period : and that the income assessed under that Chapter shall not be included in the regular assessment of any previous year included in the block period.

(3.) THE provision with which we are concerned is a provision in a taxing statute. It is open to Parliament to classify the taxpayers on any rational basis ; also treat the different classes of taxpayers differently. It is also permissible for Parliament to classify in a rational and non-arbitrary manner, the assessees further in relation to their conduct. Parliament can legislate with respect to the assessees who comply with the requirements of law and extend such concessions as it deems fit to such assessees, which concessions it may choose to deny to those who have violated the law and such violations have been established by reason of the action taken by the authorities. It is in that background and with the object of laying down a special procedure for the assessment of the assessees who fail to comply with the law by not disclosing in full their taxable income and by not paying the taxes properly due from them that Chapter XIV-B consisting of sections 158B & 158BH was inserted in the Income-tax Act by the Finance Act, 1995, with effect from July 1, 1995.