(1.) THE principal point that arises for consideration in this writ petition is whether Sub-rule (3) of Rule 19A of the I.T. Rules, 1962, was ultra vires the provisions of Section 80J of the I.T. Act, 1961 ?
(2.) THE petitioner is a partnership firm. It carries on business of manufacture of card board boxes. For the assessment year 1974-75, it claimed relief under Section 80J to the extent of deduction of 6 per cent. on the total capital employed by it including the borrowed1 capital. On this ground, the petitioner firm claimed a relief of Rs. 94,254 on the basis of the total capital either invested by the partners or borrowed by the firm, as on 3rd November, 1972, which was the opening day of the relevant accounting period.
(3.) THE ITO went up in appeal to the Tribunal and succeeded. THE Tribunal repelled the submission that Sub-rule (3) of Rule 19A of the Rules was in conflict with any provisions of Section 80J. Under the aforesaid rule the borrowed capital has to be excluded. It accordingly, restored the or'der of the ITO. Feeling aggrieved the petitioner has come to this court because it being settled law that the vires of any provisions of the statute could not be challenged before any of the authorities created by that statute. [See K.S. Venkataraman and Co. (P.) Ltd. v. State of Madras [1966] 60 ITR 112 (SC) and Beharilal Shyamsunder v. STO [1966] 60 ITR 260 (SC) ].