INCOME TAX OFFICER Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioners question the legislative competence of Parliament to levy capital gains tax on transfer of agricultural lands situated within the limits of the municipalities (with a population of more than 10,000) and within a radius of 8 kilometres thereof. Article 14 of the Constitution is also brought in to impugn the validity of the levy. For the sake of convenience, we shall refer to the facts in W. P. No. 2592 of 1981.

(2.) The petitioner owns agricultural lands within a radius of 8 kms. of Nellore Municipal limits. He sold 5 acres out of it in July, 1976, for a consideration of Rs. 45,000. He did not submit a return showing any income on that account. Even otherwise, he is not an income-tax assessee. The Income-tax Officer, D-Ward, Nellore, issued a notice under section 139(2) of the Act, in response to which the petitioner filed a return declaring an income of Rs. 5,630 as capital gain arising out of the said transaction and Rs. 2,500 as agricultural income. The Income-tax Officer, by his order dated 30/01/1980, determined the capital gain in the hands of the petitioner at Rs. 26,630 and levied a tax of Rs. 5,746. According to the petitioner, the land sold was always put to agricultural use and paddy was grown at the time of sale.

(3.) In the counter-affidavit filed by the respondents, the facts stated above are not denied. It is, however, submitted that the petitioner ought to have filed an appeal against the order of assessment order suffers from laches.