ASSAM FRONTIER TEA LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) THE Assam Frontier Tea Ltd. is an incorporated company under the Companies Act, 1956. THE company owns eight tea estates or tea gardens wherein 14,500 workers are employed for growing green tea leaves and for manufacturing black tea. THE company expends Rs. 70 lakhs in welfare activities each year for running schools and hospitals in the estates. THE company, in this regard, on March 28, 1984, deposited Rs. 2 crores with an association called Apeejay Educational Association Limited and another sum of Rs. 2 crores with Apeejay Medical Research and Welfare Association. THE two amounts were deposited to be spent for the benefit of workmen and for other welfare activities in the eight estates.

(2.) THE company, in its income-tax return for the assessment year 1984-85, claimed deduction of Rs. 4 crores in its profit and loss account. THE Income-tax Officer, on March 30, 1987, rejected the claim. THE Commissioner of Income-tax (Appeals), on June 12, 1987, directed the Income-tax Officer to reframe the assessment order. THEreafter, in the assessment order passed on March 30, 1990, the Income-tax Officer held that the amount of Rs. 4 crores cannot be deducted as "section 40A(9) brought in by the Finance Act, 1984, with retrospective effect from April 1, 1980, specifically provides that such contributions are not to be allowed as deductions". THE company perhaps is pursuing its remedy before the appellate authority.

(3.) THE Revenue explained that the three Sub-sections (in Section 40A) were inserted to check evasion of taxes and, therefore, payments made after March 1, 1984, can neither be deducted as expenditure nor recovered as "unspent" amounts. Whether any other date can be substituted in the impugned sub Sections (10) and (11), the Revenue explained that it was for Parliament to decide the feasibility of insertion of a date and it was not for the court to probe or discover justification for substitution of another date or to dislodge the inserted date. THE impugned provisions, it is averred by the Revenue, are enforced against all assessees in the country uniformly and, therefore, the Assam Frontier Tea Company is in no way discriminated against.