RAKESH KUMAR AND CO. Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS petition seeks quashing of notice dated 17 -10 -2008 (Annexure P -1) requiring the petitioner to show cause why disallowance of expenses be not made under Section 40(a)(ia) under Income Tax Act, 1961 ('the Act') for its having deducted the TDS but failing to deposit the same as required under Section 200(1) of the Act.

(2.) APART from challenging the impugned notice, the petitioner has also prayed that provisions of Section 40(a)(ia) of the Act be declared ultra vires, on the ground that the same are harsh and discriminatory.

(3.) CONTENTION raised is that default in making deposit of TDS was not deliberate and, therefore, disproportionate punishment of disallowing the whole expenditure was discriminatory and violated article 14 of the Constitution of India. Reliance has also been placed on an order passed by Single Bench of Madras High Court in Southern Agro Engine (P.) Ltd. v. Union of India, [2008] 4 DTR (Mad.) 253, issuing notice on a petition raising the question of constitutionality of Section 40(a)(ia) of the Act, and staying penal action till the filing of the counter affidavit.