Madras High Court
Southern Agro Engine (P) Ltd. vs Union Of India (Uoi) And Anr. on 26 October, 2007
Equivalent citations: (2008)215CTR(MAD)470
Author: S. Manikumar
Bench: S. Manikumar
ORDER S. Manikumar, J.
1. The petitioner, has challenged the constitutionality of Clause (ia) of Section 40(a) of IT Act introduced by the Finance (No. 2) Act of 2004 w.e.f. 1st April, 2005 as ultra vires and striking down the same insofar as it provides that the expenses in respect of which tax is not deducted at source or paid over to the Government within the time provided under Section 200 shall not be deductible in computing the income.
2. Pending writ petition, the petitioner has sought for stay the operation of Clause (ia) of Section 40(a) of IT Act and also for a direction to the second respondent to accept the petitioner's return for the asst. yr. 2007-08 which is due on or before 31st Oct., 2007, declaring the income of the petitioner without the application of Clause (ia) of Section 40(a) of the IT Act introduced by the Finance Act (No. 2) of 2004.
Mrs. Pushya Sitaraman learned senior standing counsel for income-tax takes notice for the respondents and submitted that the amended provision has come into effect from 1st April, 2005 and that should not be stayed at this length of time.
3. It is settled law that presumption is in favour of the statute and therefore, I am not inclined to grant stay of the amended provision. But considering the submissions advanced by the learned Counsel for both sides following order is passed:
The petitioners are directed to submit the self-assessment returns by including the amount for which tax is deducted at source. The respondents are directed to accept the returns to be submitted by the petitioners/assessees for the year 2007-08. The petitioners shall pay tax on the self-assessment income and the Department is restrained from taking any penal action till the filing of the counter affidavit.
The filing of the returns and payment of tax on the basis of such returns shall be purely provisional and subject to the liability of the petitioners filing the modified returns and pay such tax as may be due in the event the petitioners failing in this proceeding.
Learned Counsel for the .petitioner on record is directed to take private notice on the respondents.