Sterling Computers Ltd. vs Union of India (UOI) and Another

R. Jayasimha Babu, J.—The petitioner challenges the provision providing for levy of additional tax u/s 143(1A) of the Income Tax Act,

1961, introduced by the Direct Tax Laws (Amendment) Act, 1989, on the ground that the same is discriminatory and unconstitutional. This

provision is one made for the levy of additional Income Tax in the circumstances referred to in that provision, viz., where the income shown by any

person in the return is increased or the loss declared in the return is reduced or is converted into income. The said section is intended to encourage

assessees to be honest, while filing the returns and also to discourage assessees from adjusting the figures by treating amounts as income not

received or by treating them as a loss or as an item of expenditure. If after the provisions are properly applied to the return submitted by the

assessees, the adjustments are found to be warranted, then the provisions providing for the levy of additional Income Tax on the amounts so

adjusted will operate. There can, therefore, be no doubt as to the section being a salutary one in the public interest and the interest of citizens of the

country who are to pay the tax levied under the Act with honesty and without withholding the amounts properly due to the State. This provision

does not in any manner violate article 14 of the Constitution of India, as there is no discrimination among the assessees. A person who is dishonest

and does not declare his income correctly cannot be put in the same class as that of the other assessees, who truthfully declare their income and

items of expenditure and who do not conceal or withhold the income received by them. The additional Income Tax leviable on persons whose

returns do not state the figures accurately under the relevant heads is in no way discriminatory or unjust and the levy of such additional tax does not

amount to deprivation of property without any authority of law nor is the imposition of such additional tax beyond the power of Parliament.

There is no merit in the challenge made to this provision.

A similar view has been taken by another learned, single judge in the case of Kerala State Coir Corporation Ltd. Vs. Union of India (UOI) and

Others, . The writ petition and the connected miscellaneous petition are dismissed. No costs.