National Thermal Power ... vs Union Of India And Others
1991 Latest Caselaw 343 Del

JUDGMENT

B.N. Kirpal, J.

1. The challenge in this writ petition is essentially to the vires of section 115J of the Income-tax Act. Before dealing with the contentions raised, we would like to express our astonishment at the fact that it is a Government corporation which is seeking to challenge the validity of an Act passed at the instance of the Government. Be that as it may, it has been contended that section 115J is violative of articles 14 and 19 of the Constitution. The averments in this regard is extremely vague, to say the least. It has been stated that this section discriminates against limited companies while, in identical circumstances, other assesseds like partnerships and sole proprietorships are lift untouched by section 115J. No particulars have been given with regard to other categories of assesseds which have been left out. In order to make out a case under article 14, names of the other assesseds, their income and other particulars should have been given. Be that as it may, under the Income-tax Act, different types of assesseds are dealt with, under various provisions of the Act, differently. Companies are not similarly situate as partnerships and sole proprietorships, etc., and, therefore, the provision of article 14, in any case, does not come into play in the present circumstances.

2. It was then contended that the petitioner has to maintain its accounts according to the provisions of the Electricity Act and it is not possible for it to comply with the provisions of section 115J. We do not agree with this. Section 115J, as it stood in the year 1987-88, which is the only year applicable to the petitioner, does not make it mandatory for the accounts to be maintained under the provisions of the Companies Act. We see no difficulty in making adjustments in accounts wherever necessary for the purpose of complying with the provisions of section 115J.

3. This provision, namely, section 115J, was brought in the statute book in an effort to tax what is commonly known as "zero tax companies". These are companies which have, in fact, large profits in its books but, for the purpose of the Income-tax Act, by virtue of various deductions which have been claimed, very little taxable income is disclosed. It is an effort to bring such types of companies within the taxable net that section 115J was inserted by Parliament. We are unable to agree with learned counsel for the petitioner that this provision is violative of articles 14 and 19 of the Constitution.

4. With regard to the interpretation of section 115J and the manner of its application to the petitioner, we do not propose to go into this aspect because the petitioner has an alternative remedy open to it by way of an appeal, reference, etc. It is submitted that the Central Board of Direct Taxes has taken a decision and, therefore, the appeal would be futile. This decision has been taken not by the Central Board its own, but because the petitioner had made a representation to the Government against the applicability of section 115J and that representation ultimately went to the Board in its administrative capacity and the Board opined that depreciation has to be worked out in accordance with the provisions of section 115J. This opinion of the Board can, under no circumstances, be binding either on the Commissioner of Income-tax (Appeals) or on the Income-tax Appellate Tribunal, which are two appellate authorities or in any further reference to this court.

5. We find no substance in this petition. The petition is dismissed.