2001 TAX. L. R. 500 ::(2000) 163 CurTaxRep 565 ::(2001) 247 ITR 22 ::(2000) 113 Taxman 514 ::(2001) 162 Taxation 152

Kerala High Court

Hon'ble Judge(s): J. B. Keshy, M. Ramachandran , JJ

Book profit , — Levy of minimum tax on such profits of Companies - Provision not unconstitutional and violative of Arts. 14 and 19 of Constitution - Consequential levy of additional tax under S. 143 (1-A) and interest under S. 234-B is also not illegal. Income-tax (43 of 1961) , Ss.115-J, 143(1-A), 234-B— Section 115-J of Income-tax Act (1961) which is a special provision relating to certain companies for taxation of companies whose total income is computed less then 30% of their book profits, is not violative of Art. 19 of Constitution of India, on the ground that the above provision i.e., S. 115-J seeks to tax hypothetical income not accrued to the assessee. Various concessions and allowances are given as per various provisions enabling the companies to arrange their tax affairs in such a way as to become 'Zero tax' companies and legislature by this section restricted or curtaied or limited such concessions to the extent as provided in S. 115-J so that they can pay some tax. This is not unreasonable so as to make it violative of Art. 19 or Art. 14 of Constitution of India, on the ground that similar provision is not applicable to partnerships. What is done by the legislature is to limit the allowances and nothing else. The very object of the provisions of S. 115-J is to tax such companies which are making huge profits and also declaring subs....