| Case ID |
0aa25246-c80d-4fc5-bb02-2a231463a216 |
| Body |
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| Case Number |
D-2741 of 2016 |
| Decision Date |
Jan 01, 1987 |
| Hearing Date |
Jan 01, 1987 |
| Decision |
The Rajasthan High Court upheld the constitutional validity of section 44AB of the Income-tax Act, 1961, stating that the provisions were enacted to check tax evasion. It ruled that the classification based on income thresholds of Rs. 40 lakhs for businesses and Rs. 10 lakhs for professionals was reasonable and did not violate the right to equality under Article 14 of the Constitution. The court further determined that the requirement for audits by chartered accountants was not discriminatory, as they possess the expertise necessary for such tasks. The decision emphasized the legislative competence to set such provisions for effective tax administration and to prevent evasion. |
| Summary |
This case revolves around the constitutional validity of section 44AB of the Income-tax Act, 1961, which mandates auditing of accounts for certain categories of taxpayers based on their gross receipts. The petitioner, Abhay KuMar court & Co., challenged the section on grounds of discrimination and arbitrariness. The Rajasthan High Court affirmed the law's constitutionality, arguing that it is a legitimate measure to combat tax evasion. The court held that the thresholds set for mandatory audits were rational and that the expertise of chartered accountants justified their exclusive role in conducting audits. This ruling reinforces the principles of reasonable classification and legislative discretion in tax law, ensuring compliance and enhancing the integrity of the tax system. Keywords include 'Income-tax Act', 'audit requirements', 'tax evasion', 'constitutional validity', and 'chartered accountants'. |
| Court |
Rajasthan High Court
|
| Entities Involved |
Union of India,
Rajasthan High Court
|
| Judges |
A. K. Mathur, J.
|
| Lawyers |
Vineet Kothari,
R. Krishna Murthy,
B.R. Arora
|
| Petitioners |
Abhay KuMar court & Co.
|
| Respondents |
Union of India
|
| Citations |
1987 SLD 2893,
(1987) 164 ITR 148
|
| Other Citations |
R. Abdul Quader & Co. v. STO [1964] 15 STC 403 (SC),
C.A. Akhtar & Co. v. State of Tamil Nadu [1981] 47 STC 62 (Mad.),
Air India v. Kergesh Meerza AIR 1981 SC 1829,
R.B. Basu v. P.K. Mukherji AIR 1957 Cal. 449,
Bhopal Sugar Industries Ltd. v. D.P. Dube, STO [1963] 14 STC 406 (SC),
CIT v. Tollygunge Club Ltd. [1977] 107 ITR 776 (SC),
Government of Madras v. Veerabadrappa AIR 1950 Mad. 521,
Hafiz Din Mohammad Haji Abdulla v. State of Maharashtra [1962] 13 STC 292 (SC),
Hoechast Pharmaceuticals Ltd. v. State of Bihar [1985] 154 ITR 64 (SC),
ITO v. Lawrence Singh Ingty [1968] 68 ITR 272 (SC),
Kandula Radhakrishna Rao v. Province of Madras AIR 1952 Mad. 718 (FB),
Mohan Trading Co. v. Union of India [1985] 156 ITR 134 (MP),
Mudiam Oil Co. v. ITO [1973] 92 ITR 519 (AP),
Murthy Match v. Assistant Collector of Central Excise AIR 1974 SC 497,
T.S. Nataraj v. Union of India [1985] 155 ITR 81 (Kar.),
New Manek Chowk Spg. & Wvg. Mills Co. Ltd. v. Municipal Corporation of the City of Ahmedabad AIR 1967 SC 1801,
New Nagpur Copra Industries v. State of Maharashtra [1985] 60 STC 380 (Bom.),
Public Prosecutor v. Narasimha Reddy AIR 1948 Mad. 102,
Ram Krishna Dalmia v. Justice S.R. Tendolkar [1958] AIR 1958 SC 538,
Satish Majumdar v. State of Tamil Nadu AIR 1979 Mad. 246,
State of Kerala v. Haji K. Haji Kutty Naha AIR 1969 SC 378,
Vallabhdas Manjibhai Dholakia v. CIT [1975] 98 ITR 403 (Guj.),
T. Venkata Reddy v. State of Andhra Pradesh [1985] 98 ITR 1985 SC 724
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
44AB,
142,
271B,
139(2)
|