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of <h1>High Court dismisses challenge to Income-tax Act provision; upholds differentiation in treatment of assessees.</h1> <h3>National Thermal Power Corporation Limited Versus Union Of India And Others (and Other Writ Petitions)</h3> The High Court of Delhi dismissed the petition challenging the constitutionality of section 115J of the Income-tax Act. The court held that the ... CBDT, Companies, Special Provision For Taxation Issues involved: Challenge to the vires of section 115J of the Income-tax Act on grounds of violating articles 14 and 19 of the Constitution.Summary:The High Court of Delhi addressed the challenge to the vires of section 115J of the Income-tax Act, which was brought by a Government corporation. The petition contended that section 115J discriminates against limited companies compared to partnerships and sole proprietorships. However, the court noted that different types of assessees are treated differently under the Income-tax Act based on their unique circumstances. The court found that the provision of article 14 does not apply in this case.Regarding the argument that the petitioner must maintain its accounts according to the provisions of the Electricity Act and cannot comply with section 115J, the court disagreed. It clarified that section 115J does not mandate accounts to be maintained under the Companies Act and adjustments can be made as needed to comply with the provision.Section 115J was introduced to tax 'zero tax companies' with substantial profits but minimal taxable income due to deductions claimed. The court rejected the claim that this provision violates constitutional articles 14 and 19.The court declined to delve into the interpretation and application of section 115J to the petitioner, stating that the petitioner has alternative remedies like appeals or references. The decision of the Central Board of Direct Taxes, which opined on the applicability of section 115J to the petitioner, is not binding on appellate authorities or further references to the court.Ultimately, the court found no merit in the petition challenging the vires of section 115J and dismissed the petition.
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