Writ jurisdiction and surtax computation: Chapter VI-A deductions are not income excluded from total income under rule 4.

Alternative statutory remedies do not automatically bar writ jurisdiction under article 226; maintainability depends on the circumstances, and a preliminary objection on that ground was rejected here. On surtax computation, amounts deducted under sections 80-I and 80J of the Income-tax Act were held not to be income "not includible in total income" for rule 4 of the Second Schedule to the Companies (Profits) Surtax Act, 1964. That expression was confined to incomes excluded under Chapter III, not deductions allowed from gross total income under Chapter VI-A. The statutory scheme and prescribed form supported this construction, rendering the notices under the surtax provisions unsustainable.

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Issues: (i) Whether the writ petitions were maintainable despite the availability of alternative statutory remedies. (ii) Whether deductions allowed under sections 80-I and 80J of the Income-tax Act could be treated as income not includible in total income for the purpose of rule 4 of the Second Schedule to the Companies (Profits) Surtax Act, 1964.

Issue (i): Whether the writ petitions were maintainable despite the availability of alternative statutory remedies.

Analysis: The existence of an alternative remedy does not by itself bar jurisdiction under article 226 of the Constitution of India. The decision whether to exercise writ jurisdiction depends on the circumstances of the case. Since the department's stand was contrary to law and the Commissioner had already taken an adverse view in a similar matter, the objection based on alternative remedy was not accepted.

Conclusion: The preliminary objection to maintainability was rejected, and the writ petitions were held maintainable.

Issue (ii): Whether deductions allowed under sections 80-I and 80J of the Income-tax Act could be treated as income not includible in total income for the purpose of rule 4 of the Second Schedule to the Companies (Profits) Surtax Act, 1964.

Analysis: Rule 4 applies only where a part of a company's income is not includible in its total income as computed under the Income-tax Act. The expression was construed as referring to incomes excluded from total income under Chapter III, such as those covered by sections 10 and 11, and not to deductions allowed after computation of gross total income under Chapter VI-A. Deductions under sections 80-I and 80J are allowed from gross total income and do not convert the deducted amounts into income not includible in total income. The statutory scheme and the form prescribed under the surtax rules also supported this interpretation.

Conclusion: Deductions under sections 80-I and 80J could not be brought within rule 4, and the notices issued under sections 8 and 16 were unsustainable.

Final Conclusion: The notices founded on the reassessment and revisionary premise were quashed, and the petitioners obtained complete relief.

Ratio Decidendi: Amounts allowed as deductions under Chapter VI-A of the Income-tax Act are not amounts not includible in total income for the purpose of rule 4 of the Second Schedule to the Companies (Profits) Surtax Act, 1964; that expression is confined to incomes excluded from total income under Chapter III.

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