2022 (12) TMI 1097 - HC - Income Tax

Petition for Mandamus to Extend Tax Deductions for Construction Projects Dismissed; Insufficient Pleadings Noted.

The HC dismissed the petition seeking a writ of Mandamus to extend deductions under section 80-IBA of the Income Tax Act, 1961, and the completion period ... Discrimination - reasonable classification - Article 14 - Writ of Mandamus - Article 226 - no mandamus to legislature - legislative power to tax and amend statutes - judicial restraint in taxation - extension of statutory timelinesArticle 14 - discrimination - reasonable classification - extension of statutory timelines - Whether the Petitioner has established discriminatory treatment violative of Article 14 by comparing members eligible under section 80-IBA with persons covered by section 80-IAC and other provisions which received extensions. - HELD THAT: - The Court held that to sustain a claim of discrimination under Article 14 the petitioner must plead and establish specific facts demonstrating that the classes compared are similarly situated and that any differentiation lacks a rational nexus to the object of the statute. Merely asserting parity with beneficiaries of extensions under other provisions (such as section 80-IAC) is insufficient. The petition was found to be deficient in pleadings and material particulars required to demonstrate equivalence between the petitioner's members and those granted extended timelines, and therefore the element of hostile discrimination necessary to invoke Article 14 was not made out. The Court applied established principles that taxing and incentive provisions permit reasonable classification and merit judicial restraint, requiring a clear basis of equivalence before treating groups alike under Article 14. [Paras 6, 11]The claim of discrimination under Article 14 was rejected for lack of adequate pleadings and failure to establish similarity between the classes; the petitioner did not make out a case of unconstitutional discrimination.Writ of Mandamus - Article 226 - no mandamus to legislature - legislative power to tax and amend statutes - Whether the High Court may issue a writ of Mandamus directing the Union of India or the legislature to extend the timelines in section 80-IBA(2)(b). - HELD THAT: - Relying on authoritative precedent, the Court reiterated that the power to legislate, including to grant tax incentives or to alter statutory timelines, is a legislative function and, even where delegated, remains essentially legislative. Courts do not possess the power to command the legislature or an executive exercising delegated legislative functions to enact, amend or extend statutes. Accordingly, the relief sought in the nature of a writ of Mandamus to compel legislation or executive action to extend statutory eligibility timelines is not available under Article 226. The petition sought precisely such a mandate and therefore could not be granted as a judicial remedy. [Paras 10, 12, 13]A writ of Mandamus cannot be issued to direct the legislature or to compel the executive to legislate or make subordinate legislation; the petition seeking such relief was dismissed.Final Conclusion: The petition seeking a writ of Mandamus to direct extension of the timelines in section 80-IBA was dismissed: the petitioner failed to establish discriminatory treatment under Article 14 and the Court declined to direct legislative or executive action, holding that mandamus cannot be used to compel legislation or extension of statutory timelines. Issues:1. Extension of date for availing deductions under section 80-IBA of the Income Tax Act, 19612. Extension of time period for completion of construction projects under section 90-IBA(2) (b) of the Act3. Allegation of discrimination against Real Estate Developers4. Fundamental rights violation under Article 14 of the Constitution of India5. Jurisdiction of the Court to issue a writ of MandamusExtension of Deductions and Completion Time:The petitioner sought a writ of Mandamus to extend the date for availing deductions under section 80-IBA of the Income Tax Act, 1961, and to extend the time period for completion of construction projects from five years to seven years under section 90-IBA(2) (b) of the Act. The petitioner argued that the Union of India had extended similar timelines in other provisions but failed to do so in the case of section 80-IBA, leading to discrimination against Real Estate Developers.Allegation of Discrimination:The petitioner claimed that the failure to extend timelines under section 80-IBA beyond 31.03.2022, while granting extensions in other provisions, amounted to discrimination. The petitioner argued that this discriminatory treatment violated the fundamental rights of its members, particularly those enshrined in Article 14 of the Constitution of India. The petitioner highlighted the impact of the Covid-19 Pandemic on the real estate industry and cited advisories issued by regulatory authorities for deadline extensions due to force majeure conditions.Legal Analysis and Jurisdiction of the Court:The court analyzed the petitioner's claim of discrimination and the requirement to demonstrate that its members and those covered under section 80-IAC of the Act were similarly situated. The court referred to relevant judgments emphasizing the need for specific, clear, and unambiguous allegations to prove discrimination under Article 14. Additionally, the court discussed the powers of the courts to issue a writ of Mandamus to direct a legislature to enact a particular law, highlighting that no court can compel the legislature to legislate in a specific manner.Court Decision and Conclusion:Based on the analysis, the court found the petition lacking in sufficient pleadings to establish discrimination as claimed by the petitioner. The court concluded that it would not exercise its jurisdiction under Article 226 of the Constitution of India to issue a writ of Mandamus to the Respondent or the legislature for the reliefs sought by the petitioner. Therefore, the court dismissed the petition, stating that no writ of Mandamus would lie to direct the legislature, and no costs were awarded in the matter.This comprehensive summary provides a detailed analysis of the judgment, covering all the issues involved and the court's decision on each aspect of the case.