Law:

Section:

Section 140A of the Income-tax Act, 1961 - Self assessment - Whether Section 140A(3) deprives or takes away from owner his retained income and, thus, it is confiscatory in nature - Held, yes - Whether penalty levied under section 140A(3), having no relation to duration of delay or willful or other nature of violation to pay or inability to pay tax, is neither compensatory nor interest for delayed payment of tax or retention - Held, yes - Whether provision for confiscation of property for non-payment of tax arrears could not be sustained as a provision ancilliary or incidental for enforcement of payment and, therefore, a reasonable restriction under Article 19(5) of Constitution of India and even as a punishment for failure to pay tax within time, legislation could not be sustained from attack of article 19(1)(f) - Held, yes - Whether tax payable under section 140A is a civil liability which could not attract any confiscation of property, and any provision enabling confiscation for failure to discharge that liability in time would be unreasonable and infringe Article 19(1)(f) - Held, yes - Whether penalty under section 140A(3) being confiscatory in nature could not be taken out of purview of Article 19(1)(f) by providing procedural safeguards alone - Held, yes - Whether Section 140A(3) authorising levy of penalty for failure to pay within 30 days of tax payable under section 140A(1) is confiscatory and is not saved under article 19(5) of Constitution - Held, yes - Whether Section 140A(3) treats all persons who fail to pay tax as provided under section 140A(1), as a class by itself and makes them liable to pay penalty, and there could be no comparison between that class of persons and Government which can be legitimately treated as a class by itself - Held, yes - Whether power to legislate on penalty for failure to pay tax is comprehended in entry 97 of list 3 and Article 248 and therefore, section 140A(3) is not beyond legislative competence of Parliament - Held, yes Circulars and notification : Circular No. 20 (LXXVI) D of 1964, dated 7-7-1964 issued by CBDT. FACTS For the assessment year 1968-69, the petitioners filed their respective returns declaring total…

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