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JUDGMENT Satish Chandra, CJ.- The principal point that arises for consideration in this writ petition is whether sub-r. (3) of r. 19A of the I.T. Rules, 1962, was ultra vires the provisions of s. 80J of the I.T. Act, 1961? The petitioner is a partnership firm. It carries on business of manufacture of card board boxes. For the assessment year 1974-75, it claimed relief under s. 80J to the extent of deduction of 6 per cent on the total capital employed by it including the borrowed capital. On this ground, the petitioner firm claimed a relief of Rs. 94,254 on the basis of the total capital either invested by the partners or borrowed by the firm, as on 3rd November, 1972, which was the opening day of the relevant accounting period. The ITO relying upon sub-r. (3) of r. 19A held that the assessee was not entitled to the relief in respect of borrowed capital. He, therefore, allowed the relief to the extent of Rs. 35,798. The assessee went up in appeal. The AAC held that the term, "capital employed" in s. 80J covered the entire capital invested by the assesseewhich included borrowed capital also. He, therefore, allowed relief to the extent of Rs. 94,254 as claimed by the assessee. The ITO went up in appeal to the Tribunal and succeeded. The Trib unal repelled the submission that sub-r. (3) of r. 19A of the Rules was in conflict with any provisions of s. 80J. Under the aforesaid rule the borrowed capital has to be excluded. It accordingly, restored the order of the ITO. Feeling aggrieved the petitioner has come to this court because it being settled law that the vires of any provisions of the statute could not be challenged before any of the authorities created by that statute. [See K.S. Venkataraman and Co. (P.) Ltd. v. State of Madras[1966] 60 ITR 112 (SC) and Beharilal Shyamsunde r v. STO 1966] 60 ITR 260 (SC) ]. Sri Raja Ram Agarwal, the learned counsel for the petitioner, urged that s. 80J allows relief to the newly established undertakings mentioned in it, at the rate of 6 per cent of the capital employed in the industrial undertaking. It does not stand to reason that the provision like s. 80J( which was specifically meant for the newly established undertakings,…

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