Law: Income Tax Act, 1961

Section: 244A

(a) Income-tax---Deduction of tax at source---Refund---Interest---Constitutional validity of provisions---Section 244A is valid---Income Tax Act, 1961, S.244A--¬Constitution of India, Art. 14. The Income Tax Act, 1961, is a fiscal legislation the same is also subject to Article 14. But in respect of taxation laws the power of the Legislature to classify goods, things or persons is necessarily wide and flexible so as to enable it .to adjust the system of taxation in all proper and reasonable ways. In fiscal legislation, the rate of tax varies from year to year. Exemptions, which were not there are introduced and exemptions, which were there are deleted. When new exemptions and new concessions are granted by the Finance Act, similarly situated persons are bound to face a differential treatment inasmuch as for pending assessments for earlier years one is not entitled to get such concessions and deductions, but in later years they are entitled. This sort of treatment is a peculiar feature under the Income-tax Act and this is dependent on the economic wisdom which is within the exclusive province of the Legislature. Section 244A does not offend Article 14 of the Constitution. It is valid. (b) Income-tax--- ----Deduction of tax at source---Refund---Interest---Law applicable--¬Section 244A providing for payment of interest on excess tax deducted at source---Right to interest is a substantive right---Section 244A is not procedural---Section 244A is applicable from assessment year 1989r90---Section 244A is not applicable to pending assessments; Indian Income Tax Act, 1961, Ss.214 & 244A---[Central Concrete and Allied Products Ltd. v. Deputy CIT (1994) 210 ITR 506 reversed]. Section 244A has specifically been made effective from the assessment year 1989-90. It is only from the assessment year 1989-90, that the right to get interest on the tax deducted at source, if it is refunded or refundable was recognised. The right to receive interest is a substantive right: Section 244A is not procedural and is not applicable to pending cases. Central Concrete and Allied Products Ltd. v. Deputy CIT (1994) 210 ITR 506 reversed. Cape Brandy Synidicate v. I RC (1921) 1 KB 64; Malwa…

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