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Section 40A(9), (10) and (11) of the Income-tax Act, 1961 - Business disallowance - Contribution to fund/trusts, etc. - Assessment year 1985-86 - Whether sub-sections (9), (10) and (11) of section 40A are violative of article 14 of Constitution - Held, no FACTS The assessee-company owned eight tea estates for growing green tea leaves and for manufacturing black tea. The company spent Rs. 70 lakhs on welfare activities each year for running schools and hospitals in the estates. In this regard, on 28-3-1984 the company deposited Rs. 2 crores with an association called Apeejay Educational Association Ltd. and another sum of Rs. 2 crores with Apeejay Medical Research and Welfare Association. The two amounts were deposited to be spent for the benefit of workers and for other welfare activities in eight estates. The assessee claimed deduction of Rs. 4 crores for the assessment year 1985-86. The ITO held that the amount of Rs. 4 crores could not be deducted as section 40A(9) brought in by the Finance Act, 1984 with retrospective effect from 1-4-1980 specifically provided that such contributions are not to be allowed as deductions. On writ, the assessee contended that sub-sections (9), (10) and (11) of section 40A are ultra vires articles 14,265 and 300A of the Constitution on the ground that these are discriminatory. It was contended (i) that the assessee who had paid like amounts before 1-3-1984 were allowed to have said amounts deducted or recovered under the above sub-sections and for no ostensible reason payments made after that date were not allowed to be deducted, and (ii) that, alternatively, the date of 28-2-1984 contained in sub-sections (10) and (11) of section 40A be altered to 31-3-1984 to wipe out the discrimination and for doing justice to the petitioner-company. HELD From the facts it was not possible to hold that the petitioner had succeeded in establishing any violation of article 14 of the Constitution. All assessees who paid contribution before 1-3-1984 were allowed to recover unspent monies. The instant company did not fall in that group of assessees as the amounts were paid on 28-3-1984. The Finance Minister in the Parliament on 28-2-1983 stated…

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