| Sub section (4) of section 5 of the Taxation on Income (Investigation Commission) Act, 1947, does not deal with the same class of persons as are said to have been grouped together in subsection (1) of section 5 of the Act as persons who to a substantial extent evaded payment of taxation on income. |
| On a plain reading of the section it is clear that sub section (4) of section 5 is not limited only to persons who made extraordinary profits and to all persons who may have evaded payment of taxation on income irrespective of whether the evaded profits are substantial or insubstantial and therefore the scope of sub section (4) of section 5 is different from the scope of sub section (1) of section 5 both in extent and range. |
| Sub section (4) of section 5 of the Act, obviously deals with the same class of persons who fall within the ambit of section 34 of the Indian Income tax Act and are dealt with in sub section (1) of that section and whose income can be caught by the proceeding under that section. |
| It is not possible to hold that all such persons who evaded payment of income tax and do not truly disclose all particulars or material facts necessary for their assessment and against whom a, report is made under sub section (4) of section 5 of the impugned 449 Act by themselves form a class distinct from those who evade payment of income tax and come within the ambit of section 34 of the Indian Income tax Act. |
| Both section 34 of the Indian Income tax Act, 1.922, and subsection (4) of section 5 of the Taxation on Income (Investigation Commission) Act, 1947, deal with all persons who have similar characteristics and similar properties, the common characteristics being that they are persons who have not truly disclosed their income and have evaded payment of taxation on income. |
| The procedure prescribed by the Taxation on Income (Investigation Commission) Act, 1947, is substantially more prejudicial and more drastic to the assessee than the procedure under the Indian Income tax Act (XI of 1922). |
| Held, therefore that sub section (4) of section 5 and the procedure prescribed by the impugned Act in so far as it affects the persons proceeded against under that sub section being a piece of discriminatory legislation offends against the provisions of article 14 of the Constitution and is thus void and unenforceable. |
|
|
