IN HIGH COURT OF JUDICATURE AT MADRAS DATED: 10.11.2014 CORAM HONOURABLE MR.JUSTICE T.S.SIVAGNANAM W.P.No.10036 of 2010 and M.P.No.1 of 2010 Chennai, Kancheepuram, Thiruvallur Lorry, Tanker, Tipper, Trailer, Van Owners' Association Welfare Committee by President, No.5, Second Main Road, Shenoy Nagar West, Chennai 600 030. Petitioner Vs. 1.Union of Bank by its Secretary, Ministry of Finance, North Block, New Delhi 110 001. 2.The Chairman Central Board of Direct Taxes, North Block, New Delhi 110 001.Respondents Writ Petition filed under Article 226 of Constitution of India for issuance of writ of declaration to declare Section 206 AA of Income Tax Act introduced by Finance Act 02/2009 to be effective from 01.04.2010 as ultra vires Article 14 of Constitution of India. For Petitioner : M/s.T.Uma Sivan For Respondents: Mr.S.Rajasekar for Mr.T.Pramod Kumar Chopra 2 for R1 & R2. ORDER petitioner is Association said to be consisting of members who are owners of Lorry, Tanker, Tipper, Trailer, Van of Chennai, Kancheepuram and Thiruvallur District. 2.The prayer sought for in this writ petition is for issuance of writ of declaration to declare Section 206 AA of Income Tax Act introduced by Finance Act 02/2009 to be effective from 01.04.2010 as ultra vires Article 14 of Constitution of India. 3. petitioner filed writ petition taking inspiration from writ petitions which were filed by others in WP Nos.3048, 3049, 7449 and 7450 of 2010. In those four writ petitions, first two writ petitioners were depositors in finance company and remaining two petitioners were finance company themselves. 4. Initially, when writ petition came up for hearing before this Court, direction has been given to Registry to post matter alongwith pending writ petitions. However, it is brought to notice of this Court that said Writ Petition Nos.3048, 3049, 7449 and 7450 of 2010 have been disposed of by this Court by order dated 10.12.2011. operative portion of order reads as follows - 3 W.P.Nos.3048 and 3049 of 2010 are filed for Writ of Declaration to declare Section 260AA of Income Tax Act, introduced by Finance Act 2 of 2009, effective from 1.4.2010, as ultra vires Article 14 of Constitution of India. 2.The petitioners in W.P.Nos.3048 and 3049 of 2010 are house wife and debenture holders of third and fourth respondents. Considering fact that petitioners do not have any taxable income, they had not gone for any permanent account number (PAN) under Section 139 of Income Tax Act. As per Section 197(a)(1)(a) of Income Tax Act, for non-deduction of tax, petitioners have to file Form 15G. petitioners received letter from third and fourth respondents on 01.12.2009 informing petitioners to apply for PAN Number in case petitioners did not have PAN number and if petitioners had PAN number, they were asked to provide same and pointed out to provisions under Section 260AA of Income Tax Act, introduced with effect from 01.04.2010, question of non-deduction of tax at source would arise only if and when declaration in Form 15G/H carried PAN number. In circumstances, petitioners were directed to mention details of their investment and forward copy of PAN number. Aggrieved by this, petitioners have come before this Court challenging provisions under Section 260AA of Income Tax Act in W.P.Nos.3048 and 3049 of 2010. 4 3. At time of hearing before this Court, after hearing petitioners in W.P.Nos.7449 and 7450 of 2010, who happens to be third and fourth respondents in W.P.Nos.3048 and 3049 of 2010, this Court directed petitioner in W.P.Nos.3048 and 3049 of 2010 to apply for PAN card and directed concerned jurisdictional office at Chennai to issue PAN card. It is stated that in respect of W.P.No.3049 of 2010, where similar prayer is made, petitioner had already obtained PAN card and in respect of W.P.No.3048 of 2010 too, PAN number had already been obtained. In circumstances, strictly speaking, nothing survives in W.P.Nos.3048 and 3049 of 2010, for petitioners to canvass their contentions. Thus learned standing counsel appearing for second respondent also pointed out that petitioners in respective Writ Petitions have already obtained PAN card, as such, their grievance does not survive in any manner. 4. As far as W.P.Nos.7449 and 7450 of 2010 are concerned, learned counsel appearing for petitioner fairly submitted that although petitioners are challenging provisions as violative of Article 14 of Constitution of India, strictly speaking, with PAN card given, they do not have much grievance at all as against said provision. He pointed out that only grievance is that any delay in furnishing said PAN number should not be viewed against petitioners to its detriment in matter of assessment proceedings, since failure to deduct tax carries consequence in assessment 5 proceedings under Section 40(a)(i)(a) of Income Tax Act as well as charging interest on petitioner. 5. Taking note of submissions made by learned counsel appearing for petitioners in W.P.Nos.7449 and 7450 of 2010 and considering fact that in course of hearing and pending Writ Petitions, petitioners in W.P.Nos.3048 and 3049 of 2010 had already obtained PAN number and that assessment in respect of petitioners in W.P.Nos.7449 and 7450 of 2010 are yet to be completed, in fairness to claim of petitioners, this Court directs concerned Assessing Authority to take note of PAN number given by concerned depositors and grant relief to petitioner in W.P.Nos.7449 and 7450 of 2010. 6. As regards claim of petitioners in W.P.Nos.7449 and 7450 of 2010, it is seen from memo filed before this Court in W.P.Nos.7449 and 7450 of 2010 that number of depositors without PAN number, but without any liability for TDS on account of Form 15G/H furnished is given as follows: No. of cases April October March September 30th without PAN 2010 2010 2011 2011 Novembe No liability r 2011 of TDS because of declaration in 15G/H 599754 383146 306345 258676 243047 6 7. petitioner had also informed investors as early as 1st December 2009 about need for furnishing PAN details. It is also matter of relevance herein that during pendency of Writ Petitions, in M.P.No.1 of 2010 in above-said Writ Petitions, this Court considered case of petitioners for interim direction that respondent shall not insist upon petitioners to quote PAN number in Form 15G/H and get tax deduced at source on interest paid by petitioners, but subject to condition that petitioners obtained Form 15G/H from depositors, with declaration as to their status as non-assessee. Learned counsel appearing for petitioners submits that pursuant to said orders, interest payable to these non-assessees had also been released. In circumstances, if at this stage petitioners are to suffer on account of non-compliance of Section 260AA of Income Tax Act, they would be charged with penal provisions under Section 40(a)(i)(a) of Income Tax Act, apart from interest leviable thereon under Section 201(1) of Income Tax Act. In circumstances, learned counsel appearing for petitioner seeks protection from this Court from said provision. 8.Taking note of above-said circumstances and validity of provisions of Act thus not in question, this Court feels that proper course herein would be for petitioner to intimate all depositors, who are non- assessees, to secure PAN number immediately thereon or in 7 alternative, it is for petitioner to take steps to seek PAN number for these non-assessees having no liability to pay tax under provisions of Act. If and when any such application is made by petitioners or through petitioners in W.P.Nos.7449 and 7450 of 2010, Income Tax Department shall take immediate steps to favour petitioner with PAN number for these applicants before completion of assessment proceedings on petitioners in W.P.Nos.7449 and 7450 of 2010 of year under consideration consequent on introduction of Section 260AA of Income Tax Act. In event of petitioner not getting PAN number for any of depositor/non-assessee, it is always open to petitioners in W.P.Nos.7449 and 7450 of 2010 to approach Board under Section 119 of Income Tax Act for any relaxation from applicability of Section 40(a)(i)(a) of Income Tax Act as well as provision on interest on non- deduction. It is hereby made clear that this concession thus given to petitioner is applicable with reference to assessment year 2011-12 alone and not for any subsequent year. Thus petitioners in W.P.Nos.7449 and 7450 of 2010 are hereby granted six months time to make their applications on behalf of depositors for grant of PAN number. above time permit is given considering fact that time limit is sufficient enough for even completing assessment for assessment year 2011-12. 9. above Writ Petitions are disposed of accordingly. No costs. Consequently, connected 8 Miscellaneous Petitions are closed. 5. learned counsel for petitioner would submit that appropriate directions given in above order may also be issued in this writ petition. This plea is resisted by learned Standing counsel appearing for respondent stating that facts in above writ petitions are entirely different wherein two of writ petitioners in earlier batch of four cases were depositors in Finance Company and other two were finance company themselves. However, in instant case, petitioner is Association which is said to consist of members of owners of Lorry, Tanker, Tipper, Trailer and Van of Chennai, Kancheepuram and Thiruvallur districts respectively. Therefore, factual matrix in this case are entirely different. If individual members of Association are aggrieved by notification issued by Government of India, then it is for them to approach Court or Authority concerned for appropriate relief. 6. Hence, with above observation, leaving it open to members of Association to work out remedy in accordance with law, writ petition is disposed of. No costs. Consequently, connected Miscellaneous Petition is closed. 10.11.2014 rgr 9 Index:Yes/No 10 T.S.SIVAGNANAM, J. rgr 1.The Secretary, Union of Bank, Ministry of Finance, North Block, New Delhi 110 001. 2.The Chairman Central Board of Direct Taxes, North Block, New Delhi 110 001. W.P.No.10036 of 2010 10.11.2014. Chennai, Kancheepuram, Thiruvallur Lorry, Tanker, Tipper, Trailer, Van Owners' Association Welfare Committee v. Union of Bank/ Chairman Central Board of Direct Taxes, New Delhi