The two-judge bench of the Supreme Court of India, recently upheld the validity of the provisions of the Taxation Laws (Second Amendment) Bill, 2016 provides for imposition of tax, surcharge, penalty and deposit of income under the Pradhan Mantri Garib Kalyan Yojana.
The petitioners approached the Apex Court through a Writ petition under Article 32 of the Constitution challenging the provisions of the Taxation Laws (Second Amendment) Bill, 2016. The petitioners urged that the provisions of the Section 199D(2), 199E and 199F of the Finance Act, 2016, mandates levy of tax, surcharge, penalty and deposit of 25% of disclosed income for 4 years under the scheme, Pradhan Mantri Garib Kalyan Yojana, 2016 is illegal and are liable to be struck down.
The petitioner sought for a direction to the Central Government to charge income tax to citizens on their undisclosed income without their being levy of any sort of penalty and surcharge, provision for withholding of income, as prescribed under the Bill. It was further prayed that the Court shall direct the Government to declare that half the proceeds be used to compensate the honest taxpayer by way of tax credit.
While dismissing the petition, the bench comprising of Justice Dipak Misra and Justice Amitava Roy noted that the petitioners are suggesting for a different scheme to be implemented by the Union of India. “Needless to say, this Court cannot enter into or encroach upon the policy making arena and suggest a different policy on the foundation that the policy framed by the Union of India could have been better. That is not within the domain of the Court. There is a distinction between assailment of the constitutional validity of a policy and conception of framing of a better policy.”
The Taxation Laws (Second Amendment)2016 has come into force on 15th December, 2016. The Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016 (the Scheme) introduced vide the said Act and commenced on 17th December, 2016 and shall remain open for declarations up to 31.03.2016.
Read the full text of the order below.
