“AOP’S OR BOI’S INCLUDED IN THE DEFINITION OF ‘PERSON’ HELD AS NOT UNCONSTITUTIONAL”
“AOP’s or BOI’s included in the definition of ‘person’ held as not unconstitutional”
In recent times, owing to the writ petition filed in High Court of Punjab & Haryana challenging the validity of definition of person as given under Section 65B(37) of Finance Act, 2012 to the extent it includes an association of persons or body of individuals whether incorporated or not, the honorable court has held that above said inclusion is not unconstitutional. (Jaswant Singh Mann V. Union of India (2015) (Punjab & Haryana High Court)
The Finance Act, 1994 as amended by Finance Act, 2012 clarifies the definition of person in clause 37(vii) of Section 65B, wherein it is given that: Person includes An association of persons or body of individuals, whether incorporated or not.
In the instant case, petitioners owned a property in equal shares whereby they share 1/6th each. They have let out that property and have received rent individually from tenants. They have booked their income individually and filed respective ITRs accordingly. However, petitioners were issued a common notice for payment of service tax on renting/leasing of immovable property for commercial purposes by the department.
Petitioners has challenged above given definition of person contending therein that said definition is contrary to Section 3(42) of General Clauses Act, 1897 and Section 26 of Income Tax Act, 1961.
In opposite to the contention of petitioners, high court has held that once there exist legislative competence in the Parliament to enact a provision or when learned counsel for the petitioners has nothing to demonstrate that the same is arbitrary, discriminatory or violative of Article 14 of the Constitution of India, it cannot be declared to be unconstitutional
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