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Issues:
Challenge to the legality and constitutionality of the proviso to section 139 of the Income-tax Act, 1961. Analysis: The petitioner, a social worker with a monthly income of Rs. 1,500, challenged the proviso to section 139 of the Income-tax Act, claiming it to be illegal and unconstitutional. The petitioner argued that the conditions specified in the proviso, related to ownership of property and telephone subscription within specific urban areas, were discriminatory and unrelated to the objective of assessing income tax. The petitioner contended that these conditions unfairly targeted individuals with property and telephone subscriptions while ignoring those with higher income and property holdings. The petitioner deemed the geographical classification arbitrary and the filing requirement burdensome. The Income-tax Department, represented by the standing counsel, defended the proviso's classification as reasonable, aimed at widening tax collection. The Department argued that the conditions were indicators for presuming taxable income and simplifying the return filing process. The proviso, introduced in 1997, aimed to identify potential taxpayers based on economic indicators like property ownership and telephone subscriptions. The government justified the conditions as aiding in assessing tax liability and not as a direct assessment of income. The government specified urban areas for the proviso, citing a reasonable nexus between property value and income, as well as the relevance of telephone subscriptions to individual income. The court upheld the validity of the proviso to section 139 of the Income-tax Act, dismissing the petitioner's claims of illegality. The judge found the specified conditions, including property ownership and telephone subscription, as reasonable indicators for presuming taxable income. The court noted that these conditions were not arbitrary and could assist in identifying potential taxpayers. The judge emphasized the duty of citizens to file returns, even without assessable income, if they met the specified conditions. Ultimately, the court ruled in favor of the Income-tax Department, rejecting the petitioner's challenge to the proviso's legality and constitutionality.
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