M/s. Newstoday Private Limited, A Private Limited V. Union of India, rep by Secretary,

WP/25021/2005

AI Insights

The case involved M/s. Newstoday Private Limited, which filed a writ petition under Article 226 of the Constitution of India against the Union of India and other income tax authorities. The petitioner challenged the provisions of Section 115WC and Section 115W8(2)(D) of the Income Tax Act, 1961, which imposed a 20% Fringe Benefit Tax on certain benefits related to conveyance, tours, travels, and hospitality services, arguing that these provisions were arbitrary and discriminatory. The petitioner sought parity with other industries that received concessionary benefits of 50%. However, during the proceedings, it was brought to the court's attention that the government had abolished this tax through a subsequent amendment to the Act, rendering the petitioner's grievances moot.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 687844 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 10-08-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: GADI PRAVEEN KUMAR; J V PRASAD
• Assessee Lawyers: B CHANDRASEN REDDY
• Keywords: Fringe benefit tax; Writ of Mandamus; Discriminatory Tax Provisions
• Section: 115WC; 115WM; 115W8(2)(D)

Judgement Text

"[ 33861 HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) THURSDAY ,THE TENTH DAY OF AUGUST TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALISHETTY WRIT PETITION NO: 2502'l OF 2005 Between: M/s. Newstoday Private Limited, A Private Limited, Compaly, .incorpora-ted under the provilions of the Companies Act, '1956 Having its.Reg-istered-office at 6-3-570, Eenadu Complex, Somajiguda, Hyderabad, rep by director Mr. A. GoPal Rao ...PETrroNER AND '1. Union of lndia, rep by Secretary, Ministry of Finance, Nerry Delhi 2. The Chief Commissioner of lncome Tax, AP-|, Aayakar Bhavan, Hyderabad 3. The Deputy Commissioner of lncome Tax, Circle 2 (2), Aayakar Bhavan, HYderabad ...RESP.NDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ order or direction more particularly one in the nature of Writ of Mandmaus- a) Declaring the provision contained in the Section 1 15 WC of the lncome Tax, Act, considering 20o/o as the value of the fringe benefits to the petitioner for the purpose of computation of FBT under the head of conveyance, tours and travels and use of hotel boarding and lodging facilities, Services of Hospitality repair running and maintaining of motors and aircrafts, as being arbitrary, discriminatory and violative of Articles 1+, 1 9(1 )(g) of the Constitution of lndia and treat the petitioner in parity with the industries which are given concessionary benefits of 50% b) Declaring the provision contained in Section 115W8 (2) (D) of the lncome Tax Act, in depriving the benefits in respect of sales promotion including publicity and business promotion to the petitioner' as provided the concessionary benefits in respect of expenditure of hospitality to the hotel industry, for maintenance of motor cars to transporters, expenditure for maintenance of aircraft to Aircraft Carriers, as being arbitrary, discriminatory and violative of Article 14,19 (1Xg) of the Constitution of lndia and treat the petitioner on parity with other businesses by extending the concessionary benefits to the petitioner l.A. NO: 1 OF 2005(WPMP. NO:32 174 0F 2005) Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased direct the respondents to accept payment of Fringe Benefit Tax considering the value of fringe benefit @ 5% instead of 20% Counsel for the Petitioner: SRl. B. CHANDRASEN REDDY Counsel forthe Respondent No.1: SRl. GADI PRAVEEN KUMAR, DY. SOLICITOR GENERAL OF INDIA Counsel forthe Respondent Nos. 2&3: SRl. J.V. PRASAD, SC FOR INCOME TAX DEPT The Court made the following: ORDER THE IION'BLE SRI JUSTICE P.SAM KOSHY AND THE HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY trIRfT PETITION No.25O21 of 2OO5 ORDER: (per Hon'ble Si Ju.sh'ce P.SAM I(OStIf/ Heard Sri B. Chandrasen Reddy, learned . counsel appearing for the petitioner in this writ petition, Sri Gadi Praveen Kumar, learned Dy. Solicitor General of India representing respondent No.l and Sri. J.V.prasad, learned senror standing counsel for the Income Tax Department representing respondent Nos.2 and 3. 2. Today, when the matter is taken up for hearing, learned counsel for the petitioner fairly brought to the notice of this court, the Circular No.2 of 2O1O dated 29.Ol.2OlO, whereby, the Government has inserted a new section 115WM in the Income_ tax Act, 196 1 abolishing the Fringe Benefit Tax on the value of certain fringe benefits containing i., Ct \"pt.r XII-H (Sections 115W to 11sWL) of the lncome-tax Act, 1961. 3. In view of the said circular issued by the Government abolishing the fringe benefit tax by amending the Income-Tax Act, 1961, the grievance of the petitioner does not survive any further and the writ petition therefore is liable to be disposed of accordingly. I 2 To, BM GJ 0 4. The writ petition accordingly stands disposed of. No order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed. //TRUE COPY// SD/- N.CHANDRA SEKHAR RAO ASSISTANT REGISTRAR v' SECTION OFFICER 1. The Secretary, Union of lndia, Ministry of Finance, New Delhi 2. The Chief Commissioner of lncome Tax, AP-|, Aayakar Bhavan, Hyderabad 3. The Deputy Commissioner of lncome Tax, Circle 2 (2), Aayakar Bhavan, Hyderabad 4. One CC to SRl. B. CHANDRASEN REDDY, Advocate [OPUC] 5. One CC to SRl. J.V. PRASAD, SC FOR INCOME TAX DEPT [OPUC] 6. One CC to SRl. GADI PRAVEEN KUMAR, DY. SOLICITOR GENERAL OF rNDrA [OPUC] 7. Two CD Copies HIGH COURT DATED:101812023 ORDER WP.No.25021 ot 2005 DISPOSING OF THE WRIT PETITION WITHOUT COSTS O)cqa E STArC ( !a l o r) 06 SEP ?m ? .r* I 1c DEspfi I & "