Income Tax Act, 1961: s. 254(2A) third proviso – Provision as regards appellate tribunal granting stay – Third proviso providing for automatic vacation of a stay that has been granted on the completion of 365 days, whether or not the assessee is responsible for the delay caused in hearing the appeal – Constitutional validity of – Held: Third proviso to s. 254(2A), is both arbitrary and discriminatory and, thus, liable to be struck down as offending Art. 14 – Unequals are treated equally – No differentiation is made by the third proviso between the assessees who are responsible for delaying the proceedings and assessees who are not so responsible – Also, the said proviso would result in the automatic vacation of a stay upon the expiry of 365 days even if the Appellate Tribunal could not take up the appeal in time for no fault of the assessee – Further, vacation of stay in favour of the revenue would ensue even if the revenue is itself responsible for the delay in hearing the appeal – Thus, the Third proviso to s. 254(2A) will now be read without the word “even” and the words “is not” after the words “delay in disposing of the appeal” – Any order of stay shall stand vacated after the expiry of the period or periods mentioned in the Section only if the delay in disposing of the appeal is attributable to the assessee – Constitution of India – Art.14.

Tax/Taxation: Tax statutes – Challenge to tax statutes u/Art. 14 – Grounds for challenge – Held: Can be on grounds relatable to discrimination as well as grounds relatable to manifest arbitrariness, which may be procedural or substantive in nature – Constitution of India – Art.14.

Tax statutes – Interpretation of – Golden rule of interpretation – Significance of – Held: Golden rule of interpretation cannot be ignored while interpreting tax statutes.