JUDGMENT RAJENDRA BABU, J. 1. The second petitioner is a partnership firm of which the first petitioner is a partner. Both the petitioners are producers of films in Kannada. 2. During the asst. yr. 1986-87 the second petitioner produced a feature film. It is the case of the petitioners that as far as the petitioner in writ petition 18136 of 1989, the ITO accepted the method of accounting and computed the income or loss of that petitioner on the basis of the accounts maintained by him. It is stated that for the first time, for the asst. yr. 1984- 85 the Dy. CIT computed the first petitioner's income by application of r. 9A of the IT Rules 1962 (hereinafter referred to as the rules), which was framed in exercise of the powers vested in the CBDT under s. 295 of the IT Act, 1961 (hereinafter referred to as the Act), as per the assessment order Annexure A. 3. According to the petitioners, the second petitioner came into existence in the asst. yr. 1984-85 and, for the first time, during the asst. yr. 1986-87 produced a feature film in Kannada. In respect of this petitioner for the asst. yr. 1986-87 the Dy. CIT computed the income of this petitioner by application of r. 9A of the Rules. 4. Petitioners claim that they have been employing the mercantile system of accounting and contend that the assessing authorities did not find fault with the method of accounting employed by the petitioner, nor have they stated that the accounts maintained by them was incorrect or incomplete in any particulars, much less did they record any finding that the method of accounting employed by the petitioners was such that the income could not properly be deduced therefrom. It is, therefore, contended that in the absence of findings as aforesaid the respondents could not have applied r. 9A of the Rules for computing the income of the petitioners. Rule 9A of the rules came to be introduced by the seventh amendment of the rules in the year 1976. It is, therefore, contended that in the absence of findings as aforesaid the respondents could not have applied r. 9A of the Rules for computing the income of the petitioners. Rule 9A of the rules came to be introduced by the seventh amendment of the rules in the year 1976. During the relevant period the said rule read as follows : "9A(1) In computing the profits and gains of the business of production of feature films carried on by a person (the person carrying on such business hereafter in this rule referred to as film producer), the deduction in respect of the cost of production of a feature film certified for release by the Board of film censors in a previous year shall be allowed-- (a) in the case of a feature film, being a regional language feature film, in accordance with the provisions of sub-r. (2) to sub-r. (4); (b) in the case of a feature film (not being a regional language feature film), in accordance with the provisions of sub-r. (5) to sub-r. (7)." 5. The Explanation to r. 9A(1) defines "regional language feature film" means a feature film made in any language (other than Hindi or Urdu) specified in the Eighth Schedule to the Constitution. Under r. 9A(3), if the regional language feature film is released for exhibition on a commercial basis at least 90 days before the end of the relevant previous year of certification by the Censor Board, entire cost of production would be allowed as a deduction in that year. Rule 9A(5) provides for deduction in the case of a feature film not being a regional language feature film and r. 9A(5) does not make the release for exhibition on commercial basis 90 days before the end of the relevant previous year as a condition precedent for granting deduction. In the case of non-regional language feature film, the entire cost of production is allowed as a deduction by the Censor Board (sic) irrespective of the date of release of such film for exhibition on commercial basis. 6. It is contended on behalf of the petitioners that the distinction thus maintained draws a hostile discrimination between regional language feature films and non-regional language feature films not having reasonable nexus between the two. 6. It is contended on behalf of the petitioners that the distinction thus maintained draws a hostile discrimination between regional language feature films and non-regional language feature films not having reasonable nexus between the two. IT is urged that fixation of a condition that a regional language feature film must be released for exhibition on commercial basis at least 90 days before the end of the year of certification by the Censor Board is an arbitrary condition and that by fixing such condition the CBDT has exercised its rule making power arbitrarily. Hence, petitioners contend that r. 9A as inserted by the IT (Seventh Amendment) Rules, 1976 is violative of Art. 14 of the Constitution and liable to be struck down. Subsequently, by amendment of the Rules, r. 9A was substituted w.e.f. 2nd April, 1986 by a new sub-rule and sub-rr. (5), (6) and (7) thereof have been omitted. Thereby there is no difference in the method of accounting or computation of income or deductions between the regional language feature film and a non-regional language feature film. Petitioners contend that though the amendment is w.e.f. 1986 it becomes applicable with retrospective effect inasmuch as there is no substitution of the rule. A Division Bench before which this question came up, referred the same for consideration by the Full Bench and the Full Bench by its opinion rendered on 22nd Dec., 1993 [reported as V. Verghese vs. Dy. CIT (1994) 121 CTR (Kar) (FB) 146] held that the assessing authority has jurisdiction to complete the assessment by invoking old sub-r. (1) of r. 9A. 7. Petitioners have also contended that the said rule is ultra vires the Act inasmuch as the same is contrary to s. 145 thereof. Sec. 145 of the Act provides that the income chargeable under the head "profit and gains of business or profession" or "income from other sources" must be computed on the basis of the method of accounting regularly employed by the assessee. Where the assessing authority finds that the accounts are incorrect or incomplete or the income cannot be deduced from the method of accounting, discretionary power is given to the assessing authority to compute the income on such basis that may be determined by such authority. Relying upon the decision of the Supreme Court in CIT vs. McMillan and Co. Where the assessing authority finds that the accounts are incorrect or incomplete or the income cannot be deduced from the method of accounting, discretionary power is given to the assessing authority to compute the income on such basis that may be determined by such authority. Relying upon the decision of the Supreme Court in CIT vs. McMillan and Co. (1958) 33 ITR 182 (SC), it is contended that the method of accounting adopted by concerned assessee must be considered and it is only in cases where the method of accounting is rejected for good reasons, then any other method could be adopted by the ITO. It is, therefore, contended that the method of accounting provided under r. 9A for computation of income in a particular way in the case of feature films irrespective of the method of accounting regularly employed by an assessee, is ultra vires s. 145 of the Act. Petitioners make it clear that they have filed appeals against the orders of assessment, but as they cannot challenge the validity of the rule they have approached this Court under its writ jurisdiction. 8. Respondents have filed statement of objections contending that it is permissible for the CBDT to frame appropriate rules and that under the proviso to s. 145 of the Act the Assessing Officer is under no obligation to record finding to the effect that the method of accounting employed by the petitioners was incorrect or incomplete or that the income therefrom could not be deduced and, therefore, it is not necessary to record reasons to bring the case under s. 145 of the Act. It is also contended that there is no discrimination between the regional language feature films and non- regional language feature films as they constitute different classes by themselves and that when the subject or object of taxation being different it is certainly open to the legislature to adopt different methods of taxation. On this basis it is contended that there is no basis for the contentions raised on behalf of the petitioners and the petitions are liable to be dismissed. The first contention to be considered in this case is as to whether the Board has power to make a rule providing for a mode of accounting under the Rules. Rule 9A provides for deduction in respect of expenditure on production of feature film. The first contention to be considered in this case is as to whether the Board has power to make a rule providing for a mode of accounting under the Rules. Rule 9A provides for deduction in respect of expenditure on production of feature film. It is not a mode of accounting that is provided in the provisions at all. Therefore, the contention advanced on behalf of the petitioners that it is a mode of accounting that is provided under the relevant rule is only misconceived. The manner in which the deductions will have to be arrived at is provided in the rules. In Lohia Machines Ltd. vs. Union of India (1985) 44 CTR (SC) 328 : AIR 1985 SC 421 the validity of r. 19A was challenged. The question that came up in that case was as to framing of rules. And the Supreme Court upheld the validity of the said rule which provided for exclusion of all borrowed moneys including long-term borrowings from computation of the capital employed and enacted that computation of the capital employed should be made as on the first day of the computation period and it is held that such a provision was not outside the rule making power. In the present case where a mode of deduction is provided under r. 9A it cannot be said that the same falls outside the scope or the purposes of the Act. The said provision is not merely providing for accounting as contended for the petitioners. Hence, there is no substance in the contention urged on behalf of the petitioners that the said rule is ultra vires of the provisions of the Act. 9. The next question that arises for consideration is whether there is no discrimination between feature films produced in regional languages and those produced in non-regional languages. The provisions relating thereto for the purpose of computation can be set forth as follows : REGIONAL LANGUAGE FILM NON-REGIONAL LANGUAGE FILM Certified by the Censor Board in the "previous year" Certified by the Censor Board in the "previous year" (1) Sells all rights of exhibition in the previous year. (1) Sells all rights of exhibition in the previous year. The provisions relating thereto for the purpose of computation can be set forth as follows : REGIONAL LANGUAGE FILM NON-REGIONAL LANGUAGE FILM Certified by the Censor Board in the "previous year" Certified by the Censor Board in the "previous year" (1) Sells all rights of exhibition in the previous year. (1) Sells all rights of exhibition in the previous year. Entire cost of production will be allowed as deduction from the sale proceeds Entire cost of production will be allowed as deduction from the sale proceeds (2) Exhibits in all or some areas in the "previous year" (2) Exhibits in all territories in the Table in the "previous year" or Sells right of exhibition in respect of some areas in the "previous year" Exhibits in some territories and sells the right in respect of other territories in the "previous year" Exhibits in certain areas and sells right of exhibition in respect of all or some of the other areas in the "previous year" . THE entire cost of production shall be allowed as deduction from the realisation Entire cost of production shall be allowed as deduction from the realisation. Provided the film is released for exhibition at least 90 days before the end of the "previous year". (3) Exhibits in all or some areas in the "previous year", (3) Exhibits in some of the territories in the "previous year" Sells right of exhibition in respect of some areas in the previous year" Sells the right of exhibition in respect of some of the It is only in the case of regional language films the condition "provided the film is released for exhibition at least 90 days before the end of the previous year" is set forth. In the case of non- regional language films such proviso is not there at all. A perusal of the relevant rules would disclose that it makes into two classes of films which are sold in the previous year or exhibited in the previous year and provided that the film is released for exhibition at least 90 days before the end of the previous year. And if the film is not released for exhibition at least 90 days before the end of the previous year, certain proportionate cost shall be allowed. And if the film is not released for exhibition at least 90 days before the end of the previous year, certain proportionate cost shall be allowed. It is not clear from the provision as to why the rule making authority engrafted the proviso that the "film is released for exhibition at least 90 days before the end of the previous year". Except this proviso, in all other respects the provisions applicable both in respect of regional language films and non-regional language films are identical. Why this particular clause or condition is imposed in relation to regional language films not being clear, we specifically asked the learned standing counsel for the respondents to make available the necessary material as to what impelled the Board to frame those rules. All that he did was to refer to a decision of the Madras High Court in Gemini Pictures Circuit Ltd. vs. CIT (1958) 33 ITR 547 (Mad) where certain references were made to the circulars issued by the Board in the context of depreciation of value of films. In the present case we are not concerned with the depreciation of value of films at all. In that case, the assessee had been keeping the accounts in a particular method for several years and that method was sought to be changed and the Court disapproved the same. However, the learned standing counsel insisted upon referring to the said decision to point out that the expected normal life of a film was three years. But that was the contention urged on behalf of the assessee in that case. Even assuming it to be correct we do not see as to how that aspect has any relevance to the question raised in this case as to fixing of a particular period within which the film should have been released to claim benefit of deduction. That aspect has no relevance at all. 10. In INdian Express Newspapers (Bombay) Pvt. Ltd. and Ors., etc., etc., vs. Union of India and Ors. That aspect has no relevance at all. 10. In INdian Express Newspapers (Bombay) Pvt. Ltd. and Ors., etc., etc., vs. Union of India and Ors. AIR 1986 SC 515 the Supreme Court explained the limitations of subordinate legislation in these terms : territories in the "previous year" or exhibits in certain areas and sells right of exhibition in respect of all or some of the other ares in the "previous year" exhibits in some of the territories and sells the right f exhibition in respect of some of the territories If the film is not released for exhibition at least 90 days before the end of the "previous year" Proportionate cost of production shall be allowed as deduction. Certain proportionate cost of production shall be allowed as deduction, Proportion Cost of production equivalent to realisation will be allowed as deduction Sum mentioned in Table A X Cost of production 100 will be the allowance deduction "73. A piece of subordinate legislation does not carry the same degree of immunity which is enjoyed by a statute passed by a competent legislature. Subordinate legislation may be questioned on any of the grounds on which plenary legislation is questioned. IN addition it may also be questioned on the ground that it does not conform to the statute under which it is made. It may further be questioned on the ground that it is contrary to some other statute. That is because subordinate legislation must yield to plenary legislation. It may also be questioned on the ground that it is unreasonable, unreasonable not in the sense of not being reasonable, but in the sense that it is manifestly arbitrary. IN England the Judges would say "Parliament never intended authority to make such rules. They are unreasonable and ultra vires..." It was explained that in India arbitrariness is not a separate ground since it will come within the embargo of Art. 14 of the Constitution. In India any enquiry into the vires of delegated legislation must be confined to the grounds on which plenary legislation may be questioned, on the ground that it is contrary to the statute under which it is made, that it is contrary to other statutory provisions or that it is so arbitrary that it could not be said to be in conformity with the statute or that it offends Art. 14 of the Constitution. On the facts and circumstances of a case, a subordinate legislation may be struck down as arbitrary or contrary to statute if it fails to take into account very vital facts which either expressly or by necessary implication are required to be taken into consideration by the statute or the Constitution. The mere fact that the rule had been laid before Parliament in terms of s. 296 of the Act would not elevate the rule into one of legislation enacted by Parliament. We may usefully refer to the decision of the Supreme Court in Kerala State Electricity Board vs. Indian Aluminium Co. Ltd. AIR 1976 SC 1031 . Therefore, it is certainly open to this Court to consider the question whether the relevant rules are in any way arbitrary or affect Art. 14 of the Constitution in any manner. Even assuming for a moment that it has got elevated itself to the level of a legislation by reason of the laying procedure adopted as contemplated under s. 295 of the Act, still it has got to conform to the provisions of Art. 14 of the Constitution. No rationale is available as to why the rule 'before the end of the previous year is insisted upon to claim deduction under the said rule when such condition is not imposed in the case of non-regional language films. If the life of a film is short or the market of a non-regional language film is circumscribed, we do not think that the release of the film should be within 90 days before the end of the previous year. As to how that aspect is relevant to claim deduction is not at all clear and it appears to us that imposition of such a condition is wholly arbitrary and irrational. Apart from the fact that such condition is not imposed in respect of non-regional language films, in the year 1986 this provision was altogether omitted. Though we do not normally wish to interpret a provision of law by reference to subsequent amendments made to it, still we are not able to understand why that particular rule if it was wholesome was omitted in 1986. Once again the learned standing counsel was not in a position to explain to us that aspect of the matter. As to what reasons impelled the Board to modify the rules cannot be discerned. Once again the learned standing counsel was not in a position to explain to us that aspect of the matter. As to what reasons impelled the Board to modify the rules cannot be discerned. The policy underlying the deduction cannot be different between regional and non-regional language films unless, of course, there are good reasons. No such reasons are forthcoming. IN that view of the matter, we must hold that the expression used in rr. 9A(2) and 9A(3) namely that "and the film is released for exhibition on a commercial basis at least ninety days before the end of such previous year" shall stand quashed. IN other respects the said rules shall remain unaffected. The said expression which we have found to be offending Art. 14 of the Constitution is severable inasmuch as such rule is operated in regard to non-regional language films as is clear from the analysis made above by us. It is a settled rule that if the statute can operate by deleting the unconstitutional portion of it, it can be operated or given effect to, to that extent. And that procedure is adopted by us in this case. Since the petitioners have already filed an appeal as against the assessment orders, it is unnecessary for us to examine the scope or correctness of the assessment orders nor decide the questions relating to the merits of the matters. It is open to the authorities to decide the matter by ignoring the provisions struck down by us in accordance with law. Petitions are allowed accordingly.