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TMI Blog2004 (12) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... lly concurring with the reasonings of the Appellate Assistant Commissioner granting exemption to the payments received in lieu of leave encashment to the assessee while in service? 2. Whether, on the facts and in the circumstances of the case, learned Tribunal was justified in law in not giving effect in the cases under considering to the amendment to section 10(10AA) by the Taxation Laws (Amendment) Act, 1984 (Part I) which has been amended retrospectively with effect from the assessment year 1978-79?" The assessment year 1983-84 is involved in the present reference. The brief facts of the case are as follows: The assessee-respondent, an employee of the District Co-operative Bank Limited, Bijnore, for the accounting period ended on Mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he course of the argument has referred to Circular No. 309, dated July 3, 1981, issued by the Central Board of Direct Taxes on the subject of cash equivalent of leave salary payable on the death of a Government servant to his legal heirs. Para. 2 of the said circular provides that the family of a Government servant, who dies in harness and received the cash equivalent to the leave salary of the deceased employee is not income in the hands of the family as it is not in the nature of income from an employer to employee. The deceased had no right or interest in this receipt. This payment is only by way of financial benefit to the family of the deceased Government servant, which would not have been due or paid had the Government servant been al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion refers to them in section 10 (see Rani Amrit Kunwar v. CIT [1946] 14 ITR 561 (All)). It may be noticed here that clause(1)(va) was inserted by the Taxation Laws (Amendment) Act, 1984 with effect from April 1, 1978. Simultaneously section 10(10AA) was inserted by the Finance Act, 1982 with effect from April 1, 1978. In it, at all places, "whether on superannuation" was substituted for "on superannuation" by the Taxation Laws (Amendment) Act, 1984, with effect from April 1, 1978. Section 10(10AA) as it stood at the relevant point of time provided that the receipt by way of leave encashment paid to the employee at the time of retirement on superannuation is specifically exempted from inclusion in the recipients total income. The said amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he true meaning of the words used in the statute as a medium of expression to communicate a particular thought. The task is not easy as the language is often misunderstood even in ordinary conversation or correspondence. The tragedy is that although in the matter of correspondence or conversation the person who has spoken the words or used the language can be approached for clarification, the Legislature cannot be approached as the Legislature, Rafter enacting a law or Act, becomes functus officio so far as that particular Act is concerned and it cannot itself interpret it. No doubt, the Legislature retains the power to amend or repeal the law so made and can also declare its meaning, but it can be done only by making another law or statute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xhausted by the enumeration, (4) the general terms follow the enumeration, and (5) there is no indication of a different legislative intent." In the case of Kamlesh Kumar Sharma v. Yogesh Kumar Gupta, AIR 16 1998 SC 1021 ; [1998] 1 JT 642, the Supreme Court interpreted the word "otherwise" occurring in section 13(4) of the U.P. Higher Education Services Commission Act, 1980. This section provides for the filling of vacancies "occurring due to death, resignation or otherwise." An argument was raised before the Supreme Court that the words "otherwise" should not be read as ejusdem generis, but in a wide connotation covering all vacancies. The apex court after careful consideration of the scheme of the Act observed that if the aforesaid argum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is retirement or superannuation or severance of relationship. In the case of M. Krishna Murthy v. CIT [1985] 152 ITR 163 (AP), the High Court interpreting the phrase "profits in lieu of salary" held that the expression "salary" will include the sum received by the assessee towards the leave encashment amount. With a view to give a limited relief to a retiring employee clause (10AA) was inserted in section 10 of the Act. Reference was made by learned standing counsel towards Circular No. 394 dated September 14,1984. The relevant portion of the said circular reads as follows: "6.2 It has come to notice that attempts have been made by taxpayers to claim exemption under the aforesaid provision in respect of payments received by them for not ut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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