TMI Blog2017 (8) TMI 1421X X X X Extracts X X X X X X X X Extracts X X X X ..... are brought in to give benefit to the employees to be achieved or to be discontinued by interpreting the same which is not beneficial to the employer-assessee. In that view of the matter, in the backdrop of the above clarification, we are of the opinion that the view taken by the Supreme Court in Allied Motors (1997 (3) TMI 9 - SUPREME COURT) and Alom (2009 (11) TMI 27 - SUPREME COURT), it is clear that it is a curative amendment which has to be given retrospective effect and the contention which has been raised by Mr. Jhanwar that it is for subsequent year and previous years and it was not restricted only for one year, should be accepted and we accept the same. - Decided in favour of assessee. - D.B. Income Tax Appeal No. 172/2010, D.B. Income Tax Appeal No. 79/2012, D.B. Income Tax Appeal No. 159/2011 And D.B. Income Tax Appeal No. 288/2011 - - - Dated:- 21-8-2017 - Mr. K.S. Jhaveri And Mr. Inderjeet Singh JJ. For the Appellant(s) : Mr. R.B. Mathur alongwith Mr. Prateek Kedawat and Ms. Meenal Ghiya Mr. Sameer Jain For the Respondent(s) : Mr. Sanjay Jhanwar alongwith Ms. Archana, Mr. P.K. Kasliwal, Mr. Gunjan Pathak alongwith And Ms. Ishita Rawat JUDGMENT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to in the said clause (b) for computing the value of fringe benefits (b) The amount of contribution referred to in section 115 WB (1)(c), which exceeds one lakh rupees in respect of each employee. (ba) The fair market value of the Specified Security or Sweat Equity shares on the date on which the option vests with the employee as reduced by the amount actually paid by, or recovered from the employee in respect of such security or shares. (c) 20% (Twenty per cent) of the expenses referred to in section 11 5WB (a) to (1) (d) Fifty per cent, of the expenses referred u/s 1 15WB(2)(1) to (m). (e) Five per cent of the expenses referred in clause (Q) of section 1 15WB(2). 5. He contended that in view of the clear provisions and the speech which has been reproduced by the Tribunal which reads as under:- However, the another contention of the assessee that amendment made to section 115 WC(1)(b) from A Y 2007-08 is clarificatory and applied retrospectively has merit. The Finance Minister in his budget speech while introducing this amendment reported at 281 ITR 58-59 (Statute), para 172 has stated as under:- Fringe Benefit Tax (FBT) was in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing majority of employees to make it parallel with the deduction provided u/s 80C read with section 80CCD. We find that with effect from 1.4.2004, contribution made by the employer under a pension scheme is chargeable to tax as salary u/s 17(1)(vii) and the same is allowed deduction u/s 80CCD within the overall limit of ₹ 1,00,000/-. To make provisions of section 115WB align to section 80CCD amendment was made in section 115WC not to consider the contribution upto ₹ 1,00,000/- in respect of each employee liable for fringe benefit tax. Section 17(1)(viii) read with section 80 CCD was inserted w.e.f. 1.4.2004 and the limit for deduction under section 80CCD was limited upto ₹ 1,00,000/- u/s 80CCE w.e.f 1.4.2006. Considering this the amendment is made u/s 115WC(1)(b) by Finance Act, 2006. This shows that amendment is only clarificatory and therefore this amendment needs to be applied from assessment year 2006-07 when the tax on fringe benefit was introduced in the statute. 9.The Hon'ble Supreme Court in case of Allied Motors Pvt. Ltd. vs. CIT (supra), while interpreting the proviso to section 43B inserted w.e.f 1.4.1988 has been pleased to hold that the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ace of the words 'in addition to any tax payable' held the amendment to be clarificatory in nature having retrospective effect by observing that the circumstances under which an amendment was brought into existence and the consequences of the amendment will have to be taken care of while deciding whether the amendment was clarificatory or substantive in nature and whether it will have retrospective effect or it was not so. If it is a necessary implication from the language employed that the Legislature intended particular section to have retrospective operation, the courts will give it such an operation. Hon'ble Supreme Court in case of CIT vs Vegetable Products Ltd. (Supra) held that concession provision should be liberally construed so as to sub serve the purpose for which it is intended. 10. The above principle of interpretation laid down in various judgments of Hon'ble Supreme Court when read in context with the purpose and intention for which the amendment was made u/s 115WB (1)(c) leaves no scope of debate that the said amendment was to remedy the unintended consequences and therefore, it is required to be considered as retrospective in operation so that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Alom Extrusions Limited, (2009) 319 ITR 306 (SC) 9. We find no merit in these civil appeals filed by the Department for the following reasons: firstly, as stated above, Section 43B [main section], which stood inserted by Finance Act, 1983, with effect from 1st April, 1984, expressly commences with a non-obstante clause, the underlying object being to disallow deductions claimed merely by making a Book entry based on Mercantile System of Accounting. At the same time, Section 43B [main section] made it mandatory for the Department to grant deduction in computing the income under Section 28 in the year in which tax, duty, cess, etc., is actually paid. However, Parliament took cognizance of the fact that accounting year of a company did not always tally with the due dates under the Provident Fund Act, Municipal Corporation Act [octroi] and other Tax laws. Therefore, by way of first proviso, an incentive/relaxation was sought to be given in respect of tax, duty, cess or fee by explicitly stating that if such tax, duty, cess or fee is paid before the date of filing of the Return under the Income Tax Act [due date], the assessee(s) then would be entitled to deduction. However, this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 43B stood inserted. This is how the question of retrospectivity arose in Allied Motors (P) Limited (supra). This Court, in Allied Motors (P) Limited (supra) held that when a proviso is inserted to remedy unintended consequences and to make the section workable, a proviso which supplies an obvious omission in the section and which proviso is required to be read into the section to give the section a reasonable interpretation, it could be read retrospective in operation, particularly to give effect to the section as a whole. Accordingly, this Court, in Allied Motors (P) Limited (supra), held that the first proviso was curative in nature, hence, retrospective in operation with effect from 1st April, 1988. It is important to note once again that, by Finance Act, 2003, not only the second proviso is deleted but even the first proviso is sought to be amended by bringing about an uniformity in tax, duty, cess and fee on the one hand vis-a-vis contributions to welfare funds of employee (s) on the other. This is one more reason why we hold that the Finance Act, 2003, is retrospective in operation. Moreover, the judgment in Allied Motors (P) Limited (supra) is delivered by a Bench of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction. Though equity and taxation are often strangers, attempts should be made that these do not remain always so and if a construction results in equity rather than in injustice, then such construction should be preferred to the literal construction. For the afore-stated reasons, we hold that Finance Act, 2003, to the extent indicated above, is curative in nature, hence, it is retrospective and it would operate with effect from 1st April, 1988 [when the first proviso came to be inserted]. For the above reasons, we find no merit in this batch of civil appeals filed by the Department which are hereby dismissed with no order as to costs. Civil Appeal No. 7755/2009 @ S.L.P. (C) No. 20581/2008 and Civil Appeal No. 7757/2009 @ S.L.P. (C) No. 18380/2009: 2. Allied Motors (P.) Ltd. vs. Commissioner of Income Tax, Delhi,(1997) 224 ITR 677 (SC) 10. Therefore, in the well known words of Judge Learned Hand, one cannot make a fortress out of the dictionary; and should remember that statutes have some purpose and object to accomplish whose sympathetic and imaginative discovery is the surest guide to their meaning. In the case of R.B Jodha Mai Kuthiala v. Commissioner of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retrospective. The view, therefore, taken by the Delhi High Court cannot be sustained. 10. He also relied upon decision of Gujarat High Court wherein it has observed as under:- Commissioner of Income Tax (TDS) vs. Oil and Natural Gas Corporation (India) Ltd. (2015) 61 taxmann.com 105(Gujarat) 12. Mr. Bhatt has made an endeavour that the Tribunal has not decided the issues as contended by the Department that uniform allowance is part of the salary under section 17(1), and even if it is considered to be perquisite, in view of the statutory provisions, the same will be part of the salary, and therefore, TDS was required to be deducted. 11. We have gone to the provisions of the Act. The purpose is to have a harmonious relation between the employer and the employee and when the statute has put interpretation, there cannot be an interpretation which create doubt inasmuch as he made the payment for the benefit of the employer. He is also to be taxed. 12. In that view of the matter, when the court has to interpret the law, taxing statute has to see whether the object for which the provisions are brought in to give benefit to the employees to be achieved or to be disc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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