TMI Blog2000 (12) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... round in which the reference has been made is as follows: At the instance of the Revenue, the Income-tax Appellate Tribunal (in short "the Tribunal") referred the following two questions for the opinion of this court under section 256(1) of the Act : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessee is entitled to exemption under section 80-O on the gross receipts and not on the net income ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in deleting the disallowances made by the Income-tax Officer of the consultation fees and commission paid to the managing director, Shri T. K. Roy ?" During the hearing of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been noticed and a bare reading of the provision introduced by way of amendment makes the position clear that section 80AB has no application to the facts of the case. In order to appreciate the rival submissions, it would be proper to quote sections 80AB and 80-O. They, at the relevant point of time, read as follows : "80AB. Deductions to be made with reference to the income included in the gross total income.---Where any deduction is required to be made or allowed under any section (except section 80M) included in this Chapter under the heading 'C---Deductions in respect of certain incomes' in respect of any income of the nature specified in that section which is included in the gross total income of the assessee, then, notwithsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, the expression "a deduction of the whole of such income" had been substituted for "deduction from such income of an amount equal to 60 per cent. thereof" by the Finance Act, 1968, with effect from April 1, 1969. Section 17 of the Finance Act, 1974, on which considerable emphasis was laid by learned counsel for the assessee reads as follows : "17. Amendment of sections 80N and 80-O of the Income-tax Act as they stood during certain periods.---The provisions of section 80N of the Income-tax Act, as they stood immediately before the 1st day of April, 1969, and the provisions of section 80-O of that Act, as they stood from time to time before the 1st day of April, 1972, shall have and shall be deemed to have had effect subject to the mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the heading "C.---Deductions in respect of certain incomes" in respect of any income specified in that section which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section, the manner of computation has to be in accordance with the provisions of section 80AB. The expression "notwithstanding anything contained in that section" is of great relevance and significance. Use of the expression "notwithstanding anything contained" is known as non obstante clause. Sometimes it is placed at the beginning of a provision and sometimes in the middle of it. The effect of the expression "notwithstanding anything contained" is that in case of conflict between the two provisions overriding effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. A non obstante clause is also to be distinguished from the phrase "without prejudice". Ordinarily, there is a close approximation between the non obstante clause and the enacting part of the section and the former may throw some light as to the scope and ambit of the enacting part in case of ambiguity. A non obstante clause is a legislative device which is usually employed to give overriding effect to certain provisions over some contrary provisions that may be found either in the same enactment or some other enactment ; that is to say to avoid the operation and effect of all contrary provisions (see Union of India v. G. M. Kokil, AIR 1984 SC 1022), a non obstante clause is, to put it differently, a legislative device to modify the ambit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stood in relation to the deductions to be made in respect of the income specified under the head 'C' of Chapter VI-A of the Act, Mr. Ramamurti also referred to a circular dated May 10, 1982, issued by the Central Board of Direct Taxes in support of his submission but then this circular has since been withdrawn." Earlier in H. H. Sir Rama Varma v. CIT [1994] 205 ITR 433, the apex court had observed as follows : "In the case of Distributors (Baroda) P. Ltd.'s case [1985] 155 ITR 120 (SC), it was the retrospective effect of section 80AA which was under challenge. The court, as aforementioned, interpreted section 80M in a manner different from that placed upon it in Cloth Traders' case [1979] 118 ITR 243 (SC), it held that the decision in C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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