TMI Blog1991 (11) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as part of the taxable income of the assessee with reference to section 43B of the Act and an addition was made to the income returned. The matter was carried in appeal before the first appellate authority. While, in some cases, the said authority deleted the addition, in some other cases, the same was sustained. Where the addition was deleted, the Revenue carried the matter in second appeal, and where the addition was sustained, the assessee did so. In the cases, where the addition was deleted, the first appellate authority observed that, since the amount was not claimed as deduction in the profit and loss account, there is no scope for applying section 43B of the Act. The Tribunal did not indicate detailed reasons, but decided in favour of the assessee, in view of the decision of the Cochin Bench of the Tribunal in the case of S. Govindaraja Reddiar v. ITO [1986] 19 ITD 177. It directed the Income-tax Officer to verify the facts of the case keeping in view the principles laid down by the said Tribunal and finalise the matter. The Revenue sought for reference of five questions to this court under section 256(1) of the Act, but the Tribunal referred the question as indicated ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n shall, in respect of any sum referred to in clause (b), be allowed unless such sum has actually been paid during the previous year on or before the due date as defined in the Explanation below clause (va) of sub-section (1) of section 36." Both the provisos have been amended by the Finance Act, 1989. In the second proviso, the words " during the previous year " have been deleted. The position under the second proviso is that an assessee may claim deduction on account of payment made towards sales tax in particular accounting year if it was paid by him on or before the " due date " as defined in the Explanation below clause (va) of sub-section (1) of section 36. The Memorandum to the Finance Bill, 1989, clarified the object of deleting the words during the previous year " in the following words : " Under the existing provisions of section 43B of the Income-tax Act, 1961, it is also provided that any sum payable by the assessee as an employer by way of contribution to the provident fund or superannuation fund, etc., is not allowable as a deduction unless the same is paid 'during the previous year on or before the due date'. The payment in respect of the last month of a previous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This is against the legislative intent and it is, therefore, proposed, by way of a clarificatory amendment and for removal of doubts, that the words 'any sum payable', be defined to mean any sum, liability for which has been incurred by the taxpayer during the previous year irrespective of the date by which such sum is statutorily payable. " The stand of the Revenue is that the expression " any sum payable as appearing in Explanation 2 means the sum for which the assessee incurred liability in the previous year, even though such sum might not have been payable till that year under the relevant law. The real intent of the first proviso is that with effect from April 1, 1988, where any sum referred to in clause (a) or clause (c) or clause (d) is actually paid by the assessee, on or before the due date applicable in his case for furnishing the return of income under sub-section (1) of section 139, in respect of the previous year in which the liability to pay such sum was incurred, and the evidence of such payment, is furnished by the assessee along with such return, nothing contained in section 43B shall apply to such sum. Since the assessment year involved in the case at hand is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y unjust result which could never have been intended by the Legislature, the court might modify the language used by the Legislature so as to achieve the intention of the Legislature and produce a rational construction. The warning administered by justice Learned Hand was taken note of, and it was observed that one should not make a fortress out of the dictionary but remember that statutes always have some purpose or object to accomplish and sympathetic and imaginative discovery is the surest guide to their meaning. 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. Any legal system, especially one evolving in a developing country, might permit judges to play a creative role and innovate to ensure justice without doing violence to the norms set by legislation. (See CST v. Auraiya Chamber of Commerce [1987] 167 ITR 458 (SC)). In interpreting relevant procedural provisions, fairness and justice should be the approach and even in a fiscal statute, equity should prevail, wherever the language pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithout any reasonable nexus. That could not have been the legislative intent as the avowed object indicated for introducing the provision is clearly discernible to be otherwise. Statutes must have some purpose or object, whose imaginative discovery is judicial craftsmanship. We need not always cling to literalness and should seek to endeavour to avoid an unjust or absurd result. See State of Tamil Nadu v. Kodaikanal Motor Union (P.) Ltd., [1986] 62 STC 272 ; AIR 1986 SC 1973. In order to interpret a particular provision and to infer the intention of the Legislature, the objects and reasons stated in the Bill, when it is presented in the Legislature could be used. (See Rib Tapes (India) P. Ltd. v. Union of India, AIR 1986 SC 2014). When the words of a section are clear, but its scope is sought to be curtailed by construction, the view expressed by Lord Coke in Heydon's case [1584] 3 Co Rep 7a can be pressed into service. It is now commonly known as interpretation according to Heydon's Rule. In the words of Lord Coke, to arrive at the real meaning, it is always necessary to get an exact conception of the aim, scope and object of the whole Act ; to consider what was the mischief or de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eel Corporation [1991] 191 ITR 676. It is relevant to mention here that the special leave petition filed by the Revenue in respect of the decision of the Patna High Court in Jamshedpur Motor Accessories Stores' case [1991] 189 ITR 70 was dismissed by the Supreme Court by order dated July 19, 1991, in S. L. P. (Civil) No. 11793 of 1991. Though dismissal of the special leave petition cannot be construed to be expression of any opinion about the merits, we have felt inclined to indicate that, in view of the cleavage of view. It is also significant because special leave has been granted by the apex court in Special Leave Petition (Civil) No. 6467 of 1991 on May 8, 1991, in the case of Weston Electronics Ltd. v. Union of India, where the Delhi High Court following its decision in Sanghi Motors' case [1991] 187 ITR 703 and Escorts Ltd.'s case [1991] 189 ITR 81 had dismissed the writ application. Before we part with the case we would like to point out that when the Tribunal disposes of a second appeal by relying on an earlier decision, the gist of the conclusions arrived at in the earlier case should be indicated. We also noticed in some of the cases that the first appellate authori ..... X X X X Extracts X X X X X X X X Extracts X X X X
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