TMI Blog1974 (3) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... given up. The assessment year in question is 1968-69. The accounting year commenced on April 1, 1967, and ended on March 31, 1968. The assessee filed its return showing an income of Rs. 1,07,50,950 and claimed that it was a company in which the public were substantially interested within the meaning of section 2(18) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). The Income-tax Officer after referring to sub-clauses (i) and (iii) of clause (b) to section 2(18) of the Act did not give a finding that these sub-clauses were not satisfied. He, however, proceeded on the basis of sub-clause (ii) of clause (b) of section 2(18) of the Act which is in the following terms : " the said shares were at any time during the relevant previous year the subject of dealing in any recognised stock exchange in India or were freely transferable by the holder to the other members of the public." and held that the conditions of this sub-clause were not satisfied. According to him, the requirements of this clause were: (a) that the shares of the said company could at any time during the relevant previous year be the subject of dealing in any recognised stock exchange in India, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company was the one in which the public were substantially interested for purposes of 1968-69 assessment, and it should be charged to tax on that basis. The controversy is decided in its favour." Dissatisfied with the decision of the Appellate Assistant Commissioner, the department preferred an appeal to the Income-tax Appellate Tribunal, Chandigarh Bench. The Tribunal affirmed the decision of the Appellate Assistant Commissioner and rejected the appeal. The relevant observations of the Tribunal are as follows: " We now turn to the main question. The revenue wants us to read sub-clause (ii) as analysed below: (a) the said shares were at any time during the relevant previous year the subject of dealing in any recognised stock exchange in India. (b) the said shares were freely transferable by the holder to the other members of the public." On the other hand, Shri Dastur, who very ably and intensively argued the case, wanted us to read the sub-clause (ii) as follows : (ii) the said shares were, at any time during the relevant previous year, the subject of dealing in any recognised stock exchange, and the said shares were at any time during the relevant previous ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of taxing statutes, viz., that in case of doubt the more favourable constructions should be adopted. This has been repeatedly laid down and is a well-known rule of construction in difficult and doubtful cases. This principle can be called 'the principle of lesser burden' and the Supreme Court has explained it as follows (Shahzada Nand's case ):...... in a case of reasonable doubt, the construction most beneficial to the subject is to be adopted." The House of Lords expressed it as follows: National Provident Fund Institution v. Brown : " In any case, the statutory language cannot be construed by asking which construction will most benefit the revenue." Shah J. explained how this rule is to be applied keeping in view the rule of strict construction as follows (C. A. Abraham v. Income-tax Officer): "In interpreting a fiscal statute, the court cannot proceed to make good deficiencies if there be any ; the court must interpret the statute as it stands and in case of doubt in a manner favourable to the taxpayer." As we have pointed out, it is a difficult and doubtful case in which both sides have much to say. We, therefore, would give the benefit of doubt to the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any one given point of time". Faced with this situation, learned counsel for the department contends that the expression "said shares" in clause (ii) of section 2(18)(b) must take its colour from clause (b)(i) of the said sub-section and, therefore, the transferability has to be throughout the relevant year. This contention cannot be accepted because different periods are prescribed for different clauses of section 2(18)(b). So far as clause (i) is concerned, it uses the expression "throughout the relevant previous year"; clause (ii) uses the expression "during the relevant previous year" and clause (iii) uses the expression "at no time during the relevant previous year". If the object of the legislature was that the expression "relevant previous year" was to have the same meaning, it would have used the expression "throughout the relevant previous year" and not three different expressions with regard to the previous year in the same provision in the three different clauses. In the scheme of the Income-tax Act, different provisions provide different periods of time. For instance, section 23(3)(a) mentions the period of the whole of the previous year; section 24(1)(ix) mentions a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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