TMI Blog1993 (9) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... 43B as it stood prior to the amendment to the section made by Finance Act, 1988 w.e.f. 1-4-1989. 3. Mr. S. C. Chatterjee, the Learned Departmental Representative, however raised a point that just as it has been held in the case of CIT v. Sri Jagannath Steel Corpn. [1991] 191 ITR 676 by the Calcutta High Court that the first proviso to section 43B inserted by the Finance Act, 1987 w.e.f. 1-4-1988 was applicable with retrospective effect from 1-4-1984 (1984-85 assessment), it should be held that the substitution of clause (a) of section 43B by Finance Act, 1988 w.e.f. 1-4-1989 took retrospective effect from 1-4-1984 and therefore must be held applicable for the assessment year in appeal. We are not able to uphold the point. It is a cardinal principle of construction that every statute is prospective in application unless it is expressly or by necessary implication made to have retrospective operation. A statute which deals with substantive rights is presumed to be only prospective. Statutes dealing with matters of procedure or the machinery provisions of the Act are presumed to be retrospective, unless such retrospectivity is textually inadmissible. The principle against the retro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xist under section 25A, would be to give retrospective operation to sub-section (6) of section 171 which is not warranted either by the express language of that provision or by necessary implication. Sub-section (6) of section 171 can be given full effect by interpreting it as applicable only in a case where the assessment of a Hindu undivided family is made under section 143 or section 144 of the new Act. We cannot, therefore, consistently with the rule of interpretation which denies retrospective operation to a statute which has the effect of creating or imposing a new obligation or liability, construe sub-section (6) of section 171 as embracing a case where assessments of a Hindu undivided family is made under the provision of the old Act. Here is the present case, the assessments of the Hindu undivided family for the assessment years 1950-51 to 1956-57 were completed in accordance with the provisions of the old Act which included section 25A and the Income-tax Officer was, therefore, not entitled to avail of the provision enacted in sub-section (6) read with sub-section (7) of section 171 of the new Act for the purposes of recovering the tax or any part thereof personally from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons who do not use Government money for their own purposes. There has been a legal controversy whether the words ' tax ' and ' duty ' cover within their fold certain statutory levies like cess, fees, etc. It has been held by some appellate authorities that such amounts could not be covered under the expressions ' tax ' or ' duty '. Such interpretations are against the legislative intent. Therefore, as a matter of clarification, the Bill provides that cess or fees by whatever name called, which have been imposed by any statutory authority, including a local authority, will also be allowed as a deduction only if these are actually paid. In recent years, it has been noticed that there is a tendency on one pretext or the other to postpone the payment of interest due to various financial institutions on loans, etc., provided by them and thus the money due to financial institutions is used for business purposes even though it has been claimed as a deduction in the income-tax assessment. The phenomenon has the effect of straining the cash flow and liquidity of the public financial institutions, thereby reducing their ability to extend new credits. Further, a grave consequence of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r effect of any statutory provision ordinarily contains the word ' declared ' or the words ' for the removal of doubts '. It is also usual, if retrospectivity is intended, to add the words ' shall be deemed always to have meant '. These words which are usually coined by the Legislature to denote that the amendment or the statute will take retrospective effect are absent in the provision with which we are dealing. Therefore, there are neither express words nor is there any justification for implying retrospectivity of operation of the clause. 5. It now remains for us to consider the main plank of the argument of Mr. Chatterjee that since the Calcutta High Court has held the first proviso to section 43B to be retrospective in nature, on parity of reasoning we should hold that the new clause (a) to section 43B also takes effect retrospectively from 1-4-1984. There is a fallacy in the argument. The first proviso to section 43B with which the Calcutta High Court was concerned in Sri Jagannath Steel Corpn.'s case, was to the effect that if the tax or duty is actually paid by the assessee before the date on which the return of income is due, the payment has to be allowed as a deduction, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment of the Calcutta High Court, in our humble understanding, cannot be read as advancing the contention of Mr. Chatterjee for the Department. 6. For the aforesaid reasons, we reject the arguments of Mr. Chatterjee for the Department that the new substituted clause (a) must be taken to act retrospectively from 1-4-1984. We, therefore direct the departmental authorities to delete the disallowance of the cess on tea and the education cess. 7. The only other ground is against the levy of interest under section 217. The grievance of the assessee is that the CIT (A) was wrong in saying that the assessee did not advance any argument against the levy. The learned counsel for the assessee drew our attention to the statement of facts and the grounds of appeal filed before the CIT (A) to show that the assessee had denied his liability to pay interest. This ground, however fades into insignificance after the order of the Assessing Officer dated 12-2-1992 under which refund is due to the assessee. In this revised order, a copy of which has been furnished to us, no interest under section 217 has been charged. The ground therefore becomes infructuous and is dismissed. 8. In the result, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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