CBDT Circular 28/2016 –belated but beneficial for senior citizens- a pointer on attitude of un-necessary litigation by tax department on petty concessions also

[CA DEV KUMAR KOTHARI]

CBDT vide Circular 28/2016 dated the 27th of July, 2016

Prabhu Dayal Sesma vs. State of Rajasthan & another [1986 (8) TMI 443 - SUPREME COURT]

Recent Circular:

The CBDT vide Circular 28/2016 dated the 27th of July, 2016 have clarified that if a person is born on 1^st April of a previous year, then he can be considered to have attained particular age on 31^st March itself and not 1^st April of the next colander year. The Board has clarified this position in view of judgment of the Supreme Court which was reported long ago in the year 1948 (supra). 

Therefore a person born on 1^st April 2015  will attain age of one year on 31^st March 2016.

Common understanding and:

We celebrate birth day on date of birth. We say today we start a new year of life. That means we have already completed one more year and stepped into another year of life.

For a child born on say 1^st April 2015 birth day is celebrated on 1^st April 2016 and we say he / she has started second year of his life. At older age we also say, on date of birth one more year of life has lapsed and remaining years of life has reduced by one year.

Wishing ‘happy birth day’ at midnight of the birth date gone by is also common and in fashion amongst young people.

All these clearly shows that the  most common understanding is  that on birth day one start a new year of his life journey and  he has completed previous year on the midnight of a day preceding the date of birth.

Why doubt and confusion?

On this aspect there should not be a doubt or confusion. If a person particularly a senior citizen or very senior citizen born on 1^st April has claimed benefit on basis of 31^st March. How may such assesses would be there? And out of such assessee how many claimed benefit on such interpretation. How much revenue loss would be if benefit was allowed  based on 31^st March instead of insisting for waiting for 1^st April.

The benefit is a concession allowed to senior citizens, it should have been liberally considered by the tax authorities without raising a doubt or confusion. Even if two views are possible then a view in favour of assessee should have been adopted.

Doubts, confusions and then clarification by judicial pronouncements and Circular  clearly shows tendency of tax department is to litigate on petty issues. This is not good.

Supreme Court judgment relied on by the CBDT:

CBDT has relied on a judgment which was reported long ago in 1986 to clarify the above aspect. If there was no such judgment, perhaps CBDT would also have taken view that one will complete year on 1^st April. Because as per past history, we find that many circulars have been reason for more litigation. Courts have struck down many circulars and have not followed and allowed relief because the Circulars, many times were not  found in accordance with legislative sprit and intention.

Age of maturity:

The above Rule is also applicable for computing date of attaining majority. However, Board has not clarified on this angle. It would be proper to clarify  the same also.