Forms prescribed under main enactment cannot curtail provisions of main enactment

[CA DEV KUMAR KOTHARI]

COMMISSIONER OF INCOME TAX VERSUS TULSYAN NEC LTD. [2010 (12) TMI 23 - SUPREME COURT]

Earlier article by author:

Deficiencies in ITR form should not prevent assesse from preferring legal claims. An Article By: - CA DEV KUMAR KOTHARI November 6, 2019

In earlier article some important aspects of general Rules were discussed in detail with some judgments in specific circumstances.

The scope of present article is about Forms, and law laid down by the Supreme court of India.

Main legislation or enactment:

Main enactment that is Act is primary law and Rules and forms are prescribed as per authority and sanction given in main enactment.

For example, Income-tax Act,1961 is main enactment, and Income- tax Rules,1962 are subordinate legislation.

Rules and Forms:

For carrying out the main enactment, some Rules are prescribed and in the Rules some forms are also prescribed. Prescription of forms is to ensure standard formats for compilation of information and data and submission of the same in standard formats.

Non applicable items or modifications:

In any form we can find notes like strike out any item which is not applicable. In some forms some modifications are also prescribed whereby one can mention notes and remarks for clarification.

 In case of e-forms non applicable items may be marked as not applicable or value zero can be placed as per design in which software is developed. 

Situations requiring adjustments or furnishing information in residuary category or by furnishing letters etc.

In case of forms if some of situations are not taken care and provision is not made for computation or compilation of information in standard format, one may face a situation in which some modification is to be made. In case of electronic formats, if modification is not possible or there is no scope of providing information and making claim by insertion of data in some residuary category or any field in which it is permissible to mention description and make a claim of unspecified items, then situation may arise in which a claim has to be made in physical document to be submitted as additional document for consideration of concerned authority. This can be by way of letter or petition etc. as the circumstances require.

Rule or Form cannot impose additional burden or deny relief:

Rules and forms have to be in accordance with main law. These cannot curtail rights, benefits or advantages admissible under law due to lacking in Rules and / or prescribe forms.  Rules and Forms also cannot impose additional burden, which is not contemplated in main enactment.

Supreme Court’s ruling:

In COMMISSIONER OF INCOME TAX VERSUS TULSYAN NEC LTD. [2010 (12) TMI 23 - SUPREME COURT] it was held as follows, vide paragraph 13  which is  reproduced below with highlights added by author:

           13. Lastly, it is immaterial that the relevant form prescribed under Income Tax Rules, at the relevant time (i.e. before 1.4.2007), provided for set off of MAT credit balance against the amount of tax plus interest i.e. after the computation of interest under Section 234B. This was directly contrary to a plain reading of Section 115JAA(4). Further, a form prescribed under the rules can never have any effect on the interpretation or operation of the parent statute.

Unquote:

As can be noticed in above ruling, the Form of Return was not in accordance with provisions and therefore a claim was to be made in some other manner or in modified form ( at that time ITR was filed physically, so one could mention his claim suitably by writing in ITR forms).

In the e-filing of ITR and other returns we face situations which are not taken care by the prescribed forms, therefore, suitable modifications have to be made. For example , in some situations depreciation is to be claimed through computation sheet of Business  profit instead of the depreciation schedule e.g. in case of assesse engaged in cultivation and manufacture of  tea and rubber. In case any incentive is to be claimed as not deductible from WDV, it has to be claimed through computation of profit instead of depreciation schedule. In case any provision is not applicable, computation for the same has to be modified so that Zero is derived at to claim non-applicability of that provision.

Therefore, if a standard form is not suitable and cannot suitably be modified to make some peculiar claims, then either the claim is to be made in some other section or by way of computation or extra sheets to be enclosed with other documents like annual report or tax audit report to put the claim with explanation.