9911796707
TMI Blog1984 (10) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... the company as no notice under section 210 was issued by the department and, accordingly, the assessee-company was not obliged to file any statement of income under section 209A or any estimate in respect thereof, which may kindly be rectified and a revised order and a challan to this effect be issued. This will also affect the interest charged under section 139(8)." Evidently, there was no response from the ITO. Meanwhile, the assessee filed an appeal to the Commissioner (Appeals), contesting the assessment itself. One of the objections taken there was to the levy of the said interest under section 217. The Commissioner (Appeals) disposed of this particular objection as under : " 2. The second ground is against charging of interest under section 217. This interest has been charged in routine manner without taking into account the objections raised by the appellant in this regard. It is submitted that the charge of the interest is legally incorrect since this interest can be charged only if there is failure to comply with the provisions of section 209A. In this connection, no notice under section 210 was issued by the ITO, while the latest assessment was completed on a loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead with other relevant sections, e.g., section 207 to section 219 of the Act. (iii) The words ' income ' and ' total income ' used in section 209 and section 208 cannot mean ' loss '. These sections related to payment of advance tax and, hence, could not have dealt with loss cases. (iv) Similarly, the words ' the amount of advance tax payable by an assessee in the financial year ' used in section 209(1) have to be read with section 209(1)(a)(i), where the phrase ' his total income of the latest previous year in respect of which he has been assessed by way of regular assessment ', has been used. This phrase again would not refer to a ' loss '. The phrase refers only to a figure of positive income, if any, determined for any earlier previous year that happens to be the latest previous year of positive income. The latest previous year does not refer to the last assessed year but the last assessed year in which positive income has been assessed. (v) The above reading of sections 209 and 209A makes for a harmonious and meaningful result. Under such an interpretation, an assessee has the obligation to file a statement in accordance with section 209A. Such obligation would be on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... financial year in accordance with the provisions of sections 192 to 194, section 194A, section 194C, section 194D and section 195 on any income (as computed before allowing any deductions admissible under this Act) on which tax is required to be deducted under the said sections and which has been taken into account in computing the said total income ; (d) in cases where--- (i) the total income of the latest previous year being a year later than the previous year referred to in clause (a) on the basis of which fax has been paid by the assessee under section 140A exceeds the total income referred to in clause (a), or" " 209A. (1) Every person shall, in each financial year, on or before the date on which the first instalment, or where he has not previously been assessed by way of regular assessment under this Act, on or before the date on which the last instalment, of advance tax is due in his case under sub-section (1) of section 211, if his current income is likely to exceed the amount specified in sub-section (2) of section 208 send to the Income-tax Officer--- (a) where he has been previously assessed by way of regular assessment under this Act, a statement of advance tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were also non-residents) from interest and share in the aforesaid firm was being included in the assessee's total income under the provisions of section 16(3) [corresponding to section 64(1) of the 1961 Act]. For the assessment year 1958-59, there was a loss determined in the case of the firm. The ITO apportioned the loss (as the firm was registered) amongst the partners in the order passed in the case of the firm. Losses apportioned to the assessee's wife and the minor son were, however, not given set off in the assessment of the assessee, though such interest income from the firm was brought to tax. The Court held, that the term ' income ' was not defined in section 16(3) ; income may, in certain cases, include negative income, namely, loss but such a construction was not favoured by section 16(3). The section created an artificial liability. Hence, the section had to be read as carrying the concept of adding rather than subtracting, deducting or setting off. This decision was relied on for the revenue to contend before us that the concept of income cannot include loss. On the other hand, Shri R.K. Relhan, the authorised representative of the assessee, relied on the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 139, shall be carried forward and set off as laid down in the Act. On the other hand, the Act bristles with sanctions for compelling the filing of income returns. The thesis is : a loss is clearly distinguished as regards assessment from income and only as regards one explicit exception, the concept of income has been made to include a loss also, i.e., section 64, but for no other purpose. 11. Shri Kapila then goes on to the legislative intent behind the provisions relating to the advance tax. He submits that the central idea of these provisions is to collect the tax as and when the income is earned. This is an essential step for the protection of revenue and that is why the Legislature has fixed the base as the total income of the last completed assessment. To say that if the last completed assessment is on a loss, no advance tax need be paid, even if the current income is as high as Rs. 3,82,784 (this was the income returned by the assessee on 10-3-1980 for this year), would be to render the entire scheme of advance collection of tax unworkable. The submission is that statutory language should not be so construed as to make any part of the statute meaningless or in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He found it impossible to believe that the Legislature would have permitted a taxpayer with a huge income for the current year (as in this case) to go scot-free from paying even a rupee of advance tax. To permit such an interpretation of the relevant provision, was neither equitable nor in accord with commonsense and certainly not good law according to Shri Kapila. We agree that these considerations cannot be lightly brushed aside. But then what appeals to one as what should be the law and what the law is actually in terms of the statute, do not always coincide. That is why the Courts have repeatedly laid down that interpretation should not proceed upon subjective ideas of what is correct and what is not correct. Legislative intent is of importance no doubt, but such intent is most manifest in the words of the statute and it is to these words we will turn, to resolve the dispute before us. We have already referred to the phrase ' total income ' occurring in section 209(1)(a)(i)/209(1)(d)(i). There is not Much difficulty in understanding the term ' the latest previous year in which he has been assessed by way of regular assessment ', if that phrase stood by itself. In that event, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gative. In other cases, there is nothing to prevent the income from being negative, i.e., resulting in a net loss that can be set off against other income under section 70 et seq. Hence, where a case falls within section 23(2), i.e., where the house is in the occupation of the owner, it is possible to take a view that the deductions under sub-section (1) can exceed the income from the house property and convert the income into a negative figure." We have extracted the above passage for the purpose of showing that income is not such an invariably rigid concept under the Act as the departmental representative would have us believe. No doubt, there is a specific Explanation enacted in section 64 but it could be argued that the amendment was merely clarificatory and that it did not really carve out a new area for the concept of income ; especially so, in view of the Board's circular No. 20 of 1944 supra. 13. From the above discussion, whatever is clear or not clear, it is evident that the interpretation sought to be placed on the term ' total income ' by the assessee's authorised representative is also a reasonable interpretation. It was rightly pointed out for the assessee that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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