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TMI Blog2018 (7) TMI 955X X X X Extracts X X X X X X X X Extracts X X X X ..... hereof, if any. - Decided in favour of the appellant assessee Applicability of provisions of Section 80IA(9A) for assessment years 1997-98 and 1998-99 - Held that:- s held by the Supreme Court in DCIT Vs. Core Health Ltd.[2008 (2) TMI 8 - SUPREME COURT OF INDIA] that when a provision is introduced with effect from a particular date, then it would not have retrospective effect unless it is expressly stated to be so. In this case, sub-section 9A of Section 80IA of the Act was introduced w.e.f. 1st April, 1999. Thus, it cannot have retrospective effect to impact the assessment the subject Assessment Year 1997-98.- Decided in favour of the appellant assessee - Income Tax Appeal No. 802 of 2002 - - - Dated:- 13-7-2018 - M.S. SANKLECHA SANDEEP K. SHINDE, JJ. Mr. S. Sriram a/w Mr. Mayank Thosar i/b B.V. Jhaveri for the Appellant. Mr. Suresh Kumar for the Respondent. JUDGMENT : (Per M.S. Sanklecha, J.) 1. This Appeal under Section 260A of the Income Tax Act, 1961 (the Act) challenges the order dated 27.09.2007 passed by the Income Tax Appellate Tribunal (the Tribunal). 2. This Appeal was admitted on 16.03.2009 on the following substantial questions of law: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lusion was the reliance upon the decision of the Supreme Court in Escorts Ltd. v/s Union of India, 199 ITR 43, which dealt with the double claim for deduction under Section 32 and Section 35 of the Act. Thus, the Assessing Officer on the above basis by his order dated 31st August, 1999 restricted the claim to ₹ 87.96 lakhs as against ₹ 104.88 lakhs claimed under Section 80IA of the Act for Assessment Year 1997-98. 6. Being aggrieved with the order dated 31.08.1999 of the Assessing Officer, the Appellant preferred an Appeal to the Commissioner of Income Tax (Appeals) [CIT(A)]. This appeal was dismissed by an order dated 05.06.2000 of the CIT(A). This dismissal was by reliance upon the Apex Court decision in Escorts Ltd. (supra) to hold that if there is any doubt on the issue of double deduction, then the Parliament must clarify the law. It held that on the above basis the Parliament amended Section 80IA of the Act by introducing thereto by Finance (No.2) Act w.e.f. 1st April 1999. Therefore, although the amendment was effective from 1st April 1999, it has to be read as clarificatory / declaratory of the law as it was always existed. This on the basis that the Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of April, 1997] (such business being hereinafter referred to as the eligible business)], to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to the percentage specified in sub-section (5) and for such number of assessment years as it specified in sub-section (6). (2) to (8) ......... The Parliament amended Section 80IA of the Act by introducing sub-Section 9A therein by Finance (No.2) Act, 1998 w.e.f. 1st April, 1999, which reads as under : (9A) Where any amount of profits and gains of an industrial undertaking or of a hotel in case of an assessee is claimed and allowed under this section for (any) assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of tis Chapter under the heading CDeduction in respect of certain incomes , and shall in no case exceed the profits and gains of the undertaking or hotel, as the case may be. 9. Regarding Question No.(1): (a) It is an undisputed position before us that prior to 1st April, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of the same business outgoing; and if it is intended, it will be clearly expressed . In the light of the above observation, it is submitted that as the appellant had already claimed / availed deduction under Section 80HHC of the Act, the deduction under Section 80IA was restricted only to the balance amount of profits and gains available after deduction of the benefit claimed under Section 80HHC of the Act. This view of the Revenue was in accord with the Apex Court decision in Escorts Ltd. (supra) that no double deduction is permitted in the absence of the legislature specifically providing for the same. (d) We have considered the rival submissions. The decision of the Supreme Court in Escorts Ltd. (supra) has to be understood in the context of the facts arising before it for consideration. The assessee therein was claiming deduction of depreciation under Section 32 of the Act and also deduction under Section 35 of the Act which provided for 20% notional deduction in respect of the capital expenditure to be allowed for a period of 5 years incurred on scientific research innovation. In 1980, there was an amendment by Finance (No.2) Act, 1980 with retrospective effect fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iament decided to restrict the deduction under more than one section of Chapter VI Part C of the Act, it so provided for it. Attention was drawn to Section 80HH(9A) of the Act prohibiting deduction thereunder to the extent deduction is claimed under Section 80HHA of the Act. There is no such prohibition prior to the 1999 amendment in Section 80IA of the Act. The Revenue is seeking to add words to Section 80IA of the Act prior to 1998 amendment by restricting the deduction thereunder. It is a settled position that while interpreting a fiscal statute, it is not open to disregard the literal meaning thereof, in the absence of any ambiguity in the provision. It is not open to the Courts to add words in a fiscal legislation. In Sales Tax Commissioner Vs. Modi sugar Mills, (1961) AIR 1047 (S.C.), the Court has held In interpreting taxing statute equitable consideration are entirely out of place. Nor can taxing statue be interpreted on any presumptions or assumptions. The Court must look squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed; it cant imply anything which is not expressed; it cannot import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit of Section 80IA of the Act is available without exclusion of the deduction claimed under Section 80HHC of the Act. Even on being specifically asked, the Revenue was not able to inform us whether the above two decisions have been appealed to the Apex Court and the result thereof, if any. (h) In the above view, question no.(1) is answered in the negative i.e. in favour of the appellant assessee and against the respondent Revenue. 10. Regarding question no.(2): (a) In the present case, it is an undisputed fact that Sub-Section 9A of Section 80IA of the Act was introduced by Finance (No.2) Act, 1998 w.e.f. 1st April, 1999. Mr. Sriram, in support submits that the above amendment being prospective w.e.f. 1st April, 1999 cannot be applied to earlier periods as in this case. On the other hand, Mr. Suresh Kumar for the Revenue supports the impugned order of the Tribunal. (b) We note that the amendment by introduction of Sub-section 9A to Section 80IA of the Act is explicitly prospective w.e.f. 1st April, 1999. It is neither declaratory or clarificatory nor is it in the nature of explanation. Thus, strict reading of fiscal statute would prevent the amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead to be retrospective in effect, notwithstanding the fact that the Act of Parliament makes it prospective. (e) Further, attention was also drawn to the Central Board of Direct Taxes (CBDT) Circular dated 23rd December, 1998 explaining the amendments made by Finance (No.2) Act, 1998. This was the Act which introduced subsection 9A into Section 80IA of the Act. This CBDT Circular inter alia explained that the amendment to Section 80IA of the Act and specifically provides it will take effect from 1st April, 1999 and accordingly, apply in relation to Assessment Year 1999-2000 and subsequent assessment years. This CBDT circular is binding upon the Department as held by the Supreme Court in K.P. Varghese Vs. Income Tax Officer, 131 ITR 597 . In the above case, the Supreme Court had occasion to deal with the efficacy of the circular which has been issued while explaining the scope of the provisions of the Finance Act, 1964. The Apex Court observed that such circulars issued by the CBDT are binding upon the Revenue and the provisions would have to be read in the light of the Executive's understanding of the same. Further, the Apex Court in Union of India Vs. Aazadi Bachav Ando ..... X X X X Extracts X X X X X X X X Extracts X X X X
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