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TMI Blog1998 (11) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... 5B of the Income-tax Act, 1961, in respect of inspection fees. The assessee was having arrangement with certain parties who were provisionally qualified for the purpose of inspection of goods meant for export. The submission of the assessee was that under section 35B(1)(b)(ix) it was provided that weighted deduction was allowable on such export promotional activities as may be prescribed. Rules were framed and made effective from August 1, 1981, prescribing such activities. Inasmuch as the assessment proceedings had not yet achieved the finality as the appeal was pending before the Income-tax Appellate Tribunal when the rules came into force, the benefit of the rules was available to the assessee. It was also submitted that once the rule was framed the benefit thereof would be available to the assessee by reference to the date by which the main provision in the statute itself had existed. On behalf of the Revenue, it was submitted that rule 6AA came into force with effect from August 1, 1981 and, therefore, the assessee could not claim weighted deduction by relying on the rule for a period anterior to August 1, 1981, and retroactively extending its applicability thereto. The Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subject to the provisions of this section, be allowed a deduction of a sum equal to one and one-third times the amount of such expenditure incurred during the previous year : Provided that in respect of the expenditure incurred after the 28th day of February, 1973, by a domestic company, being a company in which the public are substantially interested, the provisions of this clause shall have effect as if for the words 'one and one-third times', the words 'one and one-half times' had been substituted. (b) The expenditure referred to in clause (a) is that incurred wholly and exclusively on---... (vi) furnishing to a person outside India samples or technical information for the promotion of the sale of such goods, services or facilities;... (ix) such other activities for the promotion of the sale outside India of such goods, services or facilities as may be prescribed." The provision has undergone changes from time to time. For our purposes it would suffice to note that section 35B was introduced into the body of the main Act by the Finance Act, 1968, with effect from April 1, 1968. The words "before the first day of March 1983", in section 35B(1)(a) were inserted by the Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the date of enactment of the rule. Parliament when it enacted sub-clause (ix) chose not to describe or specify the nature or character of the goods, services or facilities as would be covered by the said provision. The power was delegated to the rule-making authority. Parliament knew that the benefit of the provision would not be available to the claimant unless and until the description or nature and character of such goods, services or facilities was prescribed. The delegated power of legislation was not exercised until August 1, 1981. If the rule-making authority intended to confer the benefit thereof from a back date it would have said so specifically but it did not. It was not disputed at the Bar that rule 6AA has not been expressly given a retrospective operation. In CWT v. Sharvan Kumar Swarup and Sons [1994] 210 ITR 886 (SC), the following passage from Salmond on Jurisprudence has been quoted with approval : "The law of procedure may be defined as that branch of the law which governs the process of litigation. It is the law of actions---jusquod ad actiones pertinent---using the term action in a wide sense to include all legal proceedings, civil or criminal. All ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either be stretched wider nor squeezed narrowly with an eye on assumed or implied intention of the Legislature. In a fiscal law much scope for interpretative process is not available if the language of an enactment permits of no ambiguity. Parliament having specifically enumerated the categories of the expenditure entitled to weighted deduction by cataloguing the same as sub-clauses (i) to (viii) of clause (b), inserted a residuary entry by enacting sub-clause (ix). Sub-clause (ix) does not define any class by itself. It has been left to be prescribed subject to an overriding consideration that the activities to be prescribed in exercise of delegated legislative power must result in promotion of the sale outside India of goods, services or facilities. Sub-clause (ix) as enacted is a piece of conditional and delegated legislation both. Parliament having laid down the broad feature of "other activities", have left them to be enumerated by the executive. However, the availability of benefit under sub-clause (ix) is dependent on or conditioned by the same being prescribed. Unless the activities are prescribed in exercise of the delegated power of legislation, the sub-clause shall n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and explicit, and leaves no scope for any ambiguity, there is no scope for admitting an expenditure by way of inspection fee paid to a third party for weighted deduction. The laboratory or other facilities for quality control or inspection of goods has to be maintained by the assessee so as to fall within the scope of the provision. Question No. (iv) : The plea for admitting the expenditure by reference to sub-clause (vi) in the event of the same being excluded from sub-clause (ix) needs a short and summary disposal. An amount paid by way of inspection fee does not amount to furnishing to a person outside India technical information for the promotion of the sale of such goods, etc. We agree with learned senior standing counsel for the Revenue with his submission that the expenditure might have resulted in the sale of goods referable to a particular transaction but the expenditure cannot be said to have been incurred for the promotion of the sale of such goods. For the foregoing reasons, we are of the opinion that the Tribunal was not right in holding that rule 6AA of the Income-tax Rules, made effective from August 1, 1981, was applicable to the assessment year 1979-80 and w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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