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TMI Blog1983 (4) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... cular head and that, therefore, the Income-tax Officer was correct in restricting the rebate on donations in the hands of the applicant to 10% of the total income as reduced by the dividend income ? " The assessee in this case is a wholly owned subsidiary company of M/s. Indian Express Newspapers Bombay (Private) Ltd. For the assessment year 1966-67, corresponding to the previous year ended December 31, 1965, it submitted a return of income declaring Rs. 9,54,768 as the total income. The ITO, however, computed the total income at Rs. 14,49,874, being the income derived from interest on securities, house property, business, dividends, income from other sources and capital gains. While computing the total income, the ITO, inter alia, disallowed (1) expenditure on repairs of Rs. 8,208, (2) municipal tax of Rs. 20,436, and (3) ground rent of Rs. 5,447. The ITO disallowed the above three items following his finding given in the earlier assessment year 1965-66. On appeal, the AAC confirmed the ITO's order on the ground that the above items claimed related to house property let out and were considered under that head and, therefore, the assessee cannot have a real grievance in so far ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal, however, accepted the view of the AAC that the restriction under s. 88 of the Act does not refer to any income exempt from tax under any particular chapter and, therefore, the ITO's action is correct. As against that view of the Tribunal, question No. 3 has been raised. Thus question No. 3 involves the proper interpretation of s. 85A occurring in Chap. VII and s. 88 occurring in Chap. VIII of the Act. Under s. 85A where the total income of the assessee being a company included any income by way of dividend received by it from an Indian company, etc....the assessee shall be entitled to a deduction from income-tax with which it is chargeable on its total income for any assessment year of so much of the amount of income-tax calculated at the average rate of income-tax on the income so included (other than any such income on which no incometax is payable under the provision of this Act) as exceeds an amount of 25% thereof. Section 88(3), under which the rebate is admissible on donation, lays down that no deduction shall be made under sub-s. (1) in respect of any sums paid in excess of seven and a half per cent. of the assessee's total income as reduced by any portion thereof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. If the assessee's total income had already suffered a deduction, then it will clearly fall only under the second clause. But the second clause says that if a deduction of tax has been granted under any other provision of this Chapter then the benefit under s. 88 should be restricted to the limit prescribed under sub-s. (3). Admittedly, s. 85A does not fall within Chap. VIII in which s. 88 occurs and the expression " under any other provision of this chapter " cannot be equated to " under any provision of the Act ". When the statute specifically refers to a deduction granted under the provisions of Chap. VIII, it cannot be taken to refer to a deduction granted under the provisions of the other chapters. The learned counsel for the Revenue would contend that s. 85A has been wrongly included in Chap. VII dealing with " incomes forming part of total income on which no tax is payable " and it should have been properly included in Chap. VIII dealing with " relief in respect of incometax ", that the fact that the Legislature has wrongly included s. 85A in Chap. VII instead of in Chap. VIII the object of the provision in s. 88(3) cannot be overlooked and that, therefore, even though s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also relied on by the learned counsel for the Revenue. In that case there is a general discussion as to how a statute is to be construed which is as follows (p.164 of [1949] 2 All ER) : " Whenever a statute comes up for consideration it must be remembered that it is not within human powers to foresee the manifold sets of facts which may arise, and, even if it were, it is not possible to provide for them in terms free from all ambiguity. The English language is not an instrument of mathematical precision. Our literature would be much the poorer if it were. This is where the draftsmen of Acts of Parliament have often been unfairly criticised. A judge, believing himself to be fettered by the supposed rule that he must look to the language and nothing else, laments that the draftsmen have not provided for this or that, or have been guilty of some or other ambiguity. It would certainly save the judges trouble if Acts of Parliament were drafted with divine prescience and perfect clarity. In the absence of it, when a defect appears, a judge cannot simply fold his hands and blame the draftsman. He must set to work on the constructive task of finding the intention of Parliament, and he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e must adhere closely to the language of the Act. If there is ambiguity in the terms of a provision, recourse must naturally be had to well-established principles of construction but it is not permissible first to create an artificial ambiguity and then try to resolve the ambiguity by resort to some general principle. " and the following rules of construction adumbrated by Rowlatt J. in Cape Brandy Syndicate v. IRC [1921]l K.B. 64 (KB), which holds the field (p. 71): " In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used. " In approving the said statement of law laid down by Rowlatt J., the Supreme Court has added (in CIT v. Shahzada Nand Sons [1966] 60 ITR 392, 400): "To this may be added a rider; in a case of reasonable doubt the construction most beneficial to the subject is to be adopted. But even so, the fundamental rule of construction is the same for all statutes, whether fiscal or otherwise. The underlying principle is that the meaning and intention of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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