9911796707
TMI Blog1983 (9) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... When the assessee was ' non-resident ' as per the provisions of the Act, he opened an account with Central Bank of India. The said account was a fixed deposit and was treated as non-resident (external) account as per the provisions of the Foreign Exchange Regulations Act, 1947. During the year under appeal, the assessee earned interest of Rs. 22,710 in the first year and Rs. 52,629 in the second year and claimed the same as exempt from taxation under the provisions of section 10(4A) of the Act. In respect of the assessment year 1977-78, the ITO accepted the assessee's contention while in respect of the assessment year 1978-79, he rejected the same. For the second year, namely, in the assessment year 1978-79, the ITO did not grant exemption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee on the fixed deposit was not exempt from taxation. The learned counsel for the assessee wanted to impress upon us that the very basis of the credibility of the Government was at stake, as according to him, it was unthinkable for the RBI to have issued notification/circulars without the consultation of the Income-tax Department. Relying on the following observations of the Hon'ble Gujarat High Court in the case of Taiyabji Lukmanji v. CIT [1981] 131 ITR 643 : "...Whether or not it amounted to promissory estoppel and created a legal right apart, the question was required to be examined from the standpoint of the credibility of the department. Would it not cause greater harm to the department itself if assessees who respond to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... just and proper to interpret section 10(4A) in such a manner so as to modify the hardship or injustice done to the assessee. Finally, relying on the decision of the Hon'ble Supreme Court in the case of Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh [1979] 118 ITR 326, the learned counsel for the assessee submitted that this is a fit case in which the doctrine of promissory estoppel should be invoked. He, therefore, urged the inclusion of the interest earned by the assessee on the non-resident (external) account should be deleted from its total income. 5. The learned representative for the revenue, on the other hand, strongly relied on the orders of the Commissioner as well as the AAC and justified their action. In this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er book of the assessee containing Circular No. 104 issued by the RBI, Exchange Control Department, he highlighted the fact that the said circular was issued for the guidance of the authorised dealers and not for the guidance of the people in general. It was, therefore, the duty of the assessee to have ascertained from the concerned relevant authority as to whether, even if it was not ' non-resident' under the Act, it would still be entitled to exemption under section 10(4A). He also invited our attention to the other circulars notifications issued by the RBI with a view to impress upon us that the RBI was issuing circulars not under the Act, but under the Foreign Exchange Regulations Act. Therefore, according to him, such circulars/notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ' in India. However, by virtue of section 6(6), he was also ' not ordinarily resident '. Therefore, once the assessee ceases to be ' non-resident ', the interest earned in its non-resident (external) account would cease to be exempt under section 10(4A). As regards the plea regarding hardship and injustice, we would simply refer to the decision of the Hon'ble Supreme Court in the case of Smt. Tarulata Shyam v. CIT [1977] 108 ITR 345. In that decision, the Supreme Court has held that when the provisions of law are clear and unambiguous, there is no scope for importing into the statute the words which are not there. Such importation would be not to construe, but to amend the statute. Even if, there be a casus omissus, the defect can be remed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n section 10(4A), by the Finance Act 1982, with effect from 1-4-1982. In order to complete this aspect of the matter, we reproduce below the relevant portion of the Notes on Clauses sent along with the Finance Bill, 1982, as well as Explanatory notes on the provisions of the Finance Act, 1982. Notes on Clauses " Clause 4 seeks to amend section 10 of the Income-tax Act. Sub-clause (a) seeks to substitute clause (4A) of the Income-tax Act. Under the existing provisions, any income from interest on moneys standing to the credit of a non-resident in a Non-resident (External) Account in any bank in India in accordance with the Foreign Exchange Regulations Act is exempt from income-tax. This provision applies to a non-resident as defined in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
