Supreme Court of India
COMMISSIONER OF INCOME TAXversusM/S. ALOM EXTRUSIONS LIMITED
- Citation
- 2009 INSC 1261
- Decided
- 25 November 2009
- Disposal
- Disposed off
- Bench
- S H KAPADIA
Holding
The deletion of the second proviso to Section 43‑B by the Finance Act, 2003 is a curative amendment and therefore operates retrospectively from 1 April 1988.
Summary
The case concerned whether employers could claim a deduction under Section 43‑B of the Income Tax Act, 1961 for contributions to provident or welfare funds that were paid after the statutory due date but before filing the income‑tax return. The Finance Act, 2003 deleted the second proviso of Section 43‑B and amended the first proviso to treat such contributions like tax, duty, cess or fee for deduction purposes. The issue was whether this deletion operated only prospectively from 1 April 2004 or retrospectively from 1 April 1988 when the first proviso was introduced. The Supreme Court examined the scheme of the Act, the purpose of the non‑obstante clause, and prior case law, concluding that the amendment was curative and therefore retrospective. Consequently, the Court held that the Finance Act, 2003 applies retrospectively from 1 April 1988, allowing the assessees to claim the deduction. The appeals filed by the Revenue were dismissed and the assessees' appeals were allowed.
Issues considered
- Whether the deletion of the second proviso to Section 43‑B by the Finance Act, 2003 operates prospectively from 1 April 2004
- Whether the same deletion operates retrospectively from 1 April 1988
- Whether the Finance Act, 2003 amendment is curative or amendatory in nature
Legislation cited
- Finance Act, 1983
- Finance Act, 1988
- Finance Act, 1989
- Finance Act, 2003
- Income Tax Act, 1961s. 2(24), s. 2(24)(x), s. 28, s. 36, s. 43-B
Subjects
Income TaxSection 43-BDeductionProvident Fund contributionsRetrospective legislationCurative amendmentFinance Act 2003Tax deduction timingNon-obstante clause
Judgment
[2009) 15 (ADDL.) S.C.R. 1154
A COMMISSIONER OF INCOME TAX
v. ,.....
M/S. ALOM EXTRUSIONS LIMITED
(Civil Appeal No. 7771 of 2009)
NOVEMBER 25, 2009
B
[S.H. KAPADIA AND H.L. DATTU, JJ.]
c
Income Tax Act, 1961 - s. 43-8 second proviso -
Payment made by employer towards contribution to provident
fund or any other welfare fund allowable as deduction, if paid
before date for filing return of income - Omission/deletion of
~ -
second proviso w.e.f. 01.04.2004 by Finance Act, 2003 -
Effect of - Held: Amendment of s. 438 is curative in nature -
Finance Act, 2003 deleted the second proviso and brought
D about uniformity in first proviso by equating tax, duty, cess and
fee with contributions to welfare funds of employee - Hence,
is retrospective and would operate w.e.f. 01.04.1988-when first
proviso came to be inserted - Finance Act, 2003.
)<-
-
The question which arose for consideration in these
E appeals is whether omission/deletion of the second
proviso to section 43-B of the Income Tax Act, 1961, by
the Finance Act, 2003, operated with effect from 1st April,
2004, or whether it operated retrospectively with effect
from 1st April, 1988? ,...._
F
Dismissing the appeals by the Revenue, and allowing
the appeals by the assessees, the Court
HELD: 1.1. Section 43-B [main section] of the the ..;-
Income Tax Act, 1961, which stood inserted by Finance
G Act, 1983, with effect from 1st April, 1984, expressly
commences with a non-obstante clause, the underlying
object being to disallow deductions claimed merely by
making _a Book entry based on Merchantile System of
,.
H 1154
COMMISSIONER OF INCOME TAX v. ALOM 1155
EXTRUSIONS LIMITED
Accounting. At the same time, section 43-B [main section] A
,....,.,. made it mandatory for the Department to grant deduction
in computing the income under section 28 in the year in
which tax, duty, cess, etc., is actually paid. However, the
Parliament took cognizance of the fact that accounting
year of a company did not always tally with the due dates B
under the Provident Fund Act, Municipal Corporation Act
[octroi] and other Tax laws. Therefore, by way of first
proviso, an incentive/relaxation was sought to be given
in respect of tax, duty, cess or fee by explicitly stating that
~
if such tax, duty, cess or fee is paid before the date of c
:filing of the Return under the Income Tax Act [due date],
the assessee(s) then would be entitled to deduction.
However, this relaxation/incentive was restricted only to
tax, d,Uty, cess and fee. It did not apply to contributions
to labour weifcfre funds. The reason appears to be that
.. D
..,.. the employer(s) should not sit on the collected
contributions and deprive the workmen of the rightful
J benefits under Social Welfare legislations by delaying
payment of contributions to the welfare funds. However,
the second proviso resulted in implementation problems, E
which resulted in the enactment of Finance Act, 2003,
deleting the second proviso and bringing about
uniformity in the first proviso by equating tax, duty, cess
...LJ. and fee with contributions· to welfare funds. Once this
uniformity is brought about in the first proviso, then, the F
Finance Act, 2003, which is made applicable by the
Parliament only with effect from 1st April, 2004, would
become curative ~n nature; hence, it would apply
~- retrospectively with effect from 1st April, 1988. [Para 15]
[1163-D-H; 1164-A-D] G
1.2. In the instant case, the respondents deposited
the contributions with the R.P.F.C. after 31st March [end
of accounting year] but before filing of the Returns under
the Income Tax Act and the date of payment fell after the
H
1156 SUPREME COURT REPORTS [2009] 15 (ADDL.) S.C.R.
A due date under the Employees' Provident1Fund Act, they
would be denied deduction for all times.! In view of the
i._.r..
second proviso, which stood on the statute book at the
relevant time, each of such assessee(s) would not be
entitled to deduction under section 43-8 of the Act for all
B times. They would lose the benefit of deduction even in ...
the year of account in which they pay the contributions
to the welfare funds, whereas a defaulter, who fails to pay
the contribution to the welfare fund right upto 1st April,
-2004, and who pays the contribution after 1st April, 2004,
c would get the benefit of deduction under Section 43-8 of .+
the Act. Therefore, Finance Act, 2003, should be read as
retros_pective. It would, therefore, operate from 1st April,
1988, when the first proviso was introduced. The
Parliament has explicitly stated that Finance Act, 2003,
D will operate with effect_ from 1st April, 2004. [Para 15]
[1165-F-H; 1166-A·C]
1.3. The intention is to be found out from the
'f
..
language used by the legislature and if strict literal
construction leads to an absurd result i.e., a result not
E intended to be subserved by the object of the legislation,
then if another construction is possible apart from strict
literal construction, then that construction should be
preferred to the strict literal construction. The Finance
Act, 2003 is curative in nature, hence, it is retrospective ~--
F and it would operate with effect from 1st April, 1988 [when
the first proviso came to be inserted]. There is no merit
in this batch of civil appeals filed by the Department and
are dismissed. The impugned judgment and order of the
High Court is set aside and the civil appeals filed by the +
G assessees are allowed. [Paras 16, 17 and 19] [1166-D-H;
1167!'8-C]
Allied Motors (P) Limited vs. Commissionerof Income
Tax 1997 (224) l.T.R~ 677; Commissioner of Income Tax,
H
COMMISSIONER OF INCOME TAX v. ALOM 1157
EXTRUSIONS LIMITED
Bangalore vs. J.H. Got/a 1985 (156) l.T.R. 323, relied on. A
Case Law Reference :
1997 (224) l.T.R. 677 Relied on. Para 15
1985 (156) l.T.R. 323 Relied on. Para 16 B
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
7771 of 2009.
From the Judgment & Order dated 15.5.2006 of the High C
Court of Calcutta in ITA No. 22 of 2006.
WITH
C.A. Nos. 7770, 7765, l769, 7767, 7756, 7766, 7763, 7764,
7758, 7762, 7755, 7757, 7760, 7754, 7759, 7768 & 7761 of D
. 2009 .
Gopal Subramanium, SG, V. Sekhar, T.L.V. Iyer, Arijit
Prasad, D.K. Singh, Rupesh Kumar, Rahul Kaushik, B.V.
Balaram Das, Vijayalakshmi Menon, Rohit Chudhary, Preeti E
Khiwani, R. Santhanam, Rajendra Singhvi, Brij Bhusan, K.V.
Vijayakumar, Preetesh Kapur, Radha Rangaswamy, R.K.
Raghavan, K.V. Mohan, R. Chandrachud, K.R. Sasiprabhu, Dr.
Rakesh Gupta, Ambhoj Kumar Sinha, Aarti Saini, Poonam
Ahuja for the appearing parties. F
The Judgment of the Court was delivered by
S.H. KAPADIA, J.
Civil Appeal No.7771/2009, Civil Appeal No.7770/2009, G
Civil Appeal No.7765/2009, Civil Appeal No.7769/2009,
~, Civil Appeal No.7767/2009, Civil Appeal No.7756/2009,
Civil Appeal No.7766/2009, Civil Appeal No.7763/2009,
Civil Appeal No.7764/2009, Civil Appeal No.7758/2009,
H
1158 SUPREME COURT REPORTS [2009] 15 (ADDL.) S.C.R.
A Civil Appeal No.7762/2009, Civil Appeal No.7760/2009,
Civil Appeal No.7754/2009, Civil Appeal No.7759/2009,
Civil Appeal No.7768/2009 and Civil Appeal No.7761/2009.
1. Delay condoned.
B
2. Leave granted.
3. A short question which arises for determination in this
batch of civil appeals is: whether omission [deletion] of the
second proviso to Section 43-B of the Income Tax Act, 1961,
C by the Finance Act, 2003, operated with effect from 1st April,
2004, or whether it operated retrospectively with effect from 1st
April, 1988?
4. Prior to Finance Act, 2003, the second proviso to
D Section 43-B of the Income Tax Act, 1961 [for short, "the Act"]
restricted the deduction in respect of any sum payable by an
employer by way of contribution to provident fund/
superannuation fund or any other fund for the welfare of
employees, unless it stood paid within the specified due date.
E According to the second proviso, the payment made by the
employer towards contribution to provident fund or any other
welfare fund was allowable.as deduction, if paid before the date
for filing the Return of income and necessary evidence of such
payment was enclosed with the Return of income. In other
F words, if contribution stood paid after the date for filing of the
Return, it stood disallowed. This resulted in great hardship to
the employers. They represented to the Government about their
hardship and, consequently, pursuant to the Report of the Kelkar
Committee, the Government introduced Finance Act, 2003, by
G which the second proviso stood deleted with effect from 1st
April, 2004, and certain changes were also made in the first
proviso by which uniformity was brought about between
payment of fees, taxes, cess, etc., on one hand and contribution
made to Employees' Provident Fu.nd, etc., on the other.
H
COMMISSIONER OF INCOME TAX v. ALOM 1159
EXTRUSIONS LIMITED [S.H. KAPADIA, J.)
5. According to the Department, the omission of the A
--""" second proviso giving relief to the assessee(s) [employer(s)]
operated only with effect from 1st April, 2004, whereas,
according to the assessee(s)-employer(s), the said Finance
Act, 2003, to the extent indicated above, operated with effect
from 1st April, 1988 [retrospectively]. 8
6. The lead matter in this batch of civil appeals is
Commissioner of Income Tax vs. Mis. A/om Extrusions
Limited [civil appeal arising out of S.L.P. (C) No.23851 of
-+-
2007).
c
7. Prior to the amendment of Section 43-B of the Act, vide
Finance Act, 2003, the two provisos to Section 43-B of the Act
read as under:
"Provided that nothing contained in this section shall apply D
. 1 in relation to any sum referred to in clause (a) or clause
(c) or clause (d) or clause (e) or clause (f), which is actually
paid by the assessee on or before the due date applicable
in his case for furnishing the return of income under sub-
section (1) of section 139 in respect of the previous year
E
in which the liability to pay such sum was incurred as
aforesaid and the evidence of such payment is furnished
by the assessee along with such return.
;
~
Provided further that no deduction shall, in respect
of any sum referred to in clause (b), be allowed unless F
such sum has actually been paid in cash or by issue of a
cheque or draft or by any other mode on or before the due
date as defined in the Explanation below clause (va) of
sub-section (1) of section 36, and where such payment has
been made otherwise than in cash, the sum has been G
realized within fifteen days from the due date."
_..)(
8. By Finance Act, 2003, the second proviso to Section
43-B of the Act not only got deleted but the said Finance Act,
2003, also amended the first proviso with effect from
H.
•
1160 SUPREME COURT REPORTS [2009] 15 (ADDL.) S.C.R.
A Assessment Year 2004-2005. We quote hereinbelow the first
proviso to Section 43-B of the Act after its amendment by ,)....-
Finance Act, 2003, which reads as under:
"Provided that nothing contained in this section shall apply
B in relation to any sum which is actually paid by the
assessee on or before the due date applicable in his case
for furnishing the return of income under sub- section (1)
of section 139 in respect of the previous year in which the
liability to pay such sum was incurred as aforesaid and the
~.
evidence of such payment is furnished by the assessee
c along with such return."
9. To answer the above controversy, we need to
understand the Scheme of the Income Tax Act, 1961, as it
existed prior to 1st April, 1984, and as it stood after 1st April,
D 1984.
·~
10. "Income" has been defined under Section 2(24) of the
Act to include profits and gains. Under Section 2(24)(x), any
sum received by the assessee from his employees as
i
contributions to provident fund/superannuation fund or any fund
:E
s~t up under Employees' State Insurance Act, 1948, or any
other fund for welfare of such employees constituted income.
This is the reason why every assessee(s) [employer(s)] was
entitled to deduction ·even prior to 1st April, 1984, on -'·
Merchantile System of Accounting as a business expenditure
F
by making provision in his Books of Accounts in that regard. In
other words, if an assessee(s)-employer(s) is maintaining his
books on Accrual System of Accounting, even after collecting
the contribution from his employee(s) and even without remitting
the amount to the Regional Provident Fund Commissioner
G [R.P.F.C.], the assessee(s) would be entitled to deduction as
business expense by merely making a provision to that effect
in his Boo.ks of Accounts. The same situation arose prior to 1st
April, 1984, in the context of assessees collecting sales tax and
Other indfrect taxes from their·respective customers and
H claiming deduction only by making provision in their Books
COMMISSIONER OF INCOME TAX v. ALOM 1161
EXTRUSIONS LIMITED [S.H. KAPADIA, J.]
without actually remitting the amount to the exchequer. To curb A
,-_-'\ this practice, Section 43-B was inserted with effect from 1st
April, 1984, by which the Merchantile System of Accounting with
regard to tax, duty and contribution to welfare funds stood
discontinued and, under Section 43-B, it became mandatory
for the assessee(s) to account for the afore-stated items not B
on Merchantile basis but on cash basis. This situation
continued between 1st April, 1984, and 1st April, 1988, when
the Parliament amended Section 43-B and inserted first proviso
'
' to Section 43-B. By this first proviso, it was, inter alia, laid
_..
down, in the context of any sum payable by the assessee(s) c
by way of tax, duty, cess or fee, that if an assessee(s) pays such
tax, duty, cess or fee even after the closing of the accounting
year but before the date of filing of the Return of income under
Section 139(1) of the Act, the assessee(s) would be entitled
to deduction under Section 43-B on actual payment basis and
D
. such deduction would be admissible for the accounting year.
This proviso, however, di.d not apply to the contribution made
by the assessee(s) to the labour welfare funds. To this effect,
first proviso stood introduced with effect from 1st April, 1988.
11. Vide Finance Act. 1988, the second proviso came to E
be inserted. It reads as follows:
"Provided further that no deduction shall, in respect of any
~ sum referred to in clause (b), be allowed unless such sum
,,,,. has actually been paid during the previous year on or
F
before the due date as defined in the Explanation below
clause (va) of sub-section (1) of section 36."
12. At this stage, we also quote hereinbelow the
Explanation below clause (va) of sub-section (1) of Section 36:
G
"Explanation.-- For the purposes of this clause, 'due date'
means the date by which the assessee is required as an
employer to credit an employee's contribution to the
employee's account in the relevant fund under any Act, rule,
order or notification issued thereunder or under any H
1162 SUPREME COURT REPORTS [2009] 15 (ADDL.) S.C.R.
A standing order, award, contract of service or otherwise."
13. However, the second proviso stood further amended )-.("..,
vide Finance Act, 1989, with effect from 1st April, 1989, which
reads as under:
8 "Provided further that no deduction shall, in respect of any
sum referred to in clause (b), be allowed unless such sum
has actually been paid in cash or by issue of a cheque or
draft or by any other mode on or before the due date as
'
~
defined in the Explanation below clause (va) of sub- '
section (1) of section 36, and where such payment has
been made otherwise than in cash, the sum has been
realised within fifteen days from the due date."
14. On reading the above provisions, it becomes clear that
0 the assessee(s)-employer(s) would be entitled to deduction only
if the contribution stands credited on or before the due date
given in the Provident Fund Act. However, the second proviso
once again created further difficulties. In many of the
·Companies, financial year ended on 31st March, which did not
E coincide with the accounting period of R.P.F.C. For example,
·in many cases, the time to make contribution to R.P.F.C. ended
after due date for filing of Returns. Therefore, the industry once
again made representation to the Ministry of Finance and,
taking cognizance of this difficulty, the Parliament inserted one
more amendment vide Finance Act, 2003, which, as stated
F above, came into force with effect from 1st April, 2004. In other
words, after 1st April, 2004, two changes were made, namely,
deletion of the second proviso and further amendment ir ihe-
first proviso, quoted above. By the Finance Act, 2003, the
amendment made in the first proviso equated in tr;.ns of the
G benefit of deduction of tax, duty, cess and fee on the one hand
with contributions to Employees' Provident Fund,
superannuation fund and other welfare funds on the other.
However, the Finance Act, 2003, bringing about this uniformity
came into force with effect from 1st April, 2004. Therefore, the
H argument of the assessee(s) is that the Finance Act, 2003, was
COMMISSIONER OF INCOME TAX v. ALOM 1163
EXTRUSIONS LIMITED [S.H. KAPADIA, J.]
curative in nature, it was not amendatory and, therefore, it A
-....... applied retrospectively from 1st April, 1988, whereas the
argument of the Department was that Finance Act, 2003, was
amendatory and it applied prospectively, particularly when the
Parliament had expressly made the Finance Act, 2003,
applicable only with effect from 1st April, 2004. It was also B
argued on behalf of the Department that even between 1st April,
.. _j
1988, and 1st April, 2004, Parliament had maintained a clear
dichotomy between payment of tax, duty, cess or fee on one
hand and payment of contributions to the welfare funds on the
other. According to the Dep~rtment, that dichotomy continued
upto 1st April, 2004, hence, looking to this aspect, the
c
Parliament consciously kept that dichotomy alive upto 1st April,
2004, by making Finance Act, 2003, come into force only with
effect from 1st April, 2004. Hence, according to the
Department, Finance Act, 2003 should be read as amendatory
D
and not as curative [retrospective] with effect from 1st April,
.... '1f
1988.
15. We find no merit in these civil appeals filed by the
Department for the following reasons: firstly, as stated above,
Section 43-B [main section], which stood inserted by Finance E
Act, 1983, with effect from 1st April, 1984, expressly
commences with a non-obstante clause, the underlying object
being to disallow deductions claimed merely by making a Book
"-<_J
entry based on Merchantile System of Accounting. At the same
time, Section 43-B [main section] made it mandatory for the F
Department to grant deduction in computing the income under
Section 28 in the year in which tax, duty, cess, etc., is actuaily
paid. However, Parliament took cognizance of the fact that
accounting year of a company did not always tally with the due
dates under the Provident Fund Act, Municipal Corporation Act G
[octroij and other Tax laws. Therefore, by way of first proviso,
~)( an incentive/relaxation was sought to be given in respect of tax,
duty, cess or fee by explicitly stating that if such tax, duty, cess
or fee is paid before the date of filing of the Return under the
Income Tax Act [due date], the assessee(s) then would be
H
1164 SUPREME COURT REPORTS (2009] 15 (ADDL.) S.C.R.
A entitled to deduction. However, this relaxation/incentive was
restricted only to tax, duty, cess and fee. It did not apply to ~
contributions to labour welfare funds. The reason appears to
be that the employer(s) should not sit on the collected
contributions and deprive the workmen of the rightful benefits
B under Social Welfare legislations by delaying payment of
contributions to the welfare funds. However, as stated above,
the second proviso resulted in implementation problems, which
have been mentioned hereinabove, and which resulted in the
enactment of Finance Act, 2003, deleting the second proviso
,l
and bringing about uniformity in the first proviso by equating tax,
c duty, cess and fee with contributions to welfare funds. Once this
uniformity is brought about in the first proviso, then, in our view,
the Finance Act, 2003, which is made applicable by the
Parliament only with effect from 1st April, 2004, would become
curative in nature, hence, it would apply retrospectively with
D
effect from 1st April, 1988. Secondly, it may be noted that, in
".'(
the case of Allied Motors (P) Limited vs. Commissioner of
Income Tax, reported in [1997) 224 l.T.R.677, the Scheme of
Section 43-8 of the Act came to be examined. In that case, the
question which arose for determination was, whether sales tax
E collected by the assessee and paid after the end of the relevant
previous year but within the time allowed under the relevant
Sales Tax law should be disallowed under Section 43-B of the
Act while c;;omputing the business income of the previous year?
j._/
That was a case which related to Assessment Year 1984-1985.
F The relevant accounting period ended on June 30, 1983. The '
"-
Income Tax Officer disallowed the deduction claimed by the
assessee which was on account of sales tax collected by the
assessee for the last quarter of the relevant accounting ye::>::.
The deduction was disallowed under Section 43-B which, as
G stated above, was inserted with effect fro:;, 1st Aprii, 1984. It
is also relevant to note that the first provisu which came into
force with effect from 1st April, 1988 was not on the statute
book when the as~essments were made in the case of Allied
Motors (P) Limited (supra). However, the assessee contended
H that even though the first proviso came to be inserted with effect
COMMISSIONER OF INCOME TAX v. ALOM 1165
EXTRUSIONS LIMITED [S.H. KAPADIA, J.]
from 1st April, 1988, it was entitled to the benefit of that proviso A
-. ......__
because it operated retrospectively from 1st April, 1984, when
Section 43-B stood inserted. This is how the question of
retrospectivity arose in Allied Motors (P) Limited (supra). This
Court, in Allied Motors (P) Limited (supra) held that when a
proviso is inserted to remedy unintended consequences and B
to make the section workable, a proviso which supplies an
obvious omission in the section and which proviso is required
to be read into the section to give the section a reasonable
~
interpretation, it could be read retrospective in operation,
particularly to give effect to the section as a whole. Accordingly, c
this Court, in Allied Motors (P) Limited (supra), held that the
first proviso was curative in nature, hence, retrospective in
operation with effect from 1st April, 1988. It is important to note
once again that, by Finance Act, 2003, not only the second
proviso is deleted but even the first proviso is sought to be
D
~
amended by bringing about an uniformity in tax, duty, cess and
fee on the one hand vis-a-vis contributions to welfare funds of
employee(s) on the other. This is one more reason why we hold
that the Finance Act, 2003, is retrospective in operation.
Moreover, the judgement in Allied Motors (P) Limited (supra)
is delivered by a Bench of three learned Judges, which is E
binding on us. Accordingly, we hold that Finance Act, 2003, will
operate retrospectively with effect from 1st April, 1988 [when
A the first proviso stood inserted]. Lastly, we may point out the
-- hardship and the invidious discrimination which would be
caused to the assessee(s) if the contention of tRe1)epartment F
is to be accepted that Finance Act, 2003, to the above extent,
operated prospectively. Take an example - in the present case,
the respondents have deposited the contributions with the
R.P.F.C. after 31st March [end of accounting year] but before
filing of the Returns under the Income Tax Act and the date of G
payment falls after the due date under the Employees' Provident
Fund Act, they will be denied deduction for all times. In view of
the second proviso, which stood on the statute book at the
relevant time, each of such assessee(s) would not be entitled
to deduction under Section 43-B of the Act for all times. They H
1166 SUPREME COURT REPORTS [2009) 15 (ADDL.) S.C.R.
A would lose the benefit of deduction even in the year of account
in which they pay the contributions to the welfare funds, whereas
a defaulter, who fails to pay the contribution to the welfare fund
right upto 1st April, 2004, and who pays the contribution after
1st April, 2004, would get the benefit of deduction under
B Section 43-8 of the Act. In our view, therefore, Finance Act,
2003, to the extent indicated above, should be read as
retrospective. It would, therefore, operate from 1st April, 1988,
when the first proviso was introduced. It is true that the
Parliament has explicitly stated that Finance Act, 2003, will
...__
c operate with effect from 1st April, 2004. However, the· matter
before us involves the principle of construction to be placed on
the provisions of Finance Act, 2003.
16. Before concluding, we extract hereinbelow the relevant
observations of this Court in the case of Commissioner of
D Income Tax, Bangalore vs. J.H. Got/a, reported in [1985) 156
l.T.R. 323, which reads as under: ~
"We should find out the intention from the language used
by the Legislature and if strict literal construction leads to
E an absurd result, i.e., a result not intended to be subserved
by the object of the legislation found in the manner
indicated before, then if another construction is possible
.
apart from strict literal construction, then that construction
should be preferred to the strict literal construction. Though ....._
F equity and taxation are often strangers, attempts should be
made that these do not remain always so and if a
construction results in equity rather than in injustice, then
such construction should be preferred to the literai
construction."
G 17. For the afore-stated reasons, we hold that Finance Act,
2003, to the extent indicated above, is curative in nature, hence,
it is retrospective and it would operate with effect from 1st April,
1988 [when the first proviso came to be inserted]. For the above
reasons, we find no merit in this batch of civil appeals filed by
H
COMMISSIONER OF INCOME TAX v. ALOM 1167
EXTRUSIONS LIMITED [S.H. KAPADIA, J.]
the Department which are hereby dismissed with no order as A
to costs.
Civil Appeal No.7755/2009 @ S.L.P. (C) No.20581/2008
and Civil Appeal No.7757/2009@ S.L.P. (C) No.18380/
2009: B
18. Leave granted.
19. In view of our judgement in the case of Commissioner
of Income Tax vs. Mis. A/om Extrusions Limited [civil appeal
arising out of S.L.P. (C) No.23851 of 2007], we set aside the C
impugned judgement and order of the Bombay High Court and
allow these civil appeals filed by the assessees with no order
as to costs.
N.J. Appeals disposed of.
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