Interpretation of Words and Phrases of Taxing Statutes

Book Details

Chapter 1. Introduction
Foundational principle for a charge under Tax Statutes:	1
Purpose of Interpretation	1
Statute must be read as a whole	2
Sources of Rules	2
Particulars in a Statute	3
Tools in interpretation	4
Internal aids to construction vis-a-vis External aids to construction	7
Preliminary Steps before attempting to interpret a given statute:	8
Special Law Overrides General Law	9
Principles of Statutory Interpretation	10
A statute is either perpetual or temporary	17
Undefined words	19
Definitions in other statute	19
Plain Meaning Rule	20
Rules of Language	20
Judicially defined words	21
Chapter 2. Act
Which can we Regard as the special Act and which the General ?	23
When both the Acts show non-obstante clauses; therefore, the question which arises for consideration is which Act will prevail	24
Chapter 3. Amendment	26
Chapter 4. An Act to Amend and Consolidate the Law
Meaning of consolidation of the law	28
Objective of Income-tax Act, 1961	28
Chapter 5. Annul	29
Chapter 6. Bare Act
Literal Interpretation	32
Contents of Bare Act	32
Role of ‘Preamble’ in interpretation of statute	32
Examples of Bare Act	33
Chapter 7. Casus Omissus
The casus omissus cannot be supplied by the Courts	35
Supplying ‘casus omissus’ which was not permissible and could only have been done by the Supreme Court in an appropriate case	36
Casus omissus broadly refers to the principle that a matter which has not been provided in the statute but should have been there,cannot be supplied	36
Chapter 8. Caveat
Meaning of a Caveat	37
Content to Be included in a Caveat	37
Purpose of a Caveat	38
Where can a Caveat be Lodged?	38
Chapter 9. Charging Provision
Charging section should be strictly construed while the procedural sections should be liberally interpreted	40
Chapter 10. Circulars or Instructions
Nature of a CBDT circular can be summarised in the words of Hon’ble Supreme Court	42
Binding Nature of Circular/Instruction	43
Chapter 11. Clause
Clue to Identify whether a part of section is Clause or Sub-section	47
Chapter 12. Code	48
Chapter 13. Collegium
Dispute Resolution Panel (DRP) is an income-tax authority	50
Chapter 14. Cross-Examination
What is Cross-Examination?	51
Requests for cross-examination may be denied	51
Types of Evidence	52
Technical Rules of Evidence do not Apply to Income Tax Proceedings	52
Lack of cross-examination & violation of principle of natural justice	52
Chapter 15. Definition Clause (Interpretation)
Definitions in other statutes	68
Chapter 16. Deletion	69
Chapter 17. De Novo	70
Chapter 18. Derived From	72
Chapter 19. Dismiss
‘Appeal is Dismissed’	74
Dismissal of Appeal by Appellate Commissioner	74
“SLP Dismissed� :	74
SLP is Dismissed, however, the question of law is kept open	75
Chapter 20. Ejusdem Generis
Need for the Doctrine	77
Essentials of the Doctrine of Ejusdem Generis	78
Chapter 21. Error of Jurisdiction or Lack of Jurisdiction(Excessive Jurisdiction)
Nullity when occurs	80
Jurisdictional Error	81
Few Instances: Jurisdictional Error	81
Lack of Jurisdiction (Excessive Jurisdiction)	81
Few Instances: Lack of jurisdiction (excessive jurisdiction)	82
Chapter 22. Estoppels
Requirements of Promissory Estoppel	95
Conditions for application of Doctrine of Estoppel	96
Exceptions to Estoppel	96
Principles of estoppel not apply to Income Tax proceedings	96
Doctrine of Promissory Estoppel is not Applicable Against the State while Exercising its Legislative Power	97
Chapter 23. Exception
Exceptions & saving clauses	100
Chapter 24. Exemptions
Exemption Clause - Strict Construction	101
Chapter 25. Explanation
Object of an Explanation to a statutory provision	106
Chapter 26. For the Removal of Doubts
Clarificatory or Retrospective – who decides	110
Chapter 27. Full and True Disclosures
What is full and true Disclosure	111
What does full and true Disclosure mean	111
Chapter 28. Includes	113
Chapter 29. Income
Inclusion of all sorts of subsidies within ambit of ‘Income’ under Section 2(24) is not unconstitutional	115
Term “income� as defined in section 2(24) does not include “interest� referred to in section 56(2)(viii) or interest received in MACT award	116
Chapter 30. Income Tax Law	119
Chapter 31. Judicial Discipline
Assessing Officer is bound to follow High Court ruling given in assessee’s favour even if Department has filed SLP against the decision to Supreme Court	121
An order of High Court does not become inoperative merely because Department filed an appeal or SLP against it	121
Binding nature of order of another bench - Judicial discipline[Article 226]	122
Judicial discipline demands that subordinate authorities shall accept the decisions of Tribunal as binding precedent	122
Chapter 32. Judicial Precedents
Meaning of Precedent	124
Definition of Precedent	125
Origin of Precedent	125
Object of Doctrine of Precedent	125
Binding nature of Precedents	126
General Principles	126
Exception to the doctrine of Precedents, i.e., when Precedent ceases to be Binding	126
Legislative Amendment 128
Chapter 33. Law
Judges to Apply the Law	157
Meaning of Law	157
“LAW� Defined	158
Generally the term “law� is used to mean three things:	159
Origin of Law	159
Nature of Law	160
Functions of law	160
Rule of Law	161
Role of law in Business	161
Role of law in Society	161
Forbidden by Law mean:	162
Chapter 34. Literal Rule	158
Advantages of the Literal Rule	165
Dis-advantages of the Literal Rule	165
Chapter 35. Machinery Provision
While interpreting machinery provisions of a Taxing Statute Court should give effect to its Manifest purpose:	SC 167
Chapter 36. Mandatory or Directory
Difference between Mandatory and Directory provisions	170
Rules for determination of Mandatory and Directory Statute	172
Intention of the legislature:	172
Purpose behind the Statute:	172
Chapter 37. Marginal Notes
Definition of Marginal Notes:	176
Limitations of Marginal notes as internal aid to construction:	176
Chapter 38. May or Shall	179
Chapter 39. Means	181
Chapter 40. Mutatis Mutandis	183
Chapter 41. Natural Justice
Adjournments	185
Situations of violation of principles of natural justice in taxation laws	185
Rule against Bias	187
“Justice must not only be done, but must be seen to be done�	187
Right to Fair Hearing	188
Chapter 42. Non - Obstante Clauses
Non-obstante clause in Section 153A does not exclude Applicability of Reassessment Proceedings	204
Bombay High Court decodes Non Obstante Clause	204
Non-obstante clauses are not always to be regarded as Repealing Clauses nor as clauses which expressly or completely supersede any other Provision of the Law	207
Chapter 43. Nothing Contained In	208
Chapter 44. Notwithstanding Anything Contained In...
Distinction between the Expression ‘Subject to other provisions’ and the expression “Notwithstanding anything Contained in..�	211
Chapter 45. Obiter Dicta	212
Chapter 46. Omission	214
Chapter 47. Oral Order or Judgment
Oral and Written Judgments	218
What is a Judgment?	218
The term ‘Judgment’ has been defined under section 2(9) of the Civil Procedure Code as under:	218
Judges should speak through Judgements and Orders, not issue oral directions: Supreme Court	218
Chapter 48. Per Incuriam
A Decision is given per Incuriam when the Court has Acted	220
Tribunal has no Jurisdiction to hold that a Particular Decision of Jurisdictional High Court has been rendered per Incuriam or sub Silentio	222
The Proposition that a decision per Incuriam need not be followed as a Binding Precedent is Well-established	224
Chapter 49. Perversity
Perverse 225
Test and Benchmark of Perversity is Far Stringent and Strict	225
Chapter 50. Precedent
Doctrine of Precedent in India – a British Legacy	238
Pre-Independence	238
Post-Independence	238
Supreme Court	238
High Courts	238
Lower Courts	239
Precedents	239
Rules for Reading the Precedents	239
Circumstances that Weaken the Binding force of a Precedent	239
Precedent ceases to be a Binding Precedent	239
Circumstances Weakening the Binding force of Precedents	240
Constitutional provisions regarding precedents of the Supreme Court – Scope of Article 141	240
Use of Foreign Decisions	242

About the Author

Ram Dutt Sharma

Ram Dutt Sharma was born on 27th June, 1958 in Narnaul, Haryana. He got his post-graduation from M.D. University, Rohtak in 1980. He joined the Income-tax Department in the year 1983 and retired as Income Tax Officer on 30.06.2018. He worked at various stations of North-West Region of Income-tax Department. He has wide experience of all wings of Income-tax Department such as Assessment Unit, Special Range, TDS Wing, Investigation Wing, etc. He has been Contributing articles and addressing on topics relating to Income Tax at NADT Regional Campus, Chandigarh & Bhopal. He has also addressed number of seminars organized by the Income-tax Department, Chartered Accountants, Advocates and various Trade Associations.

He is recipient of first-ever Finance Minister's Award 2017, the Income Tax Departments highest honour for sustained devotion, commitment to duty & promoting excellence in the field of Direct Taxation at National Level. The Hon'ble Union Finance Minister, Shri ArunJaitley conferred this Finance Ministers Award for Excellence for his meritorious services at VigyanBhawan, New Delhi on 24.07.2017.

Awarded by Hon'ble Member (Revenue& TPS), CBT, Special Secretary to the Government of India Certificate of Appreciation for his contribution recognized and included in the chapter Miscellaneous Orders in Let Us Share A compilation of Best Practices & Orders Vol. VIII released on 31stOctober, 2016.

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