Preliminary

Kanga & Palkhivala: The Law and Practice of Income Tax 11th ed / Kanga & Palkhivala: The Law
and Practice of Income Tax, 11th ed / S. 1. Short title, extent and commencement
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Kanga & Palkhivala: The Law and Practice of Income Tax 11th ed / Kanga & Palkhivala: The Law and Practice of Income Tax, 11th ed / S. 1. Short title, extent and commencement
THE INCOME-TAX ACT, 1961

CHAPTER I Preliminary
S. 1. Short title, extent and commencement
This Act may be called the Income-tax Act, 1961.
(2) It extends to the whole of India.
(3) Save as otherwise provided in this Act, it shall come into force on the 1st day of April, 1962.
1. The Old Act and the New Act.—

The Income-tax Act, 1961 received the assent of the President on September 13, 1961, and came into force on April 1, 1962. It is
based on the recommendations contained in the Law Commission's Twelfth Report (1958) and the Direct Taxes Administration
Enquiry Committee's Report (1959). It replaced the Indian Income-tax Act, 1922 which had remained in operation for forty years.
The corresponding provisions, if any, of the 1922 Act are noted at the beginning of the commentary on every section of this Act.
Disquietingly enough, the endless stream of amendments, which had left the 1922 Act shapeless and orderless, has engulfed the
present Act to the point where its original purpose of ensuring stability and simplicity has been wholly frustrated. Within the fifty
years of its operation the present Act has been amended more than a thousand times.
Unfortunately, the counter-productive consequences of several amendments have never been examined. The sad reality is that
major amendments are made without any debate in Parliament and whatever is drafted by the executive becomes a law without
any examination of its economic and legal impact. To give one example, exemption from Income-tax was granted to units set up
in Special Economic Zones (SEZs) which was to continue for about ten years. Without any concern for sanctity of a legislative
promise, the Finance Act, 2011 has amended the Income-tax Act and the SEZ Act to levy Minimum Alternate Tax (MAT) on units
in SEZs. The other regrettable feature is the repeated resort to retrospective amendments to nullify any adverse decision of the
Income-tax Appellate Tribunal, the High Courts or the Supreme Court. In the end, the assessee is always short-changed. If he
succeeds before the Tribunal or the courts, his happiness and success is set at naught by a retrospective amendment that is made
with no concern as to how the taxes are going to be paid by the assessee.
2. History of Income-tax Act.—

Income-tax was first introduced in 1860 in India by Sir James Wilson to meet the financial difficulties that arose due to the Mutiny
of 1857 and the law was in force for about five years. Thereafter, taxes were levied in different forms. During 1867, 'license tax'
was imposed on trade and professions and in 1868 'certificate tax', which was similar to that of license tax, was introduced.
However, during 1869 a regular income-tax was announced but was again abolished after five years as the financial situations
had improved by then. Once again, in 1877, 'license tax' was introduced along with land cess. In addition to the above, local
legislations were also introduced to meet the needs of presidency towns.1.
In 1886, for the first time, a legislation for the levy of tax was introduced. In 1918, it was reintroduced with many changes to
overcome inequalities of previous Act and six heads of taxation were introduced for the very first time. At present, we have only
five heads of taxation.
After the recommendations of the All India Income-tax Committee, the Indian Income-tax Act, 1922 Act was introduced which
was then replaced by the present Income-tax Act, 1961.
The 1961 Act, received the assent of the President on September 13, 1961, and came into force from April 1, 1962.2. It was based
on the recommendations contained in the Law Commission's Twelfth Report (1958) and the Direct Taxes Administration Enquiry
Committee's Report (1959). It replaced the Income-tax Act, 1922 which had remained in operation for forty years.
3. Direct Taxes Code, 2012.—

While presenting the Budget for 2011, the Finance Minister reiterated the decision to go ahead and introduce the Direct Taxes
Code to replace the 1961 Act. The Statement of Objects and Reasons, inter alia, states as follows:
"… As a resu lt o f all th ese amen dmen ts, th e b asic stru ctu re o f In co me-tax Act h as b een o ver b u rden ed an d its lan gu age h as b eco me
co mp lex. Tax Admin istrato rs, acco u n tan ts an d tax p ayers h ave raised co n cern s ab o u t th e co mp lex stru ctu re o f th e In co me-tax Act. In
p articu lar, th e n u mero u s amen dmen ts h ave ren dered th e Act difficu lt to decip h er b y th e average tax p ayer. Th e W ealth Tax Act, 1957, h as
also w itn essed amen dmen ts. Th e Go vern men t, th erefo re, decided to revise, co n so lidate an d simp lify th e lan gu age an d stru ctu re o f th e
direct tax law s… "3.
It is difficult to believe that such statements could have been made solemnly and seriously. Who is responsible for the making the
law complex and incomprehensible? The supreme irony was that the Direct Taxes Code Bill neither consolidated nor simplified the
language and structure of the direct taxes laws. The Code, consisting of 319 sections and 22 schedules, was as complex and over-
burdened as the 1961 Act. It will be impossible for the tax administration to resist the temptation to repeatedly amend the new
Code in the same manner as it mutilated the 1961 Act. Briefly, the Code was a substantial reproduction of the old Act and
represented a colossal waste of public money. One example is sufficient to indicate the sheer agony that await the tax payer. The
Code contained 297 definitions and these were in addition to the definitions given to various other expressions in individual
sections!
In the 1961 Act, the fault was not with the law but with its implementation. Massive tax evasion went unchecked and, indeed, was
indirectly encouraged by periodic settlement schemes that gave tax evaders an option of declaring unaccounted income with
immunity from prosecution. Such settlement schemes generate disrespect for the law. In the last 50 years, virtually no large
business house or influential individual assessee has been punished or sent to jail for tax evasion. The same fate awaits any new
tax legislation as it will also be subject to numerous amendments and tax evasion will continue with impunity. And, as long as
there are absurd revenue targets, outrageous tax demands will continue.
In the previous edition, we had expressed that the Code does not replace the present Act. Fortunately, our hopes prevailed over
the will of the Legislature and the Code was shelved.
4. New Tax Legislation: Code and Task Force.—

Our obsession with forming a new Direct Tax Code manifested once again in the Annual Tax Officers' Conference in September,
2017, where the Prime Minister observed that the Income-tax Act, 1961 is more than fifty years old and needed to be redrafted.
The Ministry of Finance then constituted a 'Task Force' to draft an appropriate tax legislation keeping in view the following: (i)
direct tax systems prevalent in various countries; (ii) international best practices; (iii) economic needs of the country; and (iv) any
other matter connected thereto.4. The Task Force was to submit the new legislation within six months but there was no new
Code. Thereafter, the Task Force was re-constituted and its terms of reference were further expanded to include: (i) faceless
assessments, (ii) mechanism for system-based cross verification of the financial transactions, (iii) reduction in litigation, (iv)
reduction in compliance burden and simplification of procedures, and (v) sharing of information between other departments of
revenue, ie GST, Customs, CBDT, FIU.5. The Task Force submitted its report along with a new draft legislation of the Income-tax
Act to the Finance Minister on August 19, 2019. However, neither the Report nor the new draft legislation been made public. Will
the new draft law meet the same fate as the earlier DTC? Such exercise, in any event, only represents colossal waste of public
money and creates more uncertainties. As we go to press, there is no official information about the new legislation and it is
unlikely that it will be implemented any time soon. It is submitted that the only tax reform necessary is to simplify the present Act,
rather than create a new legislation.
THE INCOME-TAX ACT AND THE CONSTITUTION OF INDIA

The power to tax is an incident of sovereignty;6. and since the Constitution of India is the supreme law of the land, all other laws,
including the Income-tax Act, are subordinate to the Constitution and must be read and interpreted in the light of the
constitutional provisions.7. In India Cements Ltd v State of Tamil Nadu ,8. a seven-judge bench of the Supreme Court observed
that the Constitution is 'the mechanism under which the laws are to be made and not merely an Act which declares what the law
is to be'. One of the most important provisions of the Constitution relating to taxation is art 265, which provides: 'No tax shall be
levied or collected except by authority of law.' Therefore, not only the levy but also the collection of a tax must be under the
authority of some law. 9. 'Law', in this article, means law enacted by a competent legislature and cannot include an executive
order,10. or a rule without express statutory authority,11. or a custom.12. Thus, any act of the state that seeks to impose a tax
without legislative authority will be void.
Article 366(28) defines 'taxation'. In its widest sense, "tax" includes all money raised by taxation. And 'tax on income' is defined
under art 366(29) and includes a tax in the nature of an excess profits tax. These definitions are important and relevant in respect
of entry 82 of List I, read with arts 245 and 246, which confers power on the Parliament to impose taxes on income.
5. Legislative Entries in the Constitution.—
The Constitution of India contemplates a threefold distribution of legislative powers between the Union and the States. The
authority to legislate is conferred by art 246,13. which provides for three legislative lists that find place in the Seventh Schedule of
the Constitution. These are:
(i) List I or the Union List, which comprises of entries over which the Union has exclusive power of legislation;
(ii) List II or the State List, which comprises of entries over which the state legislatures have exclusive power of legislation;
(iii) List III or the Concurrent List, which gives concurrent powers of legislation to the Union and the states.
If a State law relating to an entry in List III is repugnant to a Union law relating to that entry, the Union law will prevail, and the
state law shall, to the extent of such repugnancy, be void. 14. The various entries in the three Lists of the Seventh Schedule are not
'powers' of legislation but 'fields' of legislation or legislative heads designed to define and de-limit the respective areas of
legislative competence of the state and the union legislatures.15.
The subject matters of taxation available to Parliament are enumerated in entries 82 to 97 of List I, those available to the state
legislature in entries 45 to 68 of List II, and those available to both in entry 44 of List III.16. The Parliament also has residuary
powers of taxation under art 248(2) and entry 97, List I.17. The Income-tax Act, 1961 has been passed under entry 82 of List I,18.
which is: 'Taxes on income other than agricultural income'. [See further below under 'Competence of the legislature to levy tax'.]19.
6. Constitutional validity of provisions.—

In order that the law imposing the tax is regarded as constitutionally valid, it must first be examined whether the legislature that
passed the law was competent to pass it or not; secondly, since a taxing statute is a law for the purpose of art 13, its validity can
also be challenged on the ground that it contravenes any of the fundamental rights guaranteed by Part III of the Constitution.20.
Statutes relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of
speech, freedom of religion, etc. As regards economic and other regulatory legislation, it is imperative that the court exercises
judicial restraint and grants greater latitude to the Legislature whilst judging the constitutional validity of such a statute.21. Yet,
unless and until the Supreme Court or a High Court declares any provision to be ultra vires, it must be taken to be
constitutionally valid and treated as such.22.
Further, there is always a presumption in favour of the constitutionality of a statute and the burden is upon him who attacks it to
show that there has been a clear transgression of the constitutional principles.23. He must make specific, clear and unambiguous
averments to show how the impugned statute is unconstitutional.24. If two views are possible, one making the statute
constitutional and the other making it unconstitutional, the former view must always be preferred.25.
(a) Competence of the Legislature to Levy Tax.—
It is the duty of the courts to ascertain to what degree and to what extent the authority to levy tax exists in each legislature and
to define the limits of the respective legislative powers.26. Once a law in 'pith and substance' falls within a legislative entry,
incidental encroachment on an entry in another list does not affect its validity.27. Further, there is no rule that an enactment must
relate to only one entry in the Seventh Schedule; in the case of a Parliamentary enactment, it may relate to more than one entry
in List I and to an entry or entries in List III.28.
It is well settled that the language of the entries should be given the widest scope and the most liberal construction should be
put upon the words.29. Each general word should be held to extend to all ancillary or subsidiary matters which can fairly and
reasonably be comprehended in it and, in interpreting an entry it would not be reasonable to import any limitation by comparing
or contrasting that entry with any other one in the same list.30. At the same time, it is quite important that the three Lists should
be read together harmoniously. 31. Any legislation with regard to subjects enumerated in the State List are excluded from
Parliament's competence; everything else is within the Parliament's competence.32. However, Parliament is not competent to
effect amendments to international instruments.33.
Consistent with the above principles, the word 'income' occurring in entry 82 should be construed liberally and in a very wide
manner and the power to legislate will take in all incidental and ancillary matters.34. Thus, this entry should be read not only as
authorising the imposition of a tax but also as authorising an enactment to prevent evasion of tax35. or to provide for taxation on
a presumptive basis36. or to provide for a vicarious liability.37.
I n Federation of Hotel and Restaurant Association of India v UOI,38. a Constitution Bench of the Supreme Court has
exhaustively considered the question of legislative competence with regard to levy of tax.
(b) Fundamental Rights.—

Article 14 provides that the state shall not deny to any person equality before the law or the equal protection of the laws within
the territory of India. In Jagannath Baksh Singh v State of UP,39. and Venugopala Varma v UOI ,40. the Supreme Court, while
laying down the principles to be applied in determining whether a taxing statute violates the fundamental rights, ruled that a
taxing statute can be held to contravene art 14 if it purports to impose on the same class of persons or property similarly situated
an incidence of taxation that leads to obvious inequality. 41. The combined effect of these two decisions is to lay down, inter alia,
the following basic propositions:
(i) it is for the legislature to determine the objects on which tax shall be levied, and the rates thereof;
(ii) the courts will not strike down an Act as denying the equal protection of laws merely because other objects could have been,
but are not, taxed by the legislature; for a state does not have to tax everything in order to tax something;
(iii) the legislature is competent to classify persons or properties into different categories and tax them differently, and if the
classification thus made is rational, the taxing statute cannot be challenged merely because different rates of taxation are
prescribed for different categories of persons or objects; and
(iv) if any taxing statute is found to contravene art 14, it would be open to courts to strike it down as denying to the citizens the
equality before the law guaranteed by that article.
Article 14 does not insist that all persons must be taxed equally or that the legislative classification must be scientifically perfect or
logically complete.42. Article 14 forbids class legislation; it does not forbid reasonable classification of persons, objects and
transactions by the Legislature for the purpose of achieving specific ends.43. It is also well settled by a plethora of judgments that
in a taxing statute, the legislature enjoys much greater latitude for selection of subjects of taxation as also for classification and
that the legislative dispensations are based on an interaction of diverse economic, social and policy considerations.44. The
economic wisdom of a tax is within the exclusive province of the legislature45. and questioning the legislative policy is beyond the
domain of the judiciary. The tests of the vice of discrimination in a taxing law are, accordingly, less rigorous.46. In order, however,
to pass the test of permissible classification, two conditions must still be fulfilled:
(i) the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped
together from others left out of the group; and
(ii) the differentia must have a rational relation to the object sought to be achieved by the statute.47.
The classification must not be 'arbitrary, artificial or evasive' but must be based on some real and substantial distinction bearing a
just and reasonable relation to the object sought to be achieved by the legislature.48. The classification between Central and State
Government employees on the one hand and employees of public and private sector undertakings on the other for determining
the value of accommodation is reasonable and not arbitrary.49.
In examining the allegations of a hostile discrimination, what is looked into is not the phraseology, but the real effect of the
provision.50. Thus, for instance, a discriminatory exemption provision51. or a statute conferring an arbitrary power52. may be held
to be ultra viresart 14, but a mere possibility of abuse of power would not render a provision unconstitutional.53. The court would
also not ordinarily interfere with the choice of the legislature in matters pertaining to the mode and manner of recovery of
taxes.54.
Apart from art 14, challenges to the constitutional validity of taxing statutes have been based on art 19(1)(g), which provides that
all citizens shall have the right to practice any profession, or to carry on any occupation, trade or business. This article is, however,
subject to
art 19(6), which permits the imposition of reasonable restrictions on the exercise of this right 'in the interest of the general public'.
Therefore, any such reasonable restriction in the interest of the general public would be saved by cl (6) of art 19;55. but not a
restriction that is unreasonable.56. In the case of Federation of Hotel and Restaurant Association of India,57. the Supreme Court
observed:
A taxin g statu te is n o t, p er se, a restrictio n o f th e freedo m u n der art 19(1)(g). Th e p o licy o f a tax, in its effectu atio n , migh t, o f co u rse, b rin g
in so me h ardsh ip in so me in dividu al cases. Bu t th at is in evitab le… Every cau se, it is said, h as its martyrs. Th en again , th e mere excessiven ess
o f a tax o r even th e circu mstan ce th at its imp o sitio n migh t ten d to w ards th e dimin u tio n o f th e earn in gs o r p ro fits o f th e p erso n s o f
in ciden ce do es n o t, p er se, an d w ith o u t mo re, co n stitu te vio latio n o f th e righ ts u n der art 19(1)(g).
In tax matters, neither any equity nor hardship can be a ground to challenge constitutional validity.58.
Further, any restraint intended to curb the chances and opportunities to use or create black money should not be regarded as
curtailing the freedom of trade or business.59.
Further, the Parliament has the power to levy tax retrospectively, provided it is reasonable and in public interest to do so.60. In
Ramkrishna v State of Bihar,61. the Supreme Court dealt with the question of retrospective operation of a taxing statute violating
the fundamental rights. A provision can be said to be illegal if its retrospective operation is in order to over-come the decision of
the Tribunal, and at the same time, arbitrary for depriving the benefit earlier granted to a class of assessees.62. Where the purpose
of an amendment to a statute is to correct a judicial interpretation of a prior law, which the legislature considers inaccurate, the
effect is prospective. Any other result would make the legislature a court of last resort.63.
In Ujjambai v State of UP,64. a majority of the Supreme Court held that an order of assessment passed within jurisdiction and
under a valid law cannot be regarded as violating the fundamental rights merely because it proceeds upon a misconstruction of
the statute; therefore the validity of such an order cannot be challenged in a petition to the Supreme Court under art 32 of the
Constitution, though it may be challenged in a petition to the High Court under art 226. Moreover, a fundamental right being in
the nature of a prohibition addressed to the state, an individual cannot waive it.65.
(c) Doctrine of Reading Down.—
The theory of 'reading down' is a rule of interpretation resorted to by the courts when a provision, read literally, seems to offend a
fundamental right, or falls outside the competence of the particular legislature; reading down a provision is per-missible as a part
of the judicial process.66. This doctrine can be resorted to in giving the statute reasonable meaning and making it constitutionally
valid.67. It has the principal effect that, where an Act is expressed in language of a generality which makes it capable, if read
literally, of applying to matters beyond the relevant legislative power, the court will construe it in a more limited sense so as to
keep it within its power.68.
The rule of reading down a provision of law is a rule of harmonious construction in a different name which is resorted to
smoothen the crudities or iron out the creases found in a statute to make it workable. The rule of reading down is used for the
limited purpose of making a provision workable and to bring it in harmony with other provisions of the statute. The rule is used
keeping in view the scheme of the statute and to fulfill its purposes.69.
7. Constitutional Remedies and Writs.—

An aggrieved party has a right to approach the Supreme Court under art 32, which itself is a fundamental right, or a High Court
under art 226, for an appropriate writ, direction or order. These are extraordinary and high prerogative remedies. While art 32 can
be invoked only against a contravention of a fundamental right, art 226 can be invoked not only for enforcement of a
fundamental rights but also "for any other purpose". The power of judicial review over legislative action vested in the Supreme
Court under art 32 and in the High Courts under art 226 is an integral and essential feature of the Constitution, constituting a
part of its 'basic structure'.70.
Under art 226 of the Constitution, the High Court has the power to issue not only writs of certiorari, prohibition and mandamus,
but also other writs, directions and orders. In other words, even if the case is one in which a high prerogative writ proper as
known in England cannot be issued, the Indian High Courts have jurisdiction to issue such directions and orders as may be
necessary to meet the ends of justice, in respect of both administrative action and judicial or quasi-judicial action.71. Similar
powers to issue writs, directions and orders are conferred on the Supreme Court under art 32 of the Constitution, but they are
restricted to the enforcement of Fundamental Rights mentioned in Part III.
(a) Scope and Jurisdiction.—
A writ is issued only in exercise of the supervisory jurisdiction of the High Courts under art 226 and not under their appellate
jurisdiction. The Courts generally will not entertain writ petitions under art 226 when an efficacious, alternative remedy is
available, although this is a rule of self-imposed limitation. It is essentially a rule of policy, convenience and discretion rather than
a rule of law. Undoubtedly, it is within the discretion of the High Court to grant relief under art 226 despite the existence of an
alternative remedy. However, the High Court must not interfere if there is an adequate efficacious alternative remedy available to
the petitioner and he has approached the High Court without availing the same unless he has made out an exceptional case
warranting such interference or there exist sufficient grounds to invoke the extraordinary jurisdiction under art 226.72. The power
and jurisdiction of a High Court under art 226 is extraordinary and is to be used sparingly.73. The scope and extent of the writ
jurisdiction of the Supreme Court and the High Courts is a topic that is outside the scope of this commentary. It would be
impossible to deal with such a topic adequately and briefly. Therefore, the commentary is restricted to a short discussion on
important principles and reference is made only to cases where the courts have interfered or declined to interfere in matters
arising under the tax laws.74.
While exercising its writ jurisdiction, the court cannot undertake determination of disputed questions of fact.75. The writ court can
only consider whether an action is valid; it cannot consider the sufficiency or correctness of the material relied upon by the
assessing authority.76. Similarly, the High Court will not investigate sufficiency of reasons for an action in a writ petition.77.
The court will interfere by a writ if the action is mala fide or arbitrary or does not comply with the statutory requirements,78. or if
the action amounts to merely an exercise in futility79. or when the finding is perverse or capricious or is prima facie erroneous.80.
The fact that an inappropriate writ has been asked for is not a ground for refusing to grant appropriate relief.81.
A writ will not ordinarily be issued by the court where the impugned order, not patently erroneous, is made by an authority
within his jurisdiction.82. A writ petition should generally not be entertained at the show-cause stage83. unless an exceptional case
is made out84. e.g., the approach of the authority is erroneous in law.85.
The question of the constitutional validity or vires of a provision of the Act has been held by the Supreme Court to be foreign to
the jurisdiction of authorities appointed under this Act, and therefore, such questions can be decided only in a suit or a writ
petition.86.
The power of High Court does not get enlarged because no appeal is provided against such order; the court cannot substitute its
own conclusion even if a different conclusion were possible.1. The High Court is entitled to review its order passed in a writ
petition.2. But a second writ petition challenging the same order on the same or different grounds would not normally be
entertained.3. Dismissal of a writ petition by the High Court on merits—whether after contest, or without notice to the other side
but by a speaking order, bars a petition to the Supreme Court under art 32; and the only remedy of the petitioner is to appeal
against the order of dismissal.4.
(b) Articles 32 and 226.—

The five writs referred to in arts 32 and 226 are:
(i) Mandamus.—
Mandamus is a judicial remedy which is in the form of an order from the Supreme Court or a High Court to any government,
court, public authority or public corporation to do or to forbear from doing some specific act which that body is obliged under law
to do or refrain from doing, and which is in the nature of a public duty and in certain cases of a statutory duty.
Usually, the writ is issued to compel the income-tax authorities to perform their statutory duties5. or to refund money wrongfully
recovered from the petitioner. 6. A writ of mandamus cannot be issued to an authority to pass an order in violation of a statutory
provision.7. The writ is granted only in cases where there is statutory duty imposed upon the officer and there is failure on the
part of the officer to discharge that statutory obligation. The idea of this writ is to compel the performance of public duties
prescribed by law, and acts as a check on the officers who are performing those duties to act within the limits of their
jurisdiction.8.
Where an order is quashed by the court for a reason other than want of fundamental jurisdiction, in appropriate cases, the court
may direct the authority concerned to pass a fresh order. 9. Similarly, if there is an omission to exercise the discretion on account
of failure on the part of the authority to genuinely examine the matter before it, a writ of mandamus can be issued directing such
authority to rehear the matter and determine it afresh according to law.10.
(ii) Prohibition.—
A writ of prohibition is an order directed to an inferior court or authority forbidding it from continuing with a proceeding on the
ground that the proceeding is without or in excess of jurisdiction or contrary to the laws of the land.11. The High Court may issue
a writ of prohibition to prohibit the income-tax authorities from acting in excess of their jurisdiction.12.
This writ is issued at the threshold, usually at the stage of the issue of the show cause notice itself, and before the adjudication is
complete. Thus, if the show cause notice initiates proceedings which are without jurisdiction13. in violation of the principles of
natural justice,14. in excess of jurisdiction,15. without regard to the relevant provisions of law, 16. a writ of prohibition will lie to
prohibit the adjudicating authority from proceeding with the show cause notice.
This writ will be issued only when there is a patent and total want of jurisdiction, and not otherwise.17. It is similar to the writ of
certiorari in that both writs seek to prevent inferior courts and tribunals from usurping jurisdiction. But prohibition will be issued
to forbid the court or Tribunal to continue the proceedings. Certiorari will lie only when the order has been passed and will be
issued to quash such an order.
A writ of prohibition or mandamus may be issued to restrain recovery proceedings in pursuance of an assessment order made
without or in excess of jurisdiction,18. even if such a plea as to jurisdiction was not raised in the assessment proceedings.19. The
plea of alternate remedy is not usually a bar to the writ of prohibition.20.
(iii) Certiorari.—
A writ of certiorari is an order issued to an inferior court or authority exercising judicial or quasi-judicial functions to investigate
and decide the legality and the validity of the orders passed by that court or authority.21. The difference between a writ of
prohibition and a writ of certiorari is that while a writ of prohibition is preventive and is used before a decision is made by the
inferior court or authority, a writ of certiorari is corrective or remedial and is used after the decision has been made.
A writ of certiorari will be issued against both judicial and quasi-judicial authorities if they act without jurisdiction,22. or in excess
of their legal authority, 23. or illegally assume jurisdiction by erroneous interpretation,24. or in patent misconstruction of a tariff
entry,25. or in violation of the principles of natural justice,26. on in a perverse and unreasonable manner,27. or without application
of mind,28. or discriminate between one importer and another in matters of classification, 'or where there is a clear error of law
apparent on the face of the record in the matter of classification'29. and to interfere if there is a miscarriage of justice.30.
The writ is issued only in exercise of the supervisory jurisdiction and not under the appellate jurisdiction. Thus, the findings of the
inferior courts cannot be re-opened in a petition for writ of certiorari.
The courts will refuse to interfere if the assessee:
i. has an adequate alternate remedy,

ii. is responsible for delay (laches),
iii. is responsible for unbecoming conduct,31.
iv. if the case involves disputed question of facts,32.

v. filed the petition prematurely.
(iv) Quo Warranto.—

A writ of quo warranto ('what is your authority') is a judicial remedy against an occupier or usurper of an independent substantive
public office, franchise or liberty. It controls appointments to public offices and also protects a citizen from being deprived of a
public office to which he may have a right.33.
(v) Habeas Corpus.—

The writ of habeas corpus is a writ in the nature of an order calling upon the person who has detained another to produce the
latter before the court, in order to let the court know on what ground he has been confined and to set him free if there is no legal
justification for the imprisonment.34.
(c) Discretionary Power: Not a Bar – Alternative Efficacious Remedy.—

Article 226 confers a very wide powers in the matter of issuing writs by the High Court, the remedy of writ absolutely
discretionary in character. If the High Court is satisfied that the aggrieved party can have an adequate or suitable relief elsewhere,
it can refuse to exercise its jurisdiction. This will not apply when question raised requires determination of competence of the
Union or the State to levy the tax.35. The question whether a provision is ultra vires the Constitution is foreign to the jurisdiction
of Tribunals and tax authorities.36.
If the statute provides for hierarchy of appeals, the party must ordinarily exhaust the statutory remedies before resorting to writ
jurisdiction.37. The High Court does not, therefore, act as a court of appeal against the decision of a court or tribunal, to correct
errors of fact, and does not by assuming jurisdiction under art 226 trench upon an alternative remedy provided by statute for
obtaining relief. Therefore, where it is open to the aggrieved petitioner to move another tribunal, or even the High Court itself in
another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not entertain a
petition under art 226 and allow the machinery created under a statute to be bypassed, but will direct the party resort to the
appeal or other machinery so set up.38. It has been also held by the Supreme Court39. that the jurisdiction of the High Court
under art 226—or for that matter, the jurisdiction of the Supreme Court under art 32—is concerned, it is obvious that the
provisions of the Act cannot bar and curtail these remedies. It is, however, equally obvious that while exercising the power under
arts 226 or 32, the Court would certainly take note of the legislative intent manifested in the provisions of the Act and would
exercise their jurisdiction consistent with the provisions of the enactment.40. This is more so when a revenue statute provides for a
person aggrieved by an assessment thereunder, a particular remedy to be sought in a particular forum, in a particular way, it
must be sought in that forum and in that manner, and all the other fora and modes of seeking remedy are excluded.41.
Nevertheless, the Supreme Court42. has recognized some exceptions to the rule of alternative remedy, i.e., where the statutory
authority has not acted in accordance with the provisions of the enactment in question, or acted wholly without jurisdiction or
lack of jurisdiction, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions
which are repealed, or when an order has been passed in total violation of the principles of natural justice.43. Once the High Court
exercises its jurisdiction and entertained the writ petition, its decision cannot be set aside on such technical grounds.44.
The rejection of a writ petition on the ground of an adequate alternative remedy is not based on a rule of law but as a matter of
practice. These are limitations imposed by the courts them-selves in exercise of their jurisdiction. The existence of an alternative
remedy is not an absolute bar to the issue of a writ of certiorari;45. and a writ of mandamus would not be refused merely because
the assessee could have filed a suit.46. Where the defect of jurisdiction is apparent on the face of the proceedings, or there is an
abuse of power, a writ of prohibition or other appropriate writ or order will be issued despite some delay in filing the petition47. or
the existence of an alternative remedy, e.g., the right of appeal. 48. But normally, the High Court would not exercise its jurisdiction
under art 226 when an alternative, adequate and efficacious legal remedy is available and the petitioner has not availed of the
same before coming to the High Court.49. The issue of alternative remedy, although material for a certiorari¸ is not so far a writ of
prohibition.50.
Genpact and Chabbil Das.—
Section 115QA was inserted on June 1, 2013 to tax the gains arising on the buy-back of shares by a company under s 77A of the
Companies Act, 1956. In the instant case, the buy-back was not under s 77A but the buy-back was in pursuance of a scheme of
arrangement under s 391 of the Companies Act, 1956 – which is completely different from s 77A. Section 115QA was later
amended in 2016 to include buy-back "under any provision of law" - which would include buy-back under s 391 as well. But this
amendment was only prospective. Therefore, on a plain reading of s 115QA, only buy-back of shares under s 77A would be liable
to tax. Consequently, the demand of tax made by the officer was without jurisdiction and the writ petition should have been
allowed by the High Court on this short ground alone.51. However, it was wrongly dismissed by the Supreme Court52. on the
grounds discussed below.
The Supreme Court erred in dismissing the SLP on the ground that there was an alternate remedy because s 246A permitted an
appeal to be filed when there was "denial of the assessee's liability to be assessed". 53. On this ground, every writ petition can be
dismissed because every writ petition and, indeed every appeal, would contain a "denial of the assessee's liability". If the assessee
accepted his liability, there would be neither any appeal nor any writ petition. Section 115QA is in the nature of a charging section
and if there was no liability for a buy-back made pursuant to a scheme of arrangement under s 391 till 2016, then the demand
does not survive at all and the writ petition should have been allowed on the ground of lack of jurisdiction.
There is an increasing and regrettable reluctance on the part of the High Courts to interfere under art 226 even where the
assessments are sought to be reopened completely without any jurisdiction. The case that is often relied on is CIT v Chhabil Dass
Agarwal,54. where the assessee had not filed any return in response to a notice under s 148 and was subject to best judgment
assessment under s 144. He then questioned this assessment under art 226 and the Sikkim High Court erroneously allowed the
writ petition even though several factual questions were involved. When this matter was taken to the Supreme Court, it could
have simply allowed the Department's appeal, but the court went on to make an elaborate order discussing the law relating to
alternate remedy even though this was wholly unnecessary. But the Chhabil Dass decision is repeatedly relied upon by the High
Court to reject writ petitions even in the most genuine cases. The Chhabil Dass decision mercifully recognizes some exceptions
and these are: (a) where the statutory authority has not acted in accordance with the enactment in question or (b) in defiance of
the fundamental principles of judicial procedure, or (c) has sought to invoke provisions which are repealed, or (d) when an order is
passed in total violation of the principles of natural justice. It is submitted that another exception to the rule is where the
statutory authority seeks to demand tax or duty on the basis of an amendment that has come much later; or, in other words,
deliberately ignores the statutory provisions which were applicable at the relevant time. [For further commentary on this decision,
see p 2636.]
(i) Burdensome.—
The bar of alternative remedy will not apply when a persons fundamental rights are infringed and relief is sought under art 226.
The Supreme Court has held that onerous and burdensome character as a statute requiring to deposit whole amount of tax
before, for availing appeal remedy, could hardly be described as an adequate alternative remedy. 55. Similarly, where a party comes
to court with an allegation that his right has been or is being threatened by a law which is ultra vires the powers of the
legislature which enacted it, a writ will lie; thus, an actual infringement of a right is not necessary.56.
Where an executive authority acts without jurisdiction, and the proceedings are likely to subject a person to lengthy proceedings
and unnecessary harassment, the High Courts will issue appropriate orders or directions to prevent such consequences.57.
If an appeal is from 'Caeser to Caesar's wife' the existence of alternative remedy would be a mirage and an exercise in futility.58.
(ii) Binding Orders.—

A writ will lie when orders of the Supreme Court or High Court or Tribunal which are binding on authorities are not followed. 59.
Sadly, several High Courts decline to entertain writs on this ground, and direct the party to approach the AO and inform him
about the binding order!
(iii) Lack of Jurisdiction.—

It has been held that no authority, much less a quasi-judicial authority, can confer jurisdiction on itself by deciding a jurisdictional
fact wrongly. It is incomprehensible to think that a quasi-judicial authority like the Income-tax Officer can erroneously decide a
jurisdictional fact and thereafter proceed to impose a levy on a citizen. Therefore, a question whether the jurisdictional fact has
been rightly decided or not is a question that is open for examination by the High Court in an application for a writ of certiorari.60.
What constitutes a 'jurisdictional fact' has been explained in undernoted cases.61.
(iv) Show-cause Notice.—

The Supreme Court in various decisions has laid down the principle that, every notice must fulfil two requirements which are:
(i) it must be adequate;62. and

(ii) it must mention all the grounds on which action is proposed to be taken against the concerned person.63.
It is no doubt true that at the stage of show-cause, the person proceeded against must be told of the charges against him so
that he can take his defence and prove his innocence. It is obvious that at that stage the authority issuing the charge-sheet,
cannot, instead of telling him the charges, confront him with definite conclusions of his alleged guilt. If that is done, the entire
proceedings initiated by the show-cause notice gets vitiated by unfairness and bias and the subsequent proceedings become an
idle ceremony.64. The test, therefore, is as to whether a mere apprehension of bias or there being a real danger of bias and it is on
this score that the surrounding circumstances must and ought to be collected and necessary conclusion drawn therefrom – in the
event however the conclusion is otherwise inescapable that there is a real danger of bias, the administrative action cannot be
sustained.65. Thus, a show-cause notice issued with premeditation, a writ petition would be maintainable. In such cases, even if
the court directs the statutory authority to hear the plea afresh, ordinarily such hearing would not yield any fruitful purpose.66.
The Supreme Court has categorically held that one cannot raise a fresh plea which has not been raised in the show cause notice,
nor can it be allowed to take contradictory stands in relation to the same person.67.
Cases challenging validity of notices under s 148 by way of writ petition have been dealt with under ss 147 and 148.
(v) Writ Admitted.—

Once the writ petition stands admitted, the plea of alternative remedies at the time of final argument and that too after a decade
would pale into total insignificance and cannot be permitted to be raised. Otherwise too, the impugned order would manifest that
it is not simply a case of an interim order when the view of the authorities is certainly reflected in no uncertain terms. Additionally,
when the facts are admitted it shall be well within the scope for writ jurisdiction to determine the question of law and in such
circumstances, it would neither be just or equitable to relegate the petitioner to redress his grievances either before the collector
of Central Excise or other appellate forum or revisional authority.68. When a writ petition is pending before the court for 12 long
years and the matter can be easily decided based on the facts on record, it is not desirable to remand the matter to the statutory
authority.69.
(vi) Contract.—
If the contract between a private party and the State/instrumentality and/or agency of the State is under the realm of a private
law and there is no element of public law, the normal course for the aggrieved party, is to invoke the remedies provided under
the ordinary civil law rather than approaching the High Court under art 226 of the Constitution of India and invoking its
extraordinary jurisdiction. If, on the facts of a particular case, it is found that the nature of the activity or controversy involves a
public law element, then the matter can be examined by the High Court in writ petitions under art 226 of the Constitution of
India to see whether the action of the State and/or instrumentality or agency of the State is fair, just and equitable.70.
(d) Delay or laches.—

If the petitioner approaches the court with considerable delay, they would disentitle themselves to seek any relief in writ
jurisdiction.71. However, the objection re-garding delay or laches or the non-availing of alternative remedy cannot be sustainable
in respect an order which was on the face of it illegal and opposed to principles of natural justice.72.
There is no period of limitation prescribed by any statute for filing a writ petition under arts 226 and 227 of the Constitution. The
only known principle is that the Court may not examine stale causes as the court helps the vigilant and not the indolent. It is a
rule devised on the principle of judicial circumspection and has to be applied wisely. 73. The Supreme Court after observing that no
period of limitation applies to writ jurisdiction, held that writ jurisdiction as by very nature is a typical extraordinary jurisdiction is
discretionary and equitable, which puts it on a different footing from ordinary civil proceedings and allowed a writ petition filed
after a delay of ten years.74. The Supreme Court also observed that: 'as courts of equity, we have evolved a principle of practice,
and not as a rule of law, not to enquire into belated and stale claims, notwithstanding that no period of limitation is prescribed
either by the Constitution or by the Limitation Act. These principles enable the writ court to administer justice on the principles of
equity, justice and good conscious'. In another decision the Supreme Court imposed heavy cost on Department wherein it filed a
writ petition against the order of settlement commission after a delay of three years.75.
(e) Locus Standi.—

An aggrieved person on whom lies the final incidence of tax76. or an agent77. has locus standi to file a writ petition. A member of
an erstwhile association can file a writ petition in a case affecting his rights,78. as also an association representing its members.79.
A single writ petition is maintainable at the instance of several petitioners if they are jointly interested in the cause of action and if
a common question of law is involved.80. A petition filed by an association not registered is maintainable in view of widening of
concept of locus standi.81.
Even the trade unions are entitled and justified in filing writ petitions.82. However, a writ will issue only against the statutory
authority or 'state' within the meaning of art 12 of the Constitution, and not against any individuals.83.
(f) Supervisory Jurisdiction of High Courts.—

Article 227 of the Constitution confers upon every High Court the power of superintendence over all the subordinate courts and
inferior tribunals functioning in the state, with the object of securing that all such institutions exercise their powers and discharge
their duties properly and in accordance with law. 84. The nature of this power is judicial as well as administrative. The power
conferred by this provision on every High Court is unlimited and unfettered,85. and has been held to be a part of the basic
structure of the Constitution.86. However, in exercising this supervisory power, the High Court does not sit or act as an appellate
authority.87.
PRINCIPLES OF INTERPRETATION
8. The Usage of Principles of Interpretation.—
Principles or rules of interpretation have been devised to assist the courts in the interpretation of statutes where the words or the
language used there are ambiguous and there is a doubt about the meaning thereof; provided the doubt is real, and not merely
conjectural or fanciful.88. They are not rules of law. They are merely aids to construction or interpretation of statutes and should
not be treated as masters. They can be discarded or ignored, if the facts and circumstances so require, and new rules of
interpretation may be evolved as and when necessary to meet new or unique situations.89. So long as there is no ambiguity,
conflict or absurdity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes
impermissible.90. Therefore, if any statutory provision is plain and unambiguous admitting of no second meaning, then no rule of
interpretation needs to be employed91. and no extraneous considerations need be imported.92. If the wording is clear and
unambiguous, benefits which are not available under a section cannot be conferred by expanding or misinterpreting the words in
that section.93. If there is no ambiguity in a provision, it cannot be read down.94. Efforts should be made to give meaning to each
and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being
inapposite surpluses, if they can have proper application in circumstances conceivable within the contemplation of the statute.1.
The object of all constructions or interpretations is to ascertain the intention of the lawmakers and to make it effective.2. Since
there are several rules governing the construction of the provisions found in a fiscal legislation, the court has to select the most
relevant principle applicable to aid the understanding of the particular provision.3.
The true function of the court is to interpret the law and not to make it. If the Legislature falls short of the mark, the court can do
nothing more than declare it to be thus, giving its reasons, so that the Legislature may take notice and promptly remedy the
situation.4.
Four Important Ingredients.—
In tax jurisprudence, following four factors are essential ingredients in a taxing statute:- (a) subject of tax; (b) person liable to pay
the tax; (c) rate at which tax is to be paid, and (d) measure or value on which the rate is to be applied.5.
9. The Rule of Literal Interpretation.—

A statute is the edict of the legislature. The language employed in a statute is the determinative factor of legislative intent. The
first and primary rule of construction is that the intention of the legislation must be found in the words used by the legislature
itself.6. It shall interpreted in such a way that the intention of the legislature shall prevail and no injustice caused to the parties.7.
The court is bound to interpret and apply the provisions of the Act as they stand without going behind the wisdom of the
legislature.8. Unless there is an intention to the contrary, the words in a statute should be given their ordinary grammatical or
natural meaning.9. The literal rule of statutory interpretation demands that if the statute is plain, the courts must apply it
regardless of the result.10. The plain language of a statute must override any supposed intendment of the legislature11. and
cannot be amended or stretched by the court.12. Every word of a statute has to be assumed to have been deliberately and
consciously incorporated therein by the legislature,13. and if the language of a statute is clear and explicit, effect must be given to
each word.14. One should look squarely at the words in the light of what is expressly stated and nothing can be implied so as to
supply any assumed deficiency.15. No words should be added or subtracted,16. or altered or modified unless it is plainly necessary
to do so in order to prevent a provision from being unintelligible, absurd, unreasonable, unworkable, or totally irreconcilable with
the rest of the statute.17. The court ought not, under any circumstances, substitute its own impressions, ideas or notions of justice
in place of the legislative intent as is available from a plain reading of the statutory provisions.18. The language employed in a
statute is the determinative factor of the legislative event and even assuming there is a defect or any omission in the words used
in the legislation, the court cannot correct or make up the deficiency, especially when a literal reading thereof produces an
intelligible result and any departure from the literal rule would really be amending the law in the garb of interpretation which is
not permissible and which would be destructive of judicial discipline.19. What is not included or rather specifically excluded, cannot
be incorporated by the court and it is not the function of the court to legislate or plug the loopholes in the law.20. The courts or
the Tribunal cannot extend relief when the legislative intent is otherwise. 21. The courts22. have accepted another principle of
interpretation, contextual or purposive interpretation which may ignore the literal meaning, when one or more of the following
tests are satisfied:
(i) Semantic and syntactic ambiguity is apparent and, therefore, the legislation grammatically is capable of more than one
meaning;
(ii) There is contextual ambiguity which can be internal or external in nature in the following manner:
(a) There is an error in the text which falsifies Parliament's intent.
(b) There is repugnancy between the word of the enactment and another enactment resulting in ambiguity.
(c) Consequences of literal construction are so undesirable that the Legislature could not have intended the said
consequences.
(d) Passage of time since the enactment, would justify contemporaneous construction, as verbal texts do not get frozen in
time.
10. The Rule of Strict Interpretation.—

The cardinal principle of interpretation of fiscal laws is that they should be construed strictly23. and so long as the provision is free
from ambiguity, there would be no need to draw an analogy. 24. This is because tax laws are clearly in derogation of personal
rights and property interests and are, therefore, subject to strict construction, and any ambiguity must be resolved against
imposition of the tax.25. Unless the language of the provision is clear, tax liability cannot be fastened on a person.26. Conversely, if
the subject comes within the letter of the provision, then he must be taxed, however great the hardship may appear to the mind
of the court.27. In certain cases, the intention of the Legislature in including or leaving out certain words is also necessarily
required to be seen.28. Equitable construction may be resorted to where strict literal construction does not lead to the result
intended.29. This principle of strict interpretation is not applicable while construing provisions such as machinery provisions.30.
One safe and infallible principle, which is of guidance in these matters, is to read the words through and see if the rule is clearly
stated. If the language employed gives the rule in words of sufficient clarity and precision, nothing more requires to be done.
Indeed, in such a case the task of interpretation can hardly be said to arise: absoluta sententia expositore non indiget (A
sentence that is plain and absolute does not need an expositor). The language used by the legislature best declares its intention
and must be accepted as decisive of it. 31.
11. Other Important Principles (Including Departure from the Rules of Literal and Strict Interpretation).—
It is an equally well-settled rule that a construction that will render a provision of an enactment wholly32. or partially33.
meaningless or futile34. is not to be adopted by the court. An interpretation that will result in an absurd situation cannot be
accepted.35. The court should endeavour to interpret the provisions of a statute in a manner that will achieve the object of the
provision,36. avoid mischief, 37. advance the cause of justice,38. provide the remedy intended by the statute,39. make the law
workable and enforceable instead of reducing it to a redundant or dead letter40. and best harmonize with and effectuate the
object of the legislation.41. Words indicative of any exclusion or condition, in the absence of any intention to the contrary, have to
be given full effect.42.
Though ordinarily no words can be added or read into an Act unless it is absolutely necessary to do so, departure from this rule is
legitimate in such cases where literal construction may result in depriving certain existing words of all the meaning or to avoid any
part of the statute becoming meaningless or otiose.43. Thus, where a literal construction would defeat the obvious intention of
the legislation and produce a wholly unreasonable or manifestly unjust result, the court must follow the rule of reasonable
construction or modify the language of the statute or even 'do some violence to the words' to achieve that obvious intention and
produce a rational construction.44. The intention of the legislature has to be gathered from the language used in the statute,
which means that attention should be paid to what has been said as also to what has not been said.45. On the other hand,
reading a provision by ignoring or rejecting certain words is not a permitted mode of interpretation. It would lead to burial of the
settled legal position that a provision should be read as a whole, without rejecting and/or adding words thereto. Rejecting of
words cannot be resorted to achieve a predetermined objective. This would amount to redrafting the legislation which is beyond
the jurisdiction of courts.46.
Further, if two interpretations are possible, the interpretation that upholds the constitutionality47. or advances the object of the
enactment48. should be favoured. Interpretation cannot be unreasonable and unjust,49. and a construction that accords with
reason and justice must be preferred to one that would completely defeat the intention of the legislature without advancing the
object of the provision.50. An intention to produce an unreasonable result is not to be imputed to a statute if there is some other
construction available.51.
(a) Contextual Meaning.—
In order to interpret a statute, if the provisions are ambiguous, a 'contextual meaning' must be given.52. The court is entitled, and
indeed bound, when construing the terms of any provision, to consider the context in which it appears.53. The meaning
attributable to a term has to be understood with reference to the context and the purpose for which a particular provision is
enacted.54.
(b) Mischief Rule.—

To construe the provisions of a statute, it would be just and proper to see what was the position before an amendment and find
out what was 'the mischief sought to be remedied' and then discover the true rationale for such remedy. 55. This rule is also
known as the rule in Heydon's Case,56. where the first and the finest exposition of this rule was recorded more than four hundred
years ago. In that case, the Barons of the Exchequer held:
… fo r th e su re an d tru e in terp retatio n o f all statu tes in gen eral (b e th ey p en al o r b en eficial, restrictive o r en largin g o f th e co mmo n law )
fo u r th in gs are to b e discern ed an d co n sidered: (1st). W h at w as th e co mmo n law b efo re th e makin g o f th e Act. (2n d). W h at w as th e
misch ief an d defect fo r w h ich th e co mmo n law did n o t p ro vide. (3rd). W h at remedy th e Parliamen t h ath reso lved an d ap p o in ted to cu re
th e disease o f th e co mmo n w ealth . An d, (4th ). Th e tru e reaso n o f th e remedy; an d th en th e o ffice o f all th e Ju dges is alw ays to make su ch
co n stru ctio n as sh all su p p ress th e misch ief, an d advan ce th e remedy, an d to su p p ress su b tle in ven tio n s an d evasio n s fo r co n tin u an ce o f
th e misch ief…
Interpretation of a statute should ordinarily be literal and the plain reading of the words has to be given effect. At the same time
when the plain reading creates some difficulties, a purposive meaning should be encouraged by the court.57. Purposive
interpretation means to understand the purpose with which a particular provision was enacted or inserted by the Legislature.58.
The statement of the Minister who has moved the bill in Parliament can be looked into to ascertain the mischief that was sought
to be remedied and the object or purpose for which the legislation was enacted. The Supreme Court held however, that the
statement of the minister is not to be taken into account for interpreting the provisions of the enactment.59. It is submitted that
the latter part of the observation is not correct. If the provisions of the enactment are not clear or are ambiguous there is no
harm or prohibition in referring to the statement of the minister which will be a useful guide in giving a proper interpretation.
(c) Updating Construction.—

It is presumed that Parliament intends the court to apply to an ongoing Act a construction that continuously updates its wording
to allow for changes.60. The interpretation must keep pace with changing concepts and values and should undergo adjustments
to meet the requirements of the developments in the economy, law, technology and the fast changing social conditions.61.
(d) Reference to Other Statutes.—

In considering the context in which a provision is to be interpreted, it must be noted that related provisions in different Acts
having a bearing on the same subject must be read together. It is permissible to read the provisions of two Acts together when
the same are complementary to each other.62.
12. Interpretation of the Incometax Act.—

No tax can be imposed on the subject without words in the Act clearly showing an intention to lay a burden upon him.63. The
subject cannot be taxed unless he comes within the letter of the law; the argument that he falls within the spirit of the law cannot
be availed of by the department.64. Tax and equity are strangers and an equitable construction cannot be put upon the words of
a taxing statute.65. Equity has no role to play in taxation and that more so, in statutory appeal, the scope is limited.66. 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, into the provisions which has not been provided by
the legislature.67. One can only look fairly at the language used.68. No tax can be imposed by inference or analogy.69. No income
can be brought to tax on the basis of the intention or scheme of the Act.70. It is also not permissible to construe a taxing statute
by making assumptions and presumptions.71. Nevertheless, tax laws 'have to be interpreted reasonably and in consonance with
justice'72. adopting a purposive approach.73. It should be interpreted in a fair, just and equitable manner, and should not be
interpreted in a manner which results in injustice and creates tax liabilities.74. The consequences of an interpretation may be taken
into account to fix the meaning of a statutory provision in case of doubt or ambiguity.75.
The interpretation of a provision in a taxing statute rendered years back and accepted and acted upon should not be easily
departed from except for compelling reasons.76. But the construction of a statutory provision particularly in the context of a
situation not foreseen by the law-makers should not be overtly literal but should be purpose-seeking; the reading of the
legislative intention is very important specially where the law as framed leaves a void for the judiciary to fill in, in the total setting
of the law.77.
Generally speaking, the sections in the Act do not overlap one another: each section deals only with the matter specified therein
and goes no further, and each section completely covers the matter with which it deals.78. As far as possible the Act should be
construed in such a way as to reconcile the various provisions and unravel apparent conflict into harmony, bearing in mind that a
general provision cannot derogate from a special provision regarding a certain class of cases.79. This principle is expressed in the
maxim generalia specialibus non derogant,80. which has to be made applicable where special provisions exist.81. A special
provision excludes the operation of a general provision,82. but only when the general and special provisions occupy the same
field83. and not when they operate upon different areas.84. A general provision also cannot be interpreted to suit the case of one
category of assessees only.85. A provision subject to the other provisions of the Act or any other law necessitates a combined
reading of such provisions.86. Further, in interpreting a taxing statute, the court cannot be oblivious of the proliferation of black
money that is under circulation in our country.87.
13. Harmonious Construction.—

The court should adopt a harmonious construction that gives meaning to all parts of the Act.88. The entire statute should be read
as a whole89. and the same has to be considered thereafter chapter by chapter and then section by section and ultimately word
by word.90. One provision thereof should be construed with reference to another provision so as to make a consistent enactment
of the whole statute.91. Additionally, all the limbs of the section should also be read harmoniously.92. The court is entitled to
consider any other parts of the Act which throw light upon the intention of the legislature and which may serve to show that the
particular provision ought not to be construed as it would be if considered alone and apart from the rest of the Act.93. One
provision of the Act cannot be so construed as to defeat another provision of the Act, and the several provisions in the Act must
be read together and as parts of one larger scheme.94. Such provisions have to be read harmoniously and in such a manner that
neither of them becomes useless lumber. 95. While construing the provisions of a statute, apparent inconsistency of those
provisions with the provisions of another related statute should be harmonised and reconciled in the light of the object and
purpose of the legislation in question.96.
The Supreme Court97. has summarised the essence of the rule of harmonious construction, as follows:
(i) the courts should avoid a head on clash between two provisions of a statute and construe the provisions which appear to be
in conflict with each other in a manner to harmonise them;
(ii) provisions of one section of a statute cannot be used to defeat the other provision unless the court, in spite of efforts, finds it
impossible to effect reconciliation; and
(iii) provisions should be read together harmoniously so as to give effect to all provisions as a consistent whole rendering no part
of the provision as surplusage.
14. Principle of Beneficial Interpretation.—

If the interpretation of a fiscal enactment is open to doubt, the construction most beneficial or favourable to the assessee should
be adopted,1. even if it results in his obtaining 'a double advantage'. 2. Once an assessee falls within the ambit of a beneficial
provision, then the said provision should be liberally interpreted.3. If it is a case of considering the respective hardships or
inconveniences of the revenue and of the assessee, the court should lean in favour of the assessee.4. That is to say if two
interpretations are possible then the interpretation in favour of the assessee should normally be accepted.5. But the question of
applying this principle of beneficial interpretation would arise only where, in the opinion of the court, two views are reasonably
possible. If, on a plain reading of the statutory provision, the court is of the opinion that only one interpretation is reasonably
possible, which is against the assessee, it cannot give an erroneous interpretation in favour of the assessee by resorting to this
principle.6. An interpretation to extend the benefit intended by the Legislature should be preferred, instead of an interpretation to
deny the benefit by resorting to a technical interpretation.7.
15. Case Governed by more than One Provision.—

If a case appears to be governed by either of two provisions, it is clearly the right of the assessee to claim that he should be
assessed under that one which leaves him with a lighter burden.8. If the assessee's income falls under two exempting sections, he
is entitled to rely on both sections unless they are expressly or by necessary implication made mutually exclusive.9. For instance,
benefit of the proviso to s 112(1) cannot be denied to non-residents/foreign companies who are also entitled to different relief in
terms of the first proviso to s 48.10.
16. Principles of Natural Justice.—

The principles of natural justice must be read into the unoccupied interstices of the statute unless there is a clear mandate to the
contrary.11. Mere ritualistic giving of hearing and reproducing the submissions without understanding the assessee's case would
not satisfy the test of natural justice.12. However, where a statutory provision either specifically or by inevitable implication
excludes the application of the rules of natural justice, then the court cannot ignore the mandate of the legislature and extend the
application of the rules even to the excluded categories.13.
In Sona Builders v UOI,14. the Supreme Court held that the Department, in proceedings under the Act, must serve notice on the
assessee giving reasonable time for him to respond and file his response. In that case, the assessee effectively had only five days
to respond, since the limitation to pass the order was also expiring. The proceeding was quashed, and the Supreme Court also
refused to remand the matter back to the AO on the ground that he would not have time to complete the proceedings in a fair
manner. This follows the salutary principle that in a writ by an assessee, the Court cannot give the Department more time to
complete proceedings than the limitation prescribed under the Act. In other words, if the AO has passed an illegal order, he
cannot cure it after limitation to pass such order is over by resort to s 292B.15.
But, on the other hand, the Madras High Court remanded a matter back to the AO even when the order had been passed at the
eleventh hour without following the prescribed procedure. The single judge of the High Court even refused to follow the Supreme
Court decision in Sona Builders and another order of a co-ordinate bench of the Madras High Court.16. The Division Bench
confirmed the remand, but refused to rule on limitation.17. It is submitted that these judgments are incorrect and do not reflect
the correct position of law.
17. Casus Omissus.—

Casus omissus is a well-settled rule of interpretation which means that a matter which should have been but has not been
provided for in a statute, cannot be supplied by the court. Even a defect in phrasing does not permit addition.18. A casus omissus
cannot be supplied by the court except in the case of clear necessity and when reason for it is found in the four corners of the
statute itself. 19. Even though a casus omissus cannot be readily inferred,20. it has to be inferred when a literal construction of a
particular section leads to manifestly absurd results which could not have been intended by the legislature21. or to avoid any part
of the statute becoming meaningless or otiose.22.
18. Doctrine of Contemporanea Expositio.—

A statute may be interpreted by reference to the exposition it has received from contemporary authority, though such exposition
must give way where the language of the statute is plain and unambiguous.23. The doctrine of contemporanea expositio
(exposition by a contemporary authority) can be applied to limit the state to its own narrower interpretation in favour of the
subject, but not to claim its interpretation in its own favour as conclusive.24. The doctrine is not confined strictly to the
interpretation of ancient statutes; courts have frequently applied the doctrine to interpret recent fiscal legislations.25.
19. Provision whether Mandatory or Directory.—

The question as to whether a statute is mandatory or directory depends upon the intent of the legislature; the meaning and
intention of the legislature must govern, and these are to be ascertained not only from the phraseology of the provision but also
by considering its nature, its design, and the consequences, especially the penal consequences,26. which would follow from
construing it one way or the other. 27. If the object of the enactment will be defeated by holding it directory, it should be
construed as mandatory; whereas if by holding it mandatory, serious general inconvenience will be created to innocent persons
without much furthering the object of the enactment, it should be construed as directory.28. The use of the word 'shall' in a
statutory provision, though generally taken in a mandatory sense,29. does not necessarily mean that in every case it shall have
that effect.30. The word 'shall' is construed as mandatory unless there is something in the context in which the word is used which
would justify a departure from the meaning.31. On the other hand, the use of the word 'may' is generally taken in a directory
sense;32. but it is not always correct to say that where the word 'may' has been used, the statute is only permissive or directory.33.
The undermentioned cases lay down the various tests enunciated by different courts to determine whether a provision is
mandatory or directory.34.
20. Amendments, Omissions and Repeals.—
An amendment may be made by the legislature not only to change the law but also to clarify the position.35. On any aspect as
regards which the law is vague or silent the amending provision removing such vagueness or silence can certainly be taken as
guidance for construction of the unamended provision.36. Further, the rules of interpretation of amendments of a statutory
provision would equally hold good for interpretation of amendments of a statutory rule.37. If the language of the statute on a
literal construction is clear, unambiguous and not absurd, it is not permissible for the court to take into account any subsequent
amendment to such a provision in interpreting the provision.38. However, it has been held that subsequent legislation may be
looked into to fix the proper interpretation to be put on the statutory provisions as they stood earlier.39.
(a) Declaratory or Explanatory Provision.—
A declaratory or explanatory amendment is generally passed to supply an obvious omission or to clear up doubts as to the
meaning of the previous law; if a statute is merely declaratory or curative, retrospective operation is generally intended.40.
(b) Omissions and Repeals.—

Where a statutory provision is omitted by an Act and the said Act simultaneously re-enacts a new provision which substantially
covers the field occupied by the repealed provision with certain modifications, in that event such re-enactment is regarded as
having force continuously and the modifications or changes are treated as amendments coming into force with effect from the
date of enforcement of the re-enacted provision.41. Likewise, transitory provisions should, as far as possible, be construed so as to
effect such continuity and not so as to create a lacuna.42. Further, omission being different from repeal, the principle underlying s
6 of the General Clauses Act, 1897 providing the savings for proceedings for liabilities incurred during the currency of the
previous law will not apply to an omission of a provision but only to a repeal.43. The question whether the subsequent
amendment to any existing provision results in its repeal or not will depend upon the words employed in the amendment and the
intention underlying the use of those words.44. Section 24 of the General Clauses Act, 1897 provides for continuation of orders,
notifications etc., issued under enactments repealed and re-enacted. In such instances, if repealed and re-enacted provisions are
not inconsistent with each other, any order or notification made under the repealed provisions is deemed to be an order made
under the re-enacted provisions.45.
INTERPRETATION OF CERTAIN SPECIFIC PROVISIONS

21. Charging Provisions and Related Provisions.—
The rule of construction of a charging section is that before taxing any person, it must be shown that he falls within the ambit of
the charging section by clear words used in the section. No one can be taxed by implication. If a person has not been brought
within the ambit of the charging section by clear words, he can-not be taxed at all.46. Those sections which impose the charge or
levy should be strictly construed.47. Sections which merely provide a machinery for collection of a charge which is imposed in
general terms elsewhere, cannot restrict the attachment of the charge, being 'in aid and not in derogation of it'.48. But the
computation provisions may help to determine the ambit of the charging section, since together they constitute an integrated
code.49. Thus, the charging section has to be construed with the help of the other relevant provisions.50. Further, in interpreting a
charging section, the court must avoid such construction of the provisions that leads to double taxation unless that is expressly
provided by the statute or follows by necessary implication.51. The rule of strict construction applies a fortiori to provisions that
create an artificial or vicarious liability to tax.52.
22. Machinery or Procedural Provisions.—

The fundamental rule of construction regarding those provisions that deal merely with the machinery of assessment and
collection is that they should not be subjected to a rigorous construction but should be interpreted in a way that makes the
machinery workable.53. They must be construed in a manner that will effectuate the levy of the tax54. and advance the object
behind the provisions. In interpreting machinery sections, there is no need to be unduly harsh against the assessee and any
benefit of the language, if available, should go to the assessee rather than to the revenue.55. However, the courts are expected to
construe the machinery provisions in such a manner that a charge of tax is not defeated.56. A construction that disables the
taxing machinery and lets the assessee get away with not paying tax to the extent due should not be adopted.57. Further, a law
that brings about a change in the forum does not affect pending actions unless an intention to the contrary is clearly shown.58.
The Supreme Court has held that the charging provisions and the machinery provisions form an integrated code, and if there is a
charge, the machinery provisions must automatically follow.59.
The law of procedure has to be approached, understood and appreciated as a helpmate in the course of the process of
administration of justice.60. Procedural provisions should be so construed as to subserve the course of justice and not to hinder
it.61. Keeping these principles in mind, the Supreme Court has held that though the Code of Civil Procedure, 1908 by itself does
not apply to the proceedings under the Income-tax Act, a principle of procedure evolved for doing justice to a party to the
proceeding contained therein can be called in aid while interpreting a procedural provision contained in this Act.62.
23. Limitation Provisions.—

Statutes of limitation are jurisprudential necessities because they achieve peace and good administration.63. The provisions
regulating the period of limitation must receive a strict construction.64. Even though limitation is not specifically set up as a
defence, a barred proceeding has to be dismissed.65. But if limitation was extended during the pendency of proceedings, such
extended period applies to the pending proceedings.66.
24. Penal Provisions.—

The rule of strict construction applies a fortiori to provisions that are penal67. or quasi-penal68. in character. Moreover, there is no
retrospective operation69. or no vicarious liability in penal law unless the statute takes that also within its fold.70. In case of
legislative ambiguity in penal provisions, the assessee should be entitled to the benefit of doubt.71.
25. Deeming Provisions and Legal Fictions.—

When a statute enacts that something shall be deemed to have been done, which in fact and truth was not done, the court is
entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to and full
effect must be given to the statutory fiction and it should be carried to its logical conclusion.72. The word "deemed" is used a
great deal in modern legislation. Sometimes it is used to impose, for the purposes of a statute, an artificial construction of a word
or phrase that would not otherwise prevail. Sometimes it is used to put beyond doubt a particular construction that might
otherwise be uncertain. Sometimes, it is used to give a comprehensive description that includes what is obvious, what is uncertain
and what is, in the ordinary sense, impossible.73. Legal fiction can neither be indulged in by courts nor can it be created by an
administrative order.74.
A deeming provision is intended to enlarge the meaning of a particular word which includes matters which otherwise may or may
not fall within the provision; it should, therefore, be extended to the consequences and incidents which shall inevitably follow. 75.
Deeming provisions require to be construed strictly.76.
The word 'deemed' is apt to include the obvious, the uncertain and the impossible.77. A legal fiction has to be given its full effect
and carried to its logical conclusion,78. but only within the field of the definite purpose for which the fiction is created.79. As far as
possible, a legal fiction should not be so interpreted as to work injustice.80. In construing the scope of a legal fiction it would be
proper and even necessary to assume all those facts on which alone the fiction can operate.81.
For a detailed commentary on the extensive case law on deeming provisions and legal fictions, reference may be made to India's
leading commentary on the subject.82.
26. Legal Presumption.—

There is a difference between a legal fiction and a legal pre-sumption; whereas a legal fiction is a legal provision which creates a
fact out of what is not a fact, a legal presumption is a legal inference to be drawn from a particular fact or set of facts. When a
legal presumption is sought to be raised by a specific and distinct provision, it cannot be said to be simply clarificatory in nature
but, for all intents and purposes, it has to be treated to be a substantive provision of law.83.
27. Appeal and Refund Provisions.—

A right of appeal is the creature of the statute and an assessee has a right of appeal only if there is a statutory provision for it.84.
There is no inherent right of appeal and no right of appeal can be created by way of implication.85. If a right of appeal is not given
by the statute, no appeal would lie.86. But a provision for appeal should be liberally construed and should be read in a reasonable
and practical manner;87. it is always desirable not to place a restricted meaning to such a provision and take away the right of
appeal provided to a party.88. Similarly, provisions giving refund must also be interpreted liberally and in favour of the assessee.89.
28. Provisions Creating a Right.—

While construing a provision that creates a right, the court must always lean in favour of a construction that saves the right
rather than the one which defeats it.90.
29. Provisions for Deduction, Exemption, Incentives, Benefits or Relief.—

A plethora of judgments of the Supreme Court and various High Courts have firmly laid down the rule that a provision for
deduction, exemption or relief should be interpreted liberally, reasonably and in favour of the assessee, 91. and it should be so
construed as to effectuate the object of the legislature and not to defeat it.92. However, if the assessee falls within the language of
the exemption the intent cannot be used to deny him the benefit of the provisions.93. The correct way of reading the different
heads of exemption enumerated in a section would be to treat each as a separate and distinct head of exemption.94. Since a
provision for promoting economic growth has to be interpreted liberally, the restriction on it too has to be construed so as to
advance the objective of the provision and not to frustrate it.1. Although the exemption provisions are to be construed strictly as
regards the applicability thereof to the case of the assessee, once it is found that the same is applicable, the same (sic) are
required to be interpreted liberally. 2. While interpreting so, it is not open to the court to ignore the conditions prescribed for
claiming the exemption.3. However, the interpretation should lead only to a logical end; it cannot go to the extent of reading
something that is not stated in the provision.4.
Full effect should be given to the language used in the provision5. and a rigid or restricted interpretation must be avoided.6. The
provision should be assigned such meaning as would enable the assessee to secure the benefit intended to be given by the
legislature to the assessee;7. but it would not be reasonable or permissible for the court to rewrite the section or substitute words
of its own for the actual words employed by the legislature in the name of giving effect to the supposed underlying object.8.
Accordingly, the scope of the exemption cannot be enhanced or expanded by a judicial pronouncement.9. A construction leading
to absurd results should be avoided10. and a deduction cannot be permitted on the analogy of another deduction, but can be
allowed only when it is provided under the Act explicitly.11. The exemption clause has to be considered with reference to the
object with which it was enacted.12.
A five-judge bench of the Supreme Court held that if there are two views possible in the interpretation of a charging section, the
view in favour of the taxpayer or the assessee should be preferred. However, if there is an ambiguity in an exemption notification,
the benefit of such ambiguity cannot be claimed by the assessee but must be interpreted in favour of the Revenue.13. It is
submitted that such a distinction is erroneous and without any basis. It further erroneously held that one has to look at the
language of the notification alone and the object and purpose of granting the exemption is irrelevant. It is submitted that if there
is ambiguity in an exemption notification, it can be adequately resolved by ascertaining the object and purpose of the notification.
The interpretation which promotes the object and purpose of the exemption notification should be followed, irrespective of
whether it is in favour of the Revenue or the assessee.
EXTERNAL AIDS TO CONSTRUCTION

30. Legislative History and Background.—
The legislative history of a fiscal statute could be traced and considered to understand its scope.14. Although it is not permissible
to use this aid for the purpose of construing the meaning of the enacted provision, yet it is permissible to look into the historical
facts and surrounding circumstances for ascertaining the evil sought to be remedied.15. It is also permissible to look into the
circumstances that prevailed at the time when the law was passed for determining the purpose or object of the legislation.
Further, to sustain the presumption of constitutionality, consideration may be had even to matters of common knowledge, the
history of the times and every conceivable state of facts existing at the time of legislation.16. Therefore, due importance must be
given to the legislative history, context and background.17. If the words are not plain and unambiguous, reference to the previous
legislative provision may be warranted.18.
31. Circulars, Forms and Interpretation by the Income-tax Authorities.—

Circulars or general directions issued by the Central Board of Direct Taxes would be binding under s 119 on all officers and
persons employed in the execution of the Act,19. but they cannot bind the appellate authority, the tribunal, the court or the
assessee.20. The Board cannot pre-empt a judicial interpretation of the scope and ambit of a provision of the Act by a circular, as
the task of inter-pretation of laws is the exclusive domain of the court.21. Circulars may be utilised to understand the scope and
meaning of the provision to which they relate.22. These circulars, or the interpretations of provisions of the Act by the CBDT or
the Income-tax Department are in the nature of contemporanea expositio furnishing legitimate aid in the construction of a
provision.23.
Circulars are issued by CBDT to explain or tone down the rigours of law and to ensure fair enforcement of its provisions. These
circulars have the force of law and are binding on the income-tax authorities, though they cannot be enforced adversely against
the assessee. Normally, these circulars cannot be ignored. If by a Circular, the Department has set down a standard for itself, the
Department is bound by that standard and cannot act with discrimination (sic).24.
A circular may not override or detract from the provisions of the Act but it can seek to mitigate the rigour of a particular provision
for the benefit of the assessee in certain specified circumstances. So long as the circular is in force, it aids the uniform and proper
administration and application of the provisions of the Act.25.
A form prescribed by the rules cannot qualify a statutory provision or impose a time limit that the statute does not provide.26. A
form prescribed under the Rules can never have any effect on the interpretation or operation of the parent statute.27. Further,
regardless of the practice of the Department and the directions for the guidance of officials contained in the Income-tax Manual,
the court should put its own construction upon the provisions of the Act.28. Executive instructions can supplement a statute or
cover areas to which the statute does not extend, but they cannot run contrary to statutory provisions or whittle down their
effect.29. Needless to say, clarificatory notes or press releases and notifications issued by the Government or the Board have no
legal force.30.
32. Speech of a Minister or other Parliamentary Material.—

In order to find out the legislative intent,31. or to ascertain the object or purpose behind the legislation,32. the speech made by
the Minister or the mover of the Bill can be taken into consideration.33. It is relevant insofar as it gives the background for the
introduction of a particular provision in the Act. It is not determinative of the construction of the said provision and only gives the
reader an idea as to what was in the Minister's mind when he sought to introduce the said provision.34. But, in the absence of
ambiguity in a provision, the speech of the Minister cannot be used as an aid to the interpretation of a provision.35. The opinion
tendered by the Law Ministry as well as the reply of the Minister to a question before Parliament are not relevant and obviously
cannot be treated to be binding on the courts.36. In the words of the House of Lords, the rule excluding reference to
Parliamentary material as an aid to statutory construction should be relaxed so as to permit such reference '…where (a) legislation
is ambiguous or obscure, or leads to an absurdity; (b) the material relied upon consists of one or more statements by a minister
or other promoter of the Bill together if necessary with such other Parliamentary material as is necessary to understand such
statements and their effect; (c) the statements relied upon are clear.'37.
Statement of Objects and Reasons, Explanatory Memorandum and Notes, Drafts of Bills and Reports of Commissions.—
It is permissible to look into the Statement of Objects and Reasons of the Bill for the limited purpose of appreciating the
background and the antecedent factual matrix leading to the legislation.38. The Statement of Objects and Reasons can also be
looked into for the purpose of finding out the intention of the legislature and to interpret and determine the true scope of the
provision,39. but only if the provision is ambiguous.40. The draft of a Bill which is afterwards enacted into an Act and the report of
a Commission or Select Committee appointed to deal with the subject, are not admissible as aids in construing the provisions of
the Act,41. but they or the Statement of Objects and Reasons may be referred to for the limited purpose of ascertaining the
conditions prevailing at the time and the extent and urgency of the evil sought to be remedied.42. These factors will enable the
court to ascertain whether the amendment is intended to be applied prospectively or retrospectively, even if the amendment is
said to be clarifcatory.43.
The Memorandum explaining the provisions of a Bill is usually not an accurate guide of the final Act,44. but may still be used for
the above-mentioned limited purposes.45. Where the provisions are unambiguous, there is no warrant for resort to external aids
of interpretation such as the Notes on Clauses of the Finance Bill, and the Memorandum explaining its provisions.46. However, in
cases of doubt or difficulties, these may be useful to ascertain the intention of the legislature.47. Where a particular enactment or
amendment is the result of the recommendation of the Law Commission of India, it is permissible to refer to the relevant report
of the Commission.48.
33. Previous Judicial Interpretation or Legislation.—

This being a consolidating and amending Act, the law is to be ascertained by interpreting the language used in the Act in its
natural meaning, uninfluenced by considerations derived from the previous state of the law;49. but in cases of doubt regarding
the construction, assistance may be sought from previous judicial interpretation of a term,50. or from previous legislation,51. or by
adverting to the mischief intended to be suppressed.52. When legislation follows a continuous practice and repeats the very words
on which that practice is founded, it may be inferred that the legislature in re-enacting the statute intended those words to be
understood in their received meanings.53. Similarly, it must be assumed that while enacting a law, Parliament was aware of the
meaning placed by the court on certain words, and in repeating those words, Parliament intended them to bear the same
meaning.54. But from the fact that for a period of years a debated phrase has been used and applied by the taxing authorities in a
certain sense, the court will not infer that the attributed sense has been silently adopted by the legislature.55.
34. Provisions of other Statutes and Subsequent Enactments.—
The words and expressions defined in one statute as judicially interpreted do not afford a guide to the construction of the same
words or expressions in another statute56. unless both the statutes are pari materia legislations or it is specifically provided in
one statute to give the same meaning to the words as defined in another statute.57. Therefore, in fiscal statutes, unless the
context otherwise warrants, the same expression occurring in different enactments should be assigned the same meaning where
the colour, content and context of such statutes are the same or similar. 58. Resort to a different provision of another Act may also
be permissible in the absence of a definition or where the term is of a technical nature.59. When a single section of an Act of
Parliament is introduced into another Act, it must be read in the sense it bore in the original Act from which it was taken, and
consequently it is perfectly legitimate to refer to all the rest of that Act in order to ascertain what the section means, though
those other sections are not incorporated in the new Act.60. A subsequent enactment affords no useful guide to the
interpretation of the earlier law, unless it is on the same subject and the earlier law is ambiguous. 61. The distinction drawn
between mineral fuels and mineral oils in the Customs and Central Excise Tariff Acts cannot be imported into the Income-tax Act
which makes no such distinction.62.
Integrated Scheme of Direct Taxes.—
The Act should be construed in the light of the other statutes, including the Gift-tax Act, 1958, which deal with direct taxes and
which, together with this Act, form an integrated scheme of taxation; such an approach would rightly avoid the same amount
being charged in the hands of the assessee both to gift-tax and to tax under this Act as notional capital gains.63. The other
statutes referred to in this Act may also be looked at for assistance in interpretation.64.
Incorporation by Reference.—
Where a later statute incorporates provisions of a former statute by reference, the later statute is read in a manner as if the
provisions of the former statute were "bodily transposed into it".65. This rule would also be equally applicable while interpreting
the provisions of a statute which incorporates by reference other provisions of the same statute.66.
35. Dictionary Meaning.—

When a word is not defined in the Act it may be permissible to refer it to the dictionary to find out the meaning of that word as it
is understood in the common parlance. But where the dictionary gives divergent or more than one meaning of a word, in that
case it is not safe to construe the said word according to the suggested dictionary meaning of that word. In such a situation the
word has to be construed in the context of the provisions of the Act and regard must also be had to the legislative history of the
provisions of the Act and the scheme of the Act.67. [See also, 'Definition clause and undefined words'.]
In taxing statutes, the dictionary meaning cannot always be relied on. The word must be understood in its common parlance,
especially in the commercial circles. In interpreting words and phrases in taxing statutes, the popular meaning that the people
conversant with the subject-matter would attribute to the word must be given prominence.68. In the case of a word or an
expression which relates to an article which is commonly used in commerce, the meaning in which commercial man usually
dealing with the subject-matter understand the word or expression is required to be taken into consideration and often that
meaning is to be applied.69.
INTERNAL AIDS TO CONSTRUCTION

36. Provisos.—
The normal function of a proviso is to carve out or except something out of the enactment or to qualify something enacted
therein which but for the proviso would be within the purview of the enactment.70. A proviso cannot be held to control the
substantive enactment or to withdraw by mere implication any part of what the main provision has given or to set at naught the
real object of the main enactment.71. A proviso is not applicable unless the substantive clause is applicable to the facts of the case:
'the proper function of a proviso is to except and deal with a case which would otherwise fall within the general language of the
main enactment, and its effect is confined to that case'. 72. But a proviso may be read as an independent substantive enactment
where the context warrants such a construction,73.e.g. where restricting its scope to the cases dealt with by the main enactment
would render the proviso meaningless.74. 'Whether a proviso is construed as restricting the main provision or as a substantive
clause, it cannot be divorced from the provision to which it stands as a proviso. It must be construed harmoniously with the main
enactment'.75. A proviso which is inserted to remedy unintended consequences and to make the provision workable, a proviso
which supplies an obvious omission in the section and is required to be read into the section to give the section a reasonable
interpretation or which is declaratory in nature, requires to be treated as retrospective in operation, so that a reasonable
interpretation can be given to the section as a whole.76.
A proviso may serve four different purposes:
(1) qualifying or excepting certain provisions from the main enactment;

(2) it may entirely change the very concept of the intendment of the enactment by insisting on certain mandatory conditions to
be fulfilled in order to make the enactment workable;
(3) it maybe so embedded in the Act itself as to become an integral part of the enactment and thus acquire the tenor and colour
of the substantive enactment itself; and
(4) it maybe used merely to act as an optional addenda to the enactment with the sole object of explaining the real intendment
of the statutory provision.77.
37. Explanations.—
An Explanation to a statutory provision may fulfill the purpose of clearing up an ambiguity in the main provision or an Explanation
can add to and widen the scope of the main section. If it is clarificatory in nature, then the Explanation must be read into the main
provision with effect from the time the main provision came into force. But if it changes the law, it is not presumed to be
retrospective irrespective of the fact that the phrase used is "it is declared" or "for removal of doubts".78.
The object of an Explanation has been explained in an earlier case79. as follows:—
(a) to explain the meaning and intendment of the Act itself,

(b) where there is any obscurity or vagueness in the main enactment, to clarify the same so as to make it consistent with the
dominant object which it seems to subserve,
(c) to provide an additional support to the dominant object of the Act in order to make it meaningful and purposeful,
(d) an Explanation cannot in any way interfere with or change the enactment or any part thereof but where some gap is left
which is relevant for the purpose of the Explanation, in order to suppress the mischief and advance the object of the Act it can
help or assist the Court in interpreting the true purport and intendment of the enactment, and
(e) it cannot, however, take away a statutory right with which any person under a statute has been clothed or set at naught the
working of an Act by becoming an hindrance in the interpretation of the same.
An Explanation is intended to either explain the meaning80. of certain phrases and expressions contained in a statutory provision
or, depending upon its language, to take away something from the content of a provision, and at times, by way of abundant
caution, to clear any doubt regarding the meaning of a statutory provision.81. Ordinarily, an Explanation is not a substantive
provision and is inserted to clear up any ambiguity in the section82. and it should be so read as to harmonise it with the section83.
because it is an integral part of the section and has no independent existence apart from the section.84. Such explanations are
intended more as a legislative exposition85. or clarification of the existing law than as an amendment or change in it.86. But cannot
be construed to override statute or render the substance and core nugatory.87. Explanation is not to enlarge the scope of the
original section that it is supposed to explain, if on a true reading of an explanation it appears that it has widened the scope of the
main section, effect should be given to the legislative intent notwithstanding the fact that the Legislature named that provision as
an explanation.88. In rare cases, it may even widen the scope of the main provision.89. But merely because a provision attached to
a section bears the nomenclature 'Explanation', it cannot always be considered as conveying the true and natural meaning of the
words or the provisions of the statute.90. An Explanation has to be read and understood only in the context for which it has been
introduced and cannot be expanded to bring within its fold aspects beyond the realm of the provision.1.
An explanation brought on the statute book is ordinarily clarificatory in nature and has retrospective effect, as the explanation so
brought to a provision in the statute simply explains the law as it has always been in the main provision.2. However, when the
legislature has made the explanation operative prospectively by words expressed therein, its operation shall have to be confined
to the future date. The same reasoning would govern the case when Parliament limits the retrospectivity of the explanation with
effect from a particular date.3.
38. Non Obstante Clauses.—

A clause beginning with 'notwithstanding anything' is some-times appended to a section in the beginning with a view to give the
enacting part of the section, in case of conflict, an overriding effect over the provisions of the Act mentioned in the non obstante
clause. A non obstante clause may be used as a legislative device to modify the ambit of the provision of law mentioned in the
non obstante clause or to override it in specified circumstances. The true effect of the non obstante clause is that in spite of the
provision or Act mentioned therein the enactment following it will have full operation or that the provisions embraced in the non
obstante clause will not be an impediment for the operation of the enactment.4. The scope and purport of a non obstante clause
has to be ascertained by reading it in the context of the provisions and consistent with the scheme of the enactment.5.
39. Marginal Notes and Headings.—

Marginal notes to the sections or headings cannot control the construction of the statute,6. but they may throw light on the
intention of the legislature.7.
40. Punctuation.—
Punctuation may assist in arriving at the correct construction,8. but it cannot control the clear meaning9. of a statutory provision.
Punctuation, in any case, is a minor element in the construction of a statute.10. Only when a statute is carefully punctuated and
there is doubt about its meaning, should weight undoubtedly be given to punctuation.11.
41. Definition Clause and Undefined Words.—

Where a statute defines a particular word, the same should, unless the context otherwise requires, be construed in the same
manner and be given the same meaning.12. However, a definition or interpretation clause that extends the meaning of a word
should not be construed as taking away its ordinary meaning.13. Further, such a clause should be so interpreted as not to destroy
the basic concept or essential meaning of the expression defined, unless there are compelling words to the contrary.14. Definitions
given in the definition clause no doubt ordinarily have to be given their weight, but if the context otherwise requires, it is
necessary to interpret the expression defined in a different way.15. The context, therefore, has to be given due regard and must
not be ignored to avoid absurdities.16. One cannot give an expression a meaning which would make the provision superfluous.17.
Words used in the sections of the Act are presumed to have been used correctly and exactly as defined in the Act, and it is for
those who assert the contrary to show that there is something repugnant in the subject or context.18. They are also presumed to
have been used deliberately, with a purpose, and that purpose must be effectuated. 19. Words that are not specifically defined
must be taken in their legal sense20. or their dictionary meaning21. or their popular or common or commercial sense as distinct
from their scientific or technical meaning,22. unless a contrary intention appears; or their meaning may depend upon the context
in which they are used.23. No individual word can be considered in isolation—its meaning has to be determined by other words in
the section in which it occurs.24. The same word occurring more than once in the Act should generally be given the same
meaning, but the context may indicate the contrary legislative intention.25. But one word occurring in different sections of the
same Act can have different meanings if the objects of the sections are different and they operate in different fields.26.
Accounting terminologies understood and defined by statutorily recognised institutes, such as the ICAI, can be relied upon.27.
(a) Judicially Defined Words.—
When words acquire a particular meaning or sense because of their authoritative construction by superior courts, they are
presumed to have been used in the same sense when used in a subsequent legislation in the same or similar context.28. The same
rule applies to words with well-known legal meanings, even though they have not been the subject of judicial interpretation.29.
But the words and expressions defined in one statute as judicially interpreted do not afford a guide to the construction of the
same words or expressions in another statute unless both the statutes are pari materia legislations or it is specifically provided in
one statute to give the same meaning to the words as defined in another statute.30.
(b) Rule of Ejusdem Generis.—

The rule of ejusdem generis is intended to be applied where general words have been used following particular and specific words
of the same nature.31. The rule of ejusdem generis applies when (1) the statute contains an enumeration of specific words, (2) the
subject of enumeration construes a class or category, (3) that class or category is not exhausted by the enumeration, (4) the
general terms following the enumeration, and (5) there is no indication of a different legislative intent.32. It serves to restrict the
meaning of the general words to things or matters of the same genus as the preceding particular words.33. For the invocation of
the rule there must be one distinct genus or category. The specific words must apply not to different objects of a widely varying
character but to words that convey things or objects of one class or kind. Where this generic unity is absent the rule cannot
apply.34. Thus, the restricted meaning has to be given to words of general import only where the context of the whole scheme of
legislation requires it.35. The application of this rule was also considered in the undermentioned cases.36.
Reference may also be made to the classic passages on the canons of construction, reproduced at length ante under 'Some
Judicial Observations'.
(c) Rule of Noscitur a Sociis.—
The rule of noscitur a sociis is to construe the words or a phrase in an enactment in the light of the surrounding text. In the
context of a central excise case, the Supreme Court laid down the following broad principles:
(i) does a particular word or expression have more than one meaning attributed to it? Based on the setting or the context, could
one apply a narrower or wider meaning?
(ii) are the words or terms used found in a group totally "dissimilar" or is there a "common thread" running through them? and
(iii) what is the purpose behind the insertion of the term?37.
Noscitur a sociis is a well accepted principle for interpretation of entries in a taxing statute. Any commodity mentioned in any
entry gets its colour from the commodities or things mentioned either before or after the particular item for the purpose of
assigning it a correct meaning.38. This rule as been applied in several income-tax cases.39.
PRECEDENTS
42. Binding force of a Supreme Court Judgment.—
The following propositions are well-settled with regard to the binding nature of a judgment of the Supreme Court:
(i) Under art 141 of the Constitution, 'The law declared by the Supreme Court shall be binding on all courts within the territory
of India'. Once there is a pronouncement of the highest Court of the land, the same is binding on all courts, tribunals and all
authorities in view of this article.40. If the Supreme Court has construed the meaning of a section, then any decision to the
contrary given by any other authority must be held to be erroneous and such error must be treated as an error apparent on
the record.41.
(ii) Needless to say, a judgment of the Supreme Court is binding on all High Courts.42. But it is the principle laid down in the
judgment, and not every word appearing therein, that becomes the law of the land.43. Further, art 141 will not be attracted if
law is not declared or stated vocally to support the conclusion reached for deciding the lis; because a conclusion may be on
facts—it may not and does not necessarily involve consideration of law.44.
(iii) When the Supreme Court declares the law and holds either a particular levy to be valid or invalid, the law laid down by the
Supreme Court in that judgment would bind not only those parties who were before the court but also others in respect of
whom appeal had not been filed.45.
(iv) In case of conflict between the decisions of the Supreme Court, the decision of the larger bench should be followed.46.
Between two decisions of benches of equal strength of the Supreme Court, the later decision should be followed,47. provided
the earlier decision is considered.48.
(v) The decision of a Constitution Bench of the Supreme Court binds a division bench of that Court, regardless of doubts about
its correctness.49. Further, a division bench of the Supreme Court should also follow a decision of a bench of three judges.50.
(vi) The decision in a judgment of the Supreme Court cannot be assailed on the ground that certain aspects were not considered
or the relevant provisions were not brought to the notice of the Court.51.
(vii) A judgment of the High Court which refuses to follow the decision and directions of the Supreme Court or seeks to revive a
decision of the High Court which had been set aside by the Supreme Court is a nullity.52.
(a) Reconsideration and Overruling.—
A larger bench of the Supreme Court may re-consider and overrule a decision of a smaller bench;53. but normally only if it is
clearly erroneous and not otherwise.54. If a bench feels that a decision of a co-ordinate or larger55. bench is erroneous, it should
not express its dissent but may refer the matter to a larger bench,56. as the Supreme Court held in UOI v Raghubir Singh,57.
where the law on the topic has been exhaustively examined. However, the only situation when a bench of two judges may refer a
matter directly to a Constitution Bench is when the provisions of art 145(3) are attracted.58.
(b) Acceptance or Rejection of Petition for Special Leave to Appeal.—

The Supreme Court has elaborately dealt with the effect of acceptance or rejection of a special leave petition in Kunhayammed v
State of Kerala,59. and has held that when there is a refusal of special leave to appeal in a non-speaking order, ie, an order that
does not assign reasons for the dismissal of the special leave petition, it does not amount to a declaration of the law as laid down
by the Supreme Court, since there is no law that has been declared. On the other hand, if the refusal is in the form of a speaking
order, it then becomes a declaration of law within the meaning of art 141 of the Constitution binding not only on the parties but
also on all judicial fora in the country. In either case, the doctrine of merger, which would effectuate the merger of the decision of
the lower court with the Supreme Court order, is not attracted. But once special leave to appeal from an order has been granted
by the Supreme Court, the order passed thereafter by the Supreme Court would be an appellate order and would then attract the
doctrine of merger; whether the order reverses, modifies or affirms the decision of the lower court, and whether it is a speaking or
non-speaking order.
Thus, the mere fact that the Supreme Court refuses to grant special leave to appeal against a judgment does not necessarily
imply that it accepts that judgment as correct,60. though in the circumstances of a case such an inference may be permissible.61.
Conversely, the mere filing of a special leave petition or grant of leave to appeal or pendency of appeal against the High Court's
judgment does not denude that judgment of its binding effect.62.
In a recent decision, the Supreme Court,63. after considering all decisions on this issue summarized the above proposition in the
following manner:
(i) Dismissal at the stage of special leave petition - without reasons - no res judicata, no merger.
(ii) Dismissal of the special leave petition by speaking or reasoned order - no merger, but rule of discipline and Art. 141 attracted.
(iii) Leave granted - dismissal without reasons - merger results.
(c) Civil Appeal.—

In cases where appeals other than those under art 136 are dismissed, even by a non-speaking order, the doctrine of merger
applies, and the Supreme Court upholds the decision of the High Court or tribunal from which the appeal arose.64.
The dismissal of a SLP or even an appeal, when the tax demand is below a threshold (as pre-scribed by a CBDT circular) does not
mean that there is a 'merger'.65. It also does not mean that the High Courts' view was approved. In most cases, the Supreme
Court dismisses the SLP or the appeal, expressly leaving the question of law open. Even if it does not expressly leave the question
of law open, the Supreme Court cannot be taken to have ruled on the question.
43. Binding force of a High Court Judgment.—

A decision of a High Court would have binding force in the state in which the court has jurisdiction,66. but not outside that
state.67. Decisions of the High Court are binding on the subordinate courts, authorities and tribunal situated within its
jurisdictional territory.68. It will also be just and proper for the tribunal to follow a decision of a different High Court when there is
no contrary decision of another High Court.69. Thus, if a High Court has held a provision of this Act to be unconstitutional and
there is no contrary decision of another High Court, the tribunal acting anywhere in the country should proceed on the basis that
that statutory provision is non-existent; in doing so the tribunal is not itself deciding upon the constitutionality of that
provision.70.
A decision of one High Court is not binding on another High Court and is, at best, only persuasive. However, a decision of
another High Court rendered in the context of an all India Act would have persuasive value and, to maintain uniformity and
certainty, one should adopt the view of the other High Court.71. When the judgment of jurisdictional High Court is available, the
same should be followed and one cannot deviate merely because another view is has been taken by another High Court.72. But
where there are conflicting decisions of High Courts, other than the one under whose jurisdiction the tribunal is acting, it should
proceed on the basis that the provision is valid.73. Further, in view of such conflicting decisions, the High Court would also
proceed on the basis that the provision is valid.74. Where there are contrary decisions of different High Courts, and the Supreme
Court approves of one, then the other contrary decisions must be taken as not approved.75.
The position in regard to the binding nature of the decisions of a High Court on different Benches of the same court may be
summed up thus: A single judge of a High Court cannot give a decision contrary to an earlier judgment of a single judge76. or a
larger bench77. of the same High Court. A division bench of a High Court should follow the decision of another division bench or
a Full Bench of the same High Court;78. and where there are conflicting decisions of courts of co-ordinate jurisdiction, the later
decision is to be preferred if reached after full consideration of the earlier decisions.79. Further, judicial propriety requires a single
judge or a division bench of the High Court to refer the matter to a larger bench if it is unable to agree with the enunciation
made by an earlier bench of co-ordinate jurisdiction.80.
Uniformity of Construction.—
In CIT v Thana Electricity Supply Ltd,81. the Bombay High Court, reviewing the statutory provisions and the earlier decisions, held
that a judgment of one High Court cannot be given the status of a binding precedent so far as other High Courts are concerned,
and observed that the fact that there is only one decision of any one High Court on a particular point or that a number of
different High courts have taken identical views in that regard is not at all relevant.82. The doctrine of maintaining the
homogeneity of judgments is not an inflexible doctrine, and a court must apply its mind to the correct, proper and legal meaning
of a particular word, phrase or expression used in the section rather than mechanically follow another decision.83. This view gains
support from a conjoint reading of ss 257 and 260 of the Act, which show that the Act itself contemplates independent decisions
of various High Courts on a question of law. The Act has visualised the possibility of conflict of opinion between different High
Courts on the same question of law and has also made specific provisions to take care of such a situation in suitable cases. In fact,
in the light of the clear language of s 260 of the Act, every High Court is required to give its own opinion on a particular question
of law. It should not follow the decision of another High Court only with a view to achieve uniformity in the matter of
interpretation, if such decision is contrary to its own opinion.84.
The view prevailing earlier was that this being an all-India statute, uniformity of construction by the various High Courts is
eminently desirable, and the considered opinion of another High Court should be followed unless there are overriding reasons for
taking a divergent view;85. and that the principle of stare decisis ('let it stand as decided') should also be borne in mind.86.
The principles stated above equally apply to the AAR. The Delhi High Court87. observed that consistency is a necessary facet of art
14 of the Constitution, and that the equal protection clause would necessarily imply that judicial authorities interpreting the law
must also follow a consistent view.
44. Reliance on Decisions.—

A precedent is an authority only for what it actually decides and not for what may remotely or even logically follow from it; and a
decision on a question that has not been argued cannot be treated as a precedent.88. Judgments must be read as a whole and
observations in judgments should be considered in the context in which they are made and in the light of the questions that were
before the court.89. In CIT v Sun Engineering Works Pvt Ltd,90. the Supreme Court observed:
It is n eith er desirab le n o r p ermissib le to p ick o u t a w o rd o r a sen ten ce fro m th e ju dgmen t o f th e Su p reme Co u rt divo rced fro m th e co n text
o f th e qu estio n u n der co n sideratio n an d treat it to b e th e co mp lete law declared b y th e co u rt. Th e ju dgmen t mu st b e read as a w h o le an d
th e o b servatio n s fro m th e ju dgmen t h ave to b e co n sidered in th e ligh t o f th e qu estio n s w h ich w ere b efo re th e co u rt. A decisio n o f th e
Su p reme Co u rt takes its co lo u r fro m th e qu estio n s in vo lved in th e case in w h ich it is ren dered an d, w h ile ap p lyin g th e decisio n to a later
case, co u rts mu st carefu lly try to ascertain th e tru e p rin cip le laid do w n b y th e decisio n .
To lift a sentence from a judgment, as if it is an independent provision in a statute and emphasise it as declaring the law, will
result in unanticipated and unexpected consequences.91. Further, if there is any doubt about the decision, the entire judgment
has to be considered, and a stray sentence or a casual remark cannot be treated as a decision.92.
Reliance should not be placed on a decision without discussing how the factual situation fits in with the factual situation of the
decision on which reliance is placed.93. Circumstantial flexibility, e.g. one additional or different fact, may make a world of
difference between conclusions in two cases.1. Interim orders passed by courts on certain considerations are not precedents even
for cases that may have similar facts.2.
Caution must be exercised in relying upon any decision under a different legislation, but where the context and purpose under
two different legislations have an intersecting point on any particular aspect, aid can be drawn from judicial proclamations under
the other Act, though only to the extent of that particular common ground.3. But when the language of the statute is plain and
unambiguous, the width of its meaning cannot be cut down by importing the principles laid down in cases decided under other
statutes in the background of facts which are wholly dissimilar.4.
45. Ratio Decidendi, Obiter Dicta and Casual Observations.—

Two questions may arise before a court for its determination. The court may determine both, although only one of them may be
necessary for the ultimate decision of the case. The question which was necessary for the determination of the case would be the
ratio; the opinion of the court on the question which was not necessary to decide the case would be only an obiter dictum. In
other words, the question or issue discussed and decided by the court on which its final judgment is based is known as the ratio
decidendi of that judgment. It is the ratio that is binding on all lower courts and tribunals and on other equal benches of the
same court or tribunal has precedential value. The Black's Law Dictionary defines 'obiter' as a judicial comment made while
delivering a judicial opinion, but one that is unnecessary to the decision in the case and therefore not precedential, although it
may be considered persuasive.5.
In India, it is well settled that an obiter of the Supreme Court is not binding on the Supreme Court itself, although it does have
clear persuasive authority.6. However, there have been divergent views on whether obiter dicta of the Supreme Court are binding
on lower courts. Article 141 states that the law declared by the Supreme Court is binding on all lower judicial fora.
Some judgments have held that statements which are not part of the ratio decidendi are not authoritative on any court in
India.7. These line of cases are based on the principle that obiter is not "law" declared by the Supreme Court and on the view that
the scope and authority of a precedent should not be expended beyond what was actually at issue before the judge.8. On the
other hand, it has been held that the obiter dicta of the Supreme Court is binding on the High Courts and other subordinate
courts in two circumstances: (i) in the absence of a direct pronouncement on that question elsewhere by the Supreme Court;9.
and (ii) when an opinion was expressed by the Supreme Court on a question that arose for its determination, even if that
particular question was not necessary to the decision.10. It is submitted that the latter view is now more generally accepted.11.
But where the views of the Supreme Court are in conflict with the ratio of the same or an-
other decision of the Supreme Court, the ratio should be followed in preference to the obiter dicta.12.
It is well settled though that mere casual statements or observations also do not carry any weight and are not binding on any
court. A casual expression or statement is different from an obiter dictum. Obiter is a question determined by the Court, after
submissions were made on the aspect, which is finally found not relevant to the determination of the case itself. A casual
observation is the expression of the personal view or opinion of the Judge made whilst deviating from answering the actual issues
pending before the Court. These casual remarks are treated as beyond the ambit of the authoritative or operative part of the
judgment and hence are not binding.13.
46. Circumstances that Destroy or Weaken the Binding Force of a Precedent.—

A precedent loses all or some of its binding force in the following circumstances:14.
(i) if it is reversed or overruled by a higher court—reversal occurs when the same decision is taken on appeal and is reversed by
the higher court, while overruling occurs when the higher court declares in another case that the earlier case was wrongly
decided;
(ii) when it is affirmed or reversed on a different ground, depending on the circumstances of such affirmation or reversal;
(iii) when the legislature enacts a statute that is inconsistent with the precedent;
(iv) when it is inconsistent with the earlier decisions of a higher court or a court of the same rank;
(v) if it is a precedent sub silentio or not fully argued;
(vi) when it is rendered per incuriam, ie, in ignorance of a statutory provision or binding precedent15. —however, the rule of per
incuriam is of limited application, and if the provision of the Act was noticed and considered, then the judgment cannot be
ignored as being per incuriam merely on the ground that it has erroneously reached the conclusion;16. and
(vii) when it is an erroneous decision, ie, a decision conflicting with the fundamental principles of law.
The binding nature of a decision is of two types: one is in relation to the facts and the other is in relation to the principles of law.
A principle of law declared would be treated as a precedent and binding on all. The findings of fact would bind only the parties to
the decision but the principle of law declared will be binding as a precedent.17.
47. Tribunal Orders.—

The MP High Court in Agrawal Warehousing and Leasing Ltd v CIT,18. has held that the orders passed by the tribunal are
binding on all the tax authorities functioning under the jurisdiction of the tribunal. While so holding, it followed the decision of the
Supreme Court in UOI v Kamlakshi Finance Corporation Ltd,19. which has ruled thus:
"Th e p rin cip les o f ju dicial discip lin e requ ire th at th e o rders o f th e h igh er ap p ellate au th o rities sh o u ld b e fo llo w ed u n reservedly b y th e
su b o rdin ate au th o rities. Th e mere fact th at th e o rder o f th e ap p ellate au th o rity is n o t 'accep tab le' to th e Dep artmen t— in itself an
o b jectio n ab le p h rase— an d is th e su b ject-matter o f an ap p eal can fu rn ish n o gro u n d fo r n o t fo llo w in g it u n less its o p eratio n h as b een
su sp en ded b y a co mp eten t co u rt. If th is h ealth y ru le is n o t fo llo w ed, th e resu lt w ill o n ly b e u n du e h arassmen t to assessees an d ch ao s in
admin istratio n o f tax law s."
The judicial convention well-settled in the tribunal is to regard a full bench or a special bench order of the tribunal as binding on
the other benches. Carrying this principle further, the Gujarat High Court in Sayaji Iron and Engineering Co v CIT,20. reiterated
that no tribunal of fact has any right or jurisdiction to come to a conclusion entirely contrary to the one reached by another
bench of the same tribunal on the same facts, and if a bench of a tribunal on identical facts is allowed to come to a conclusion
directly opposed to the conclusion reached by another bench of the tribunal on an earlier occasion, that will be destructive of the
institutional integrity itself. If the tribunal wants to take an opinion different from the one taken by an earlier bench, it should
place the matter before the President of the tribunal so that he could have the case referred to a full bench of the tribunal
consisting of three or more members for which there is a provision in the Act.21.
48. Res-Judicata.—
The principle of res judicata does not apply to income-tax proceedings and each assessment year is an independent year in itself.
But where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the
other and parties have allowed that position to be sustained by not challenging the order, it would not at all be appropriate to
allow the position to be changed in a subsequent year. 22. Therefore, in the absence of any valid and convincing reason, if same
issue has not been pursued by the Revenue in appeal, there is no justification as to why such principles on res-judicata should not
apply.23. But in tax cases relating to a subsequent year involving the same issue as an earlier year, the court can differ from the
view expressed if the case is distinguishable or per incuriam.24. The principles of res-judicata will not apply only if the Revenue is
able to establish compelling reasons for a departure from settled position.25. There should be a finality attached to the issue once
it stands decided by the higher courts on the merits.26. The Revenue should not be allowed to flip-flop on the issue.27.
An important but relatively unknown judgment is the decision of the Delhi High Court which considered several decisions on
whether res judicata or estoppel will apply in tax matters.28. It then held that the Department should not be permitted to take a
different stand from its earlier view unless there are good or cogent reasons for a change in its view. It then enu-merated the
following factors:-
(i) If the facts are different or further and fresh facts are brought on record; or
(ii) if the process of manufacturer has changed (this was a central excise case); or
(iii) if the relevant entries in the Tariff have undergone a modification; or
(iv) if, subsequent to the earlier decision, there has been a pronouncement of a High Court or the Supreme which necessitates
reconsideration of the issue.
The above principles will apply mutatis mutandis to income-tax proceedings as well. The Full Bench of the Madras High Court
pointed out that if there are no fresh facts, the ITO cannot arbitrarily or capriciously set aside the orders of its predecessor based
on enquiry.29.
GENERAL
49. Burden of Proof.—
Since this Act lays a general tax on the whole population, the presumption is of equality of the incidence of tax rather than of
exemption of a few. 30. The burden is on the revenue authorities to show that a receipt constitutes income and that the income is
liable to tax under the statute, but the onus of showing that a particular class of income is exempt from taxation lies on the
assessee.31. [See further post 'Burden of proof' under s 143(3).]
50. The Act is Exhaustive.—

The Act is 'a self-contained code exhaustive of the matters dealt with therein'.32. As the Privy Council observed in CIT v The
Tribune Trust,33. this Act 'exhaustively defines the obligations and remedies of the taxpayer'. [See post under s 293, 'Bar of suit to
set aside or modify assessment'.] But a question of validity or vires of a provision of this Act cannot be decided by any of the
authorities under the Act. [See post under s 256, 'Question regarding validity of any provision of the Act'.]
Further, nothing in this Act can override the power of the Supreme Court under art 32 of the Constitution, and of the High
Courts under art 226 of the Constitution, to issue, in appropriate cases, writs in the nature of certiorari, prohibition or mandamus
or other directions or orders. [See post under s 293, 'Writs, directions and orders under Constitution'.]
51. Delegated Legislation under the Act.—

Legislation made by an authority in exercise of legislative powers conferred upon it by the legislature is delegated or subordinate
legislation. A Full Bench of the Supreme Court in Assam Co v State of Assam,34. reiterated the well-settled principle that the
power to make delegated legislation under an Act is derived from the enabling provision found in such Act; therefore, it is
fundamental that a delegate on whom such power is conferred has to act within the limits of the authority conferred by the Act,
and cannot enlarge the scope of the Act or override the Act either by exceeding the authority conferred upon it or by making a
provision that is inconsistent with the Act. No tax can be imposed by any rule or bylaw or regulation unless the statute specifically
authorises the imposition.35.
In Indian Express Newspapers v UOI,36. the Supreme Court observed that delegated legislation could be questioned not only on
any of the grounds on which plenary legislation may be questioned, but also on the grounds that it is contrary to the parent
statute or some other statute, or that it is unreasonable or manifestly arbitrary. The court reiterated that a piece of delegated
legislation 'does not carry the same degree of immunity which is enjoyed by a statute passed by a competent legislature'. The
multi-faceted personality and the innumerable disguises of delegated legislation have prompted an eminent jurist to observe:37.
'Delegated legislation is an expression which covers a multitude of confusion. It is an excuse for the legislators, a shield for the
administrators and a provocation to the constitutional jurist.'
52. Rules, Notifications and Executive Instructions.—
Rules made under the Act must be treated as if they are in the Act and have the same force as the sections in the Act.38. Even so,
they continue to remain delegated legislation,39. and no exercise of the rule-making power can affect, control, enlarge or detract
from the full operative effect of the provisions of the schedules40. or sections; any rule which purports to do so would be ultra
vires and void even though the statute provides that it shall have effect as if enacted in that statute.41. The same observations
apply equally to forms prescribed by rules.42. Rules may even be read down if necessary.43. Further, rules can be resorted to for
the purpose of construing the provisions of the statute only where the provisions are ambiguous or doubtful and a particular
construction has been put upon the statute by the rules.44.
A wrong reference to the power under which an authority makes rules or issues notifications would not per se vitiate that action if
it could be justified under some other power under which the authority could lawfully do that act.45. Failure to comply with mere
formal requirements of a rule may not destroy a substantive right created by the Act.46. The authority which has the power to
issue a notification has the inherent power to rescind it,47. but it cannot sub-delegate this power unless specifically permitted by
the statute.48.
When the word 'prescribed' is used in an enactment, it should always be construed to mean 'prescribed by rules' made by the
rule-making authority; and in the absence of any such rules, an administrative decision of the Board cannot be read into the rules
as being part thereof.49.
An order or a rule or a notification takes effect not when made, but when made known i.e. published or promulgated in some
suitable manner;50. thus, mere printing of the Official Gazette without making the same available to the public would not
suffice.51. A rule may apply for the whole accounting year if it was in force on the first day of the relevant assessment year.52. The
operation of a notification has to be judged not by the object of the government but by the words used therein,53. and a
notification that has the effect of curtailing the scope of a deduction granted by the Act54. or imposing a tax without the authority
of law55. will unques-tionably be invalid. Further, a notification issued under a statute, also being a 'law' as defined under art 13 of
the Constitution, is liable to be struck down if it violates any of the fundamental rights.56.
Executive instructions can supplement a statute, but cannot run contrary to statutory provisions or whittle down their effect.57.
The expressions in the Schedules to an Act and in the notifications issued thereunder for exemption should be understood in the
same way in which these are understood in their ordinary parlance bearing in mind the context in which they occur.58.
[See further post under 'Retrospective effect of rules and notifications', and under s 295, 'Ultra vires rules'.]
53. General Power to Condone Delay.—

The AO or an appellate or other authority under this Act is not a 'court' within s 5 of the Limitation Act, and has therefore no
power under that section (nor under the general law) to condone delay where an application under a provision of this Act is made
beyond the prescribed period.59. But there is a conflict of judicial opinion on the question whether the High Court has the power
under the said s 5 or under the general law to condone delay in filing an application or appeal under a provision of this Act.60.
Under s 5 of the Limitation Act, to condone delay for sufficient cause in not preferring an appeal or other application within the
period prescribed, the court has to exercise its discretion on the facts of each case keeping in mind that the expression 'sufficient
cause' should receive a liberal construction.61.
54. Necessity of Speaking Orders.—

A right to reasons is an indispensable part of a sound system of judicial review62.—recording of reasons and disclosure thereof
'are not a mere idle formality'.63. Therefore, statutory authorities must apply their own mind to the case,64. and must further
observe this rule in its proper spirit; mere pretence of compliance with it would not satisfy the requirement of law.65. Where under
the provisions of the Act an authority is empowered to grant approval or exemption, and the taxpayer has a right to claim it on
fulfilment of the statutory conditions, the authority is bound to pass a speaking order and give reasons in support of its finding
that the taxpayer is not entitled to the approval or exemption.66. Likewise, the assessing, appellate, revisional and enforcement
authorities likewise must pass speaking orders giving the basis for their decision.67. These principles equally apply to High Courts
while deciding an appeal.68.
55. Duty of Assessing Officer.—

Tax authorities would not be acting properly and judiciously if they exercise their power in the manner most beneficial to the
revenue and consequently most adverse to the assessee.69. On the contrary, it is the duty of the AO to draw the attention of the
assessee to the deductions, reliefs and refunds to which he seems to be entitled on the facts of the case, if the assessee has
omitted to make the claim.70. Therefore, the purpose of assessment proceedings is to assess the tax liability of an assessee
correctly in accordance with law.71. In general, the powers given to the AO under the Act are coupled with a duty to exercise them
when the statutory provisions warrant their exercise; and where the statute invests a public officer with an authority to do an act
in a specified set of circumstances, it is imperative upon him to exercise his authority in an appropriate manner.72.
If excess tax has been paid by inadvertence, or if tax is illegally recovered or retained, the AO is bound to refund it under the
general law and independently of Chapter XIX or any other provision of this Act.73. If he fails to do so, the court may issue a writ,
direction or order compelling him to grant the refund.74. Subject to the provisions of s 293, even a suit can be filed to recover the
tax paid under a mistake.75.
Where interest under s 214 is plainly payable by the government, but is not paid by mistake, the department should suo moto
rectify the order and pay interest, and should not take the technical stand in the assessee's appeal that the omission is non-
appealable.76.
Further, it is the duty of the AO to look into objections raised by the assessee to his proposed assessment and give reasons if he
rejects the same.77.
In a case arising under the excise law, the Delhi High court held that the court can, in a writ petition, award interest on the
amount of duty illegally recovered or retained and that no statutory provision is needed for this purpose.78. In cases arising under
this Act, the Gauhati High Court has taken the same view,79. but a contrary view has been taken by the Andhra Pradesh High
Court.80.
56. Order or Notice under Wrong Section.—

If a power is conferred by the law, its exercise is not vitiated merely because a wrong section or rule is referred to as the source of
the power,81. or the source of the power is not referred to at all.82. A notice issued or an order passed by an income-tax authority
under a wrong provision of law may be justified and up-held under another provision of law under which such action could have
been properly taken.83. If an appeal does not lie against an order under a particular section, the mere fact that the order purports
to have been made under that section does not shut out the appeal; it must be shown that the circumstances of the case bring it
within the scope of that section.84. [See further s 292B.]
57. Mistake of Lawyer or Accountant.—

Wrong legal advice given or other mistake made by the assessee's lawyer or chartered accountant may constitute good reason or
sufficient cause for condoning delay in filing an appeal85. or an application86. or a writ,87. or for not imposing penalty, 88. or for
setting aside an ex parte order passed on non-appearance of a party.89. Ordinarily, a case should not be dismissed for failure of
the lawyer to appear at the hearing.90.
58. Construction of Contracts.—

In construing a contract, the terms and conditions thereof are to be read as a whole. A contract must be construed keeping in
view the intention of the parties.91. Interpretation of the department or revenue on contracts has to be consistent, it can-not
change based on the perception of the individual officers.92. No doubt, the applicability of the tax laws would depend upon the
nature of the contract, but the same should not be construed keeping in view the taxing provisions.93.
In a sales tax case, it was held that the true effect of a transaction has to be determined from the terms of the agreement and in
the light of surrounding circumstances. The assessee is not estopped from establishing that though the agreement was for hire
purchase, the real bargain was a loan on the sale of goods.94.
59. Holding and Subsidiary Companies and Holding Structures.—

It is well accepted that a subsidiary and its holding company are distinct and separate entities. They are subject to Income-tax on
the profits derived by them on a stand-alone basis, irrespective of their actual degree of economic independence and regardless
of whether the profits are reserved and distributed to shareholders/participants. The holding company and its subsidiary are
totally separate and distinct taxpayers. The business of the subsidiary is not the business of the holding company. For
convenience, multinational companies often operate through subsidiaries – sometimes wholly-owned, sometimes partially owned
– in various countries. These subsidiaries are considered a distinct legal persons; a holding company does not own the assets of
the subsidiary and, in law, the management of the business of the subsidiary also vests in its Board of Directors. It is a general
principle of corporate law that a parent corporation is not liable for acts of its subsidiary.
In the Vodafone case, the Court laid down certain illustrative guidelines to determine when holding and subsidiary companies will
not be treated as separate legal entities: (a) if the subsidiary company's directors are mere puppets; (b) where the actual
controlling non-resident enterprise makes an indirect transfer through abuse of legal form and makes arrangements without
reasonable business purpose; (c) where the transaction is a colourable device for distribution of earnings as determined by
surrounding facts and circumstances.
In the cases covered above, the separate existence of different companies will be fully or partly ignored as a device or a conduit (in
the pejorative sense).
Holding structures are common in international transactions and give rise to issues of double taxation, tax deferrals and tax
avoidance. If an entity has been interposed in a holding structure without any commercial or business substance, and only to
avoid tax, the Revenue can discard it by applying the test of fiscal nullity. The Revenue must apply the "look at" test to ascertain
the true nature of every foreign direct investment coming to India and examine it in a holistic manner. The Revenue/courts should
keep in mind the following factors:—
(i) the concept of participation in investment, the duration of time during which the holding structure exists;
(ii) the period of business operations in India;
(iii) the generation of taxable revenues in India;
(iv) the timing of the exit;
(v) the continuity of business on such exit.
In short, the onus will be on the Revenue to identify the scheme and its dominant purpose.1.
60. Lifting the Corporate Veil.—

In a concurring judgment, Radhakrishnan J held that the corporate veil could be lifted in the case of fraud or sham or any device
designed to defeat the interests of shareholders, investors and contractual parties. After referring to earlier decisions, it was held
that corporate veil doctrine could be applied in tax matters even in the absence of any statutory authorisation to that effect. A
similar principle had been enunciated even in the past by the Supreme Court in the context of tax avoidance.2.
The principles of lifting corporate veil will apply if the subsidiary has been formed to accomplish a wrongful purpose and the
parent company is directly a participant in the wrong complained of. Mere ownership, parental control, management of the
subsidiary is not enough to pierce the status of their relationship and make the parent company liable. The English courts have
emphasized that the corporate veil can be pierced if there are special circumstances indicating that it is mere façade to conceal
true facts. Multinational companies set up pyramid like structures consisting of number of companies, but the courts will not
allow separate corporate entities to be used as a means to carry out fraud or to evade tax. The Revenue can lift the corporate veil
to establish on the surrounding facts and circumstances, that a transaction is a sham.3.
In the case of multinational companies, usually subsidiaries have a great deal of autonomy in their respective countries. But the
court in Vodafone noted that a foreign company can have control over its subsidiary and the subsidiary may even comply with
most requests of the foreign company. However, it clarified that there is a difference between having power or having a
persuasive position. For instance, in the case of one-man company having 99% shareholding, the control over the subsidiary
company is complete. The decisive criteria is whether the management of the holding company has such steering (sic)
interference with the subsidiary that it cannot perform its activities on the authority of its own directors. It is submitted that the
words "persuasive position" are incapable of any precise meaning and, therefore, difficult to apply in a particular case.4.
61. Double Taxation.—

Broadly stated, the principle of the Income-tax Act is to charge all income with tax, but in the hands of the same person only
once.5. 'There could be double taxation if the Legislature distinctly enacted it,6. but upon general words of taxation, and when you
have to interpret a taxing Act, you cannot so interpret it as to tax the subject twice over to the same tax'.7. The courts must lean
in favour of an interpretation to avoid double taxation unless there is clear and specific mandate of law in favour of multiple
levies.8. Thus, the same income cannot be assessed under two different heads.9. Further, if an individual is taxed in respect of his
income, the same income cannot be charged again in the hands of the HUF, and vice versa.10. Trust income cannot be taxed in
the hands of the settlor and also in the hands of the trustee or the beneficiary,11. or in the hands of both the trustee and the
beneficiary, nor can the same income be assessed in the hands of both the non-resident and his agent12. or both the firm and its
partner.13. These principles were reaffirmed by the Supreme Court in State of UP v Raza Buland Sugar Co Ltd.14. Similarly, income
from house property that is taxed in the hands of the transferee cannot be taxed again in the hands of the transferor even if the
conveyance is not executed.15.
By saying that the same income is not taxed twice is meant that tax is not levied more than once on one passage of the money in
the form of one sort of income.16. As Rowlatt J said in IR v Sanderson,17. 'If a man earns £100 by his profession and gives it to his
son to clothe himself, or to his daughter, for the year, the son or the daughter does not pay Income-tax; there is only one
passage of the money in the form of that income. If a man earns £100 and pays it to somebody else for services rendered in a
trade or profession by that other person, the sum of £100 enters upon another passage, in another form of income, and
therefore attracts Income-tax again'. [See further post under s 5, 'Charge on accrual or receipt basis: Income cannot be taxed
twice', and under ss 222–23, 'Recovery under "protective" assessment'.]
However, where the legislature clearly intends double taxation,18. or where the taxes are imposed by different legislatures or
authorities,19. or where the assessee is a different one,20. or where one of the two impositions alone is a tax, or where the tax is
for altogether different purposes, or where the double taxation is indirect rather than direct, there is no scope for in-validating
such taxation.21. The joint operation of different statutes may therefore result in liability to two different taxes.22. Thus, royalties
from mines were held liable to cess under the Bengal Cess Act, (9 of 1880) as well as to income-tax,23. and the owner of a
building is chargeable on its annual value to income-tax and also to the Bombay urban immovable property tax.24.
62. English Authorities.—

The Indian Act is not in pari materia with the English Acts; and therefore in many cases little can be gained by trying to construe
this Act in the light of English decisions.25. At times, English decisions may even be misleading since this Act contains provisions
that are not found in the English statutes.26. But on analogous provisions, fundamental concepts and general principles
unaffected by the specialities of the English Acts, English authorities may be very useful guides.27.
63. Territorial connection, and extraterritorial operation of the Act.—

The extraterritorial operation of some of the provisions of the Act does not render such provisions invalid or ultra vires the Indian
legislature.28. The general conception as to the scope of income-tax is that, given a sufficient territorial connection or nexus
between the person sought to be charged and the country seeking to tax him, income-tax may properly extend to that person in
respect of his foreign income.29. The connection must be a real one and the liability sought to be imposed must be pertinent to
that connection.30. But it is of no importance on the question of validity that the liability imposed is, or may be, altogether
disproportionate to the territorial connection; in other words, if the connection is real, its extent is not relevant in considering the
validity of the legislation.31. The connection can be founded on the residence of the person or business connection within the
territory of the taxing state; and the situation within the state, of the money or property from which the taxable income is
derived, would be sufficient to establish a territorial connection.32.
In Electronics Corporation a bench of three judges had observed that Parliament under art 245(2), had the power to make laws
which operated extra-territorially. But the question was whether there should be a nexus with something in India before any tax
could be levied? The Bench observed that Parliament will have no competence to make a law unless such nexus existed and that
the provocation for the law must be found within India itself. Although such a law may have extra-territorial operation in order to
subserve the object, that object must be related to something in India.33. With these observations, the matter was placed for
hearing before a Constitution bench. Unfortunately, the appellant withdrew the appeal and this question could not be decided.
Almost 20 years later, the matter was referred again to a Constitution Bench.34. This appeal was against a judgment of the
Andhra Pradesh High Court wherein the main question for consideration was whether payment for financial consultancy would
also come within the definition of "fees for technical services" under s 9(1)(vii). The High Court held that it would but did not
decide any issue relating to extra-territorial operation or the constitutional validity of s 9(1)(vii). Before the Supreme Court, the
appellant specifically withdrew its challenge to the constitutional validity of s 9(1)(vii). With this, the Constitution Bench should
have been dissolved but the Supreme Court, at the insistence of the Attorney General, proceeded to decide questions of
farreaching importance. The observations regarding art 245(2) are outside the scope of this commentary. The Supreme Court did
not notice the difference between extra-territorial operation and extra-territorial legislation. It also failed to note the historical
background of art 245 and the meaning of India in the Government of India Act, 1935.
The Supreme Court concluded by holding: Parliament is constitutionally restricted from enacting legislation with respect to extra-
territorial aspects or causes that do not have, nor expected to have any, direct or indirect, tangible or intangible impact(s) on or
effect(s) in or consequences for: (a) the territory of India, or any part of India; or (b) the interests of, wel-fare of, well-being of, or
security of inhabitants of India, and Indians. The connection to India must be real or expected to be real, not illusory or fanciful. It
also held that Parliament did not have the power to make laws for any territory other than that of India.35. It is submitted that
the judgment does not lay down any clear principle that would be useful in deciding a case under this Act. It is an elaborate
judgment with wholly unnecessary comments and references.
The present Act increasingly contains provisions which are clearly unconstitutional and amount to extra-territorial legislation. For
example, Explanation 5 to s 9(1)(vi) expands the definition of royalty to include consideration paid in respect of any property even
if it is not located in India. Recently, the Madras High Court held that a ship is an "equipment" and consideration paid for using a
ship also falls within the definition of royalty. 36. Therefore, if an Indian assessee charters a ship belonging to foreign company
from New York to London, the royalty would be deemed to accrue or arise in India and become taxable. The Explanation at the
end of s 9 clarifies that income of a non-resident is deemed to accrue or arise in India irrespective of whether the non-resident
has a residence in India or place of business in India or business connection in India or whether he is rendered services in India.
The net result of these and similar amendments is that international principles of taxation have been completely subverted. It is
well settled that the global income of a resident will be taxable in India; similarly, income arising or accruing out of a source of
India will be taxable in India. However, as a result of these amendments, any expenditure incurred by a resident of India and paid
to a non-resident will now be taxable in India. Similarly, any payment going out of India will be deemed to result in income
accruing or arising in India. It is submitted that such laws amount to extra-territorial legislation and are ultra viresart 245(2) of
the Constitution.
64. The Act does not Bind the Government.—

The Act does not bind the government; the government can claim immunity in respect of income received by it as well as in
respect of its income received on its behalf by a government servant in the course of his official duties. These principles were
applied by the House of Lords, in Bank voor Handel en Scheepvaart NV v Administrator of Hungarian Property,37. to income
received by the Custodian of Enemy Property. Though the income of a state in India is exempt from tax by virtue of art 289(1) of
the Constitution, the exemption does not extend to a state-controlled statutory corporation, e.g. a SRTC38. or a State Civil
Supplies Corporation39. or a SIDC40. or a Housing Board.41. But the toll that is statutorily vested in the state government must be
treated as its income even though it is collected by a corporation formed by it; in such a case the corporation merely acts as the
agent of the government.42.
65. Sovereign Rulers and Foreign States.—

Sovereign rulers of states are exempt from the operation of this Act—they cannot be treated as assessees for any purpose under
the Act;43. and the same principle applies to ambassadors.44. An agent of a non-resident sovereign ruler, as such agent, cannot be
assessed to tax when the ruler himself is not liable.45. This exemption is on the ground of international law under which a
sovereign Prince is not amenable to the municipal laws of another state. There is nothing in this Act exempting a ruling Prince
from taxation, but it is a well established rule of construction that a statute will not be construed as overriding international law
unless the words of the statute compel the court to put such a construction upon it.46. But corporations owned by a foreign
state, which are separate juristic entities under the municipal laws of the country where they are incorporated, are not entitled to
immunity from taxation. The immunity enjoyed by the ruling chief of a state does not extend to his wife.47.
Normally, a country does not recognise or enforce the revenue laws of another country.48.
Under the Government Trading Taxation Act, 1926, only to a limited extent the quondam Indian durbars and states were made
liable to tax. That Act brings to charge the profits of trade or business only and still applies to British dominions. In respect of
other income, e.g. income from dividends and immovable property, the rulers of Indian states enjoyed immunity from taxation
prior to integration into the Republic;49. and thereafter only their privy purse was exempt under s 10(19) of this Act and art 291
of the Constitution, and not their other incomes.50. After the repeal of art 291 and the abolition of the privy purse, s 10(19) was
deleted.
66. Exemption Claimed under Special Agreements with Quondam Indian States or Permanent Settlement Regulations.
—
A sovereign legislature has inherent power to impose taxes or alter the position of any subject of the state, notwithstanding any
previous engagement which may have been entered into between the sovereign power and the subject. If there be any earlier
legislation or treaty between the sovereign power and the subject for special exemption from future taxation, followed by the
introduction by the sovereign power of this Act which applies to and includes the subject who was originally exempted, the Act
must be held to repeal by necessary implication the earlier legislation or treaty under which the exemption is claimed.51.
In Umaid Mills Ltd v UOI,52. the Supreme Court held that exemption from tax under an agreement with the ruler of a quondam
Indian state did not ensure to the assessee's benefit after the birth of the Republic and that he was assessable under the Income-
tax Act.53. The Permanent Settlement Regulations do not contain any provision conferring exemption from liability to future
general taxation of income; the income derived from lands in permanently settled estates is liable to tax under this Act.54.
[Cf under s 143, 'Promissory estoppel'.]
67. Retrospective Legislation.—

The following propositions are well-settled with regard to retrospective legislation:
(a) The legislature, as well as the President and the Governor in the exercise of their legislative powers, can promulgate laws
which are retrospective or retroactive in effect,55. and taxing statutes are no exception to this rule.56.
(b) The general principle is that provisions in a statute would operate prospectively unless retrospective operation is provided for
expressly or by necessary implication.57. A taxing provision imposing liability is governed by the normal presumption that is
not retrospective.58. Thus, a substantive law is intended to be prospective unless a contrary intention is manifest from the
language of the provision or arises by necessary implication.59.
(c) A statutory amendment that is not expressly made retrospective, but is of an explanatory, declaratory, curative or clarificatory
nature, should be judicially construed as retrospective.60. An amending provision is clarificatory or declaratory when it has
been introduced to clear doubts or ambiguity as regards its meaning in order to avoid unin-tended consequences. But when
there was no ambiguity in the existing provision, an amendment cannot be treated as clarificatory unless there are clear
words indicative of such intention.61.
(d) The presumption against retrospective construction has no application to provisions that are procedural in nature.62. But such
a provision cannot, in the absence of clear contrary intendment indicated therein, be given greater retrospectivity than
expressly mentioned so as to allow the finality of assessments to be affected or to allow the reopening of liabilities barred by
limitation.63.
(e) where a benefit is conferred by a legislation, the rule against a retrospective construction is different. If a legislation confers a
benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally,
and where to confer such benefit appears to have been the legislators object, then the presumption would be that such a
legislation, giving it a purposive construction, would warrant it to being given a retrospective effect.64.
(f) The legislature does not intend to attribute to the amending provision, a greater retro-spectivity than is expressly
mentioned.65.
(g) Penal laws cannot generally have retrospective operation.66. Article 20 of the Constitution imposes two limitations on the
retrospective applicability of penal laws— firstly, the making of an act an offence for the first time and then making that law
retrospective is prohibited; secondly, the infliction of a penalty greater than that which might have been inflicted under the
law which was in force when the act was committed is not permitted.67.
(h) Retrospective legislation may be held to be invalid on the ground that it is unreasonable,68. or not in general public
interest,69. or beyond the legislative competence70. or violative of a constitutional provision71. or manifestly arbitrary.72. On
the other hand, a mechanical test based on the length of time covered by the retrospective operation of an Act cannot be
applied in determining its validity, 73. nor can a retrospective provision be struck down on the mere ground of hardship to a
citizen.74. But an amendment that is otherwise constitutionally invalid, cannot be upheld as valid solely on the basis of a
concession made by the department in the court that the amendment would apply only to assessments yet to be finalised.75.
The aforesaid principles are elaborated upon in the commentary that follows.
The legislature has the power to make the taxing statutes applicable to a particular area with retrospective effect, and pending
assessment proceedings must be disposed of in conformity with the statutes so made applicable.76. When the law is so amended
with retrospective effect, the fiction that follows is that all must proceed on the basis that the law at the relevant time was the law
as amended subsequently. 77. But an amendment cannot be made retrospective with effect from a date earlier to the date on
which the provision sought to be amended itself was brought on the statute book.78. Further, where the legislation is introduced
to overcome a judicial decision, the power cannot be used to subvert the decision without removing the statutory basis of the
decision,79. and such amendment cannot be made retrospectively only for the purpose of nullifying a judgment where there was
no lacuna or defect in the original law.80.
If, pending an appeal or reference, retroactive legislation is enacted by the appropriate legislative authority, the deciding tribunal
must give effect to it and give its decision in accordance with the law in operation at the time of its decision.81. Further, if pending
an application under s 256(2) (now inoperative) the law is retrospectively amended, the court may grant the question though it
was rightly rejected by the tribunal under s 256(1) (now inoperative) on the basis of the unamended law;82. and where the law is
so amended after the tribunal has made a reference, the court must itself decide the reference in accordance with the amended
law,83. or decide the general principle of law and leave it to the tribunal to consider the amendment while passing the order under
s 260(1),1. or send the matter back to the tribunal to decide the appeal again after taking into consideration the retrospective
amendment.2.
If, when an assessee files the return, a particular provision of law is in existence, and if it is later retrospectively amended, the
assessee cannot be held liable for filing a wrong return.3. But a completed assessment may be reopened under s 1474. or rectified
under s 154,5. if the relevant provisions of the law are amended with appropriate retrospective effect. A Circular of the Board may
be rendered ineffective by a retrospective amendment of the law.6.
Th e validity o f retro sp ective tax legislatio n w as co n sidered in th e u n dermen tio n ed cases.
7. [See fu rth er p o st u n der s 4, 'Law to b e ap p lied is th at in fo rce in assessmen t year'.]
Retrospective and Retroactive amendments.—

One of the unfortunate and unique features of income-lax law in India is the repeated resort to retrospective amendments.
Almost every time there is a decision in favour of the assessee, the law is amended retrospectively and the judgment of the
Supreme Court or the High Court or even the order of the Tribunal is reversed or nullified. Until 2014, virtually every major
decision was retrospectively overruled. Mercifully, such amendments are now rare but what is worrying is the power given to the
Revenue to issue rules with retrospective effect.8.
The interesting question that arises is whether there is any difference between the words 'retrospective' and 'retroactive'? It is
submitted that in some European countries, these two words are treated as synonymous and are used interchangeably. However,
there is an important, settled difference emanating from the decisions of the Canadian and Israeli courts. To understand the
difference between these two words, the undernoted commentaries are very useful.9. It is submitted that the difference between
these two words is best explained by a few illustrations:
i. If a law states that the persons who have been convicted with the imprisonment for more than six months would be
disqualified from being appointed as a director of a company, the law is prospective although the imprisonment may have
occurred several months or years earlier. Such a law will not be treated as a "retrospective" amendment.
ii. If, however, the law states that all directors who have been convicted as mentioned above would be treated as having been
unlawfully appointed with retrospective effect, from say, 2015 and their salaries forfeited, this would be a retrospective law
because it operates for a past period. When these persons were appointed as directors, there was no such disqualification and
were legitimately being paid salary. By this retrospective amendment, their appointment becomes illegal from an anterior date
and the salary paid to them is liable to be recovered.
iii. The retroactive amendment is one where a retrospective amendment is additionally based on the factual situation also being
changed retrospectively. For example, lawyers today are not liable to pay service tax but Chartered Accountants are. If an
amendment is made whereby all lawyers will be "deemed to be Chartered Accountants" from 2015 and service tax collected
from them accordingly, the amendment is retroactive. It retrospectively changes the factual situation and creates a legal
fiction where lawyers are deemed to be Chartered Accountants and, on this basis, are made liable to service tax from an
earlier period. A classic example is Explanation 5 to s 9(1)(i). It is well settled that the situs of the share is where the registered
office of a company is situated. Therefore, when a company is incorporated in London, the situs of the share will be the
United Kingdom. But Explanation 5 creates a legal fiction and states that if the value of such a British share is based on
underlying assets located in India, then such share will be deemed to be situated in India. This change was made retrospective
from April 1, 1962 and the transfer of shares of a British company would be deemed to be transfer of an Indian Company.
This amendment is retroactive because a foreign share is deemed to be an Indian share thereby altering the factual situation
itself and it is on this altered factual situation that the tax is demanded retrospectively.
(a) Partial Retrospective Operation: Assessment Barred before Amendment of the Act.—
A statute is not to be construed so as to have a greater retrospective operation than its language renders necessary.10.
Retrospective operation is not to be given to a statute so as to impair an existing right or obligation, otherwise than as regards
matter of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment.11. The retro-
spective effect of a statute may be only partial in scope; an Act may apply to assessment years ending prior to the
commencement of the Act but not apply to an assessment made before the commencement of the Act.12. In the absence of a
clear provision to the contrary, a statute must not be construed as disturbing existing rights and orders which have become
final.13. Words in an amending Act which enable the department to make an assessment or reassessment in respect of years
which were over when the amending Act began, are not to be construed as authorising action in respect of a year for which
action was already time-barred at the date when the amending Act came into force, unless the statute clearly provides to the
contrary; and the position is the same where an old Act is repealed by a new Act.14. This principle is firmly established; it has been
accepted in Prashar v Vasantsen Dwarkadas,15. and allied cases16. by the majority of the Supreme Court (SK Das, Kapur17. and
Sarkar18. JJ) and unanimously reaffirmed by the Supreme Court in subsequent decisions.19.
(b) Retrospective Effect of Provision for Appeal, Revision or Rectification.—

If an amendment which gives a right of appeal, revision or rectification for the first time is to apply to orders which were final at
the date when the amendment came into force, it must be clearly so provided.20. This was laid down by the Privy Council in Delhi
Cloth & General Mills Ltd v CIT,21. in words which have become classic:
W h ile p ro visio n s o f a statu te dealin g merely w ith matters o f p ro cedu re may p ro p erly, u n less th at co n stru ctio n b e textu ally in admissib le,
h ave retro sp ective effect attrib u ted to th em, 22. p ro visio n s w h ich to u ch a righ t in existen ce at th e p assin g o f th e statu te are n o t to b e
ap p lied retro sp ectively in th e ab sen ce o f exp ress en actmen t o r n ecessar y in ten dmen t.23. Th eir Lo rdsh ip s can h ave n o do u b t th at p ro visio n s
w h ich , if ap p lied retro sp ectively, w o u ld dep rive o f th eir existin g fin ality o rders w h ich , w h en th e statu te came in to fo rce, w ere fin al, are
p ro visio n s w h ich to u ch existin g righ ts.
A right of appeal vests in the assessee on the date of the initiation of the assessment proceedings and therefore, in the absence
of a contrary statutory indication, any amendment imposing a fetter or condition on that right would not apply to cases where
the proceedings had been initiated prior to the amendment.24. However, every order passed after the right of appeal is granted
would be appealable even if the proceedings had commenced at a time when there was no right of appeal.25. [See further under s
271, 'Law to be applied is that in force at date of default which attracts penalty'.]
(c) Retrospective Effect of Rules and Notifications.—

An authority cannot make rules or issue notifications adversely affecting the assessee's rights with retrospective effect, unless the
statute, either expressly or by necessary intendment, empowers the authority to do so.26. This principle has now received
statutory recognition in s 295(4).27. Further, rules of procedure aregenerally applicable to all pending proceedings.28. The
retrospectivity and validity of various rules and notifications have been considered in the undermentioned cases.29. [See under s 4,
'Tax is on income of previous year', and further post under s 295, '...Ultra vires rules'.]
(d) Declaratory or Clarificatory.—

The exercise to ascertain whether the Act under consideration is declaratory or clarificatory would arise only when there is some
ambiguity in the law so made, or the enacting history does not leave any doubt to the same being declaratory. To ascertain if the
amendment is declaratory or clarificatory one has to examine the scheme of the Act prior to the amendment and subsequent to
the amendment.30. The principles in relation to declaratory Acts are:
(i) a declaratory Act is intended to remove doubts regarding common law which are to be construed according to common law;
(ii) declaratory Acts are also made to rectify or clarify a gross mistake, or the omission in the former statute, in which event the
latter statute relates back to the time when the former Act is made;
(iii) the purpose of a declaratory Act is to remove a doubt as to the meaning of an existing law or to correct a construction
considered erroneous by the Legislature. If a declaratory Act is by way of an explanatory Act, one should see whether it is
intended to supply an obvious omission or clear up doubts as to the meaning of the previous Act. In the absence of clear
words indicating that the amending Act is declaratory, it would not be so construed when the pre-amended provision was
clear and unambiguous;
(iv) if a statute is curative, or merely declarative, retrospective operation is generally intended; and
(v) in determining the nature of the Act, substance is more important than the form.31.
68. Disposition of Property so as not to Attract Tax: 'Form' and 'Substance'.—

The subject has the legal right so to dispose of his capital and income as to attract upon himself the least amount of tax.32.
'Avoidance of tax is not tax evasion and it carries no ignominy with it, for it is sound law and, certainly, not bad morality, for
anybody to so arrange his affairs as to reduce the brunt of taxation to a minimum'.33. In the context of payment of tax, 'evasion'
necessarily means 'to try illegally to avoid paying tax'; therefore, 'tax planning' is not tax evasion.34. The subject cannot be taxed
by ignoring the legal position and regarding 'the substance of the transaction'. 35. The supposed doctrine that in revenue cases
'the substance of the matter' may be regarded as distinguished from the form or the strict legal position, was given its quietus by
the House of Lords in Duke of Westminster v IR,36. by the Privy Council in Bank of Chettinad Ltd v CIT,37. and by the Supreme
Court in CIT v Keshavlal Patel,38.CIT v Motors & General Stores Ltd,39. and CIT v Kharwar.40.
The essential character of a transaction (or contract) as an alienation (or transfer) cannot be altered by the form of consideration,
the payment of consideration in instalments or on the basis that the payment is related to a contingency like options.41.
Sale and lease back transactions have been the subject matter of extended Income-tax investigation because of misuse of these
contracts to claim depreciation and wide spread misuse. While the Karnataka High Court held that the sale and lease back
transaction of the Andhra Pradesh State Electricity Board was not genuine on the facts of that case.42. The Madras High Court has
taken a different view on a careful examination of the sale and leaseback transactions that were entered into with the Tamil Nadu
Electricity Board.43.
"Look at" Test.—
Where a transaction involves sale of shares "lock, stock and barrel"; confusion would arise if a dissenting approach is adopted and
the transaction is broken up into its separate individual components such as management rights, controlling rights, brand licences
and so on. Shares constitute a bundle of rights and where the parties have agreed for a lump sum consideration, it is not open to
the revenue to split the payment and place separate values for each component. The transaction was to looked at as an entire
package. If the parties have not agreed for a separate price for the shares and for "other rights and entitlements", the revenue
cannot then split it up. It is necessary to "look at" the entire transaction as a single consolidated bargain and interpret the
transactional documents in that light.44.
69. Tax Avoidance and Tax Evasion.—

The principles set out in the immediately preceding paragraph represent the correct state of the law, today as always in the past.
As Shah J stated in CIT v Raman & Co:45.
Avo idan ce o f tax liab ility b y so arran gin g co mmercial affairs th at ch arge o f tax is distrib u ted is n o t p ro h ib ited. A taxp ayer may reso rt to a
device to divert th e in co me b efo re it accru es o r arises to h im. Effectiven ess o f th e device dep en ds n o t u p o n co n sideratio n s o f mo rality, b u t
o n th e o p eratio n o f th e In co me-tax Act. Legislative in ju n ctio n in taxin g statu tes may n o t, excep t o n p eril o f p en alty, b e vio lated, b u t it may
law fu lly b e circu mven ted.
[See further ante under 'Some Judicial Observations'.]

However, in McDowell v CTO,46. the Supreme Court seemed to suggest that the legal position in cases of tax avoidance should be
taken as altered in the light of three decisions of the House of Lords—Ramsay v IR,47. IR v Burma Oil,48. and Furniss v Dawson.49.
It is submitted with respect that the judgment of Chinnappa Reddy J is incorrect in its approach inasmuch as it blurs the
distinction between tax avoidance which is legitimate and tax evasion which is not.
McDowell involved a simple question under the Andhra Pradesh sales-tax law—the un-complicated issue being whether excise
duty voluntarily paid directly to the state by the buyer should be included in the turnover of the manufacturer who contended
that sales-tax was payable on the contractual sale price which did not include excise. The court had merely to decide whether the
manufacturer could legitimately reduce his sales-tax liability in this manner. For the purposes of income-tax law, it is not necessary
to consider the correctness of the Supreme Court's decision on the question arising under the sales-tax law, but it is necessary to
consider the validity of the observations regarding the legitimacy of tax avoidance and the correctness of the interpretation of the
three House of Lords decisions invoked by the Supreme Court.
(a) The three decisions of the House of Lords were rendered in the context of facts which were entirely dissimilar to the facts
before the Supreme Court. Those decisions do mark a significant change in judicial approach, but only in cases where 'the safe
channel of acceptable tax avoidance shelves into the dangerous shallows of unacceptable tax evasion'. 50. The House of Lords
was dealing with sham cases of 'readymade schemes' (usually purchased off the shelf) which involved a series of inter-
connected transactions which were 'self-cancelling', i.e. the taxable gains were artificially neutralised by a pre-arranged loss,
the loss being 'the mirror image of the gain'. 51. Thus the loss was not real,52. it was 'manufactured'53. or 'created'54. or
'produced'.55. Several transactions (basic to the schemes) were commercially inert, only intended to be fiscally active on the
assumption that a make-believe scheme is sufficient to produce a tax effect.56.
(b) The House of Lords expressly reaffirmed the basic principle, 'A subject is entitled to arrange his affairs so as to reduce his
liability to tax. The fact that the motive for a transaction may be to avoid tax does not invalidate it unless a particular
enactment so provides'.57.
(c) The House of Lords expressly reaffirmed the cardinal principle of Duke of Westminster, 'Given that a document or transaction
is genuine, the Court cannot go behind it to some supposed underlying substance'. They only ruled against the principle
being overstated or overextended.58.
(d) Shortly before Ramsay (1981), in Newstead v Frost (1980)59. both the Court of Appeal and the House of Lords had
unanimously upheld the assessee's right to form a partnership with a foreign company, expressly ruling that the fact that the
course adopted by the assessee could reasonably be described as a device to avoid tax was irrelevant. In a later judgment
Craven v White (1988),60. the House of Lords made it clear that the principles laid down in the earlier three cases did not
apply to a single, genuine transaction even if the motive was tax avoidance, but were confined to only pre-ordained or pre-
arranged schemes involving a series of inter-connected transactions entered into for no purpose other than the mitigation of
tax. In fact, in those earlier cases, the Law Lords themselves were at pains to state expressly that they were not laying down
the law for a single transaction of tax avoidance.61.
Reddy J's concurring view has three major flaws:
(a) it fails to note two subsequent decisions62. which do not support his thesis;
(b) it places an excessive reliance on Greenbey and Ramsay without noting that the observations therein are based on the
respective provisions of the English Finance Acts 1960 or 1965. As Lord Wilberforce put it: "As always … the question involved
is the applicability of legislation to the methods adopted in carrying out the scheme:"
(c) it brings in the personal views of the judge and seeks to make them the law, without regard to the statutory provisions or
earlier pronouncements. It was improper to state that Courts should "dissociate themselves from the observations of Shah J.
and similar observations make elsewhere", when no arguments had been advanced on this point at all.
McDowell and its aftermath have been dealt with here at some length because the misinter-pretation of the three House of Lords
decisions in that case has been compounded by the in-discriminate manner in which the judgment has been sought to be applied
to genuine and legitimate cases of tax avoidance.
In its reaction to the Ramsay case, the Indian courts had been circumspect and cautious and all did not regard it as some form of
judicial legislation. But Chinappa Reddy J, in McDowell, forced himself to find, in his own words, an 'excuse for inflicting this extra
opinion'. His opinion was actually meant only 'to supplement' the main judgment delivered on behalf of the Full Court by
Ranganath Misra J, with which Chinappa Reddy J entirely agreed. In that main judgment it has been categorically ruled: 'Tax
planning may be legitimate provided it is with-in the framework of the law' (p171). What the court frowned upon was only
'colourable devices', 'dubious methods' and 'subterfuges' under the guise of tax planning. The opposition to Chinappa Reddy J's
solitary extreme view was demonstrated by another Supreme Court judge, Sabyasachi Mukharji J, who in his prompt and lethal
retort in CWT v Arvind Narottam,63. said: '…no amount of moral sermons would change people's attitude to tax avoidance', and
soon thereafter in UOI v Playworld Electronics,64. stated: 'one should avoid sub-verting the rule of law'. As a matter of law, the
Supreme Court in these two later cases reiterated that where the true effect of a transaction is clear, the appeal to discourage tax
avoidance is not a relevant consideration.
In any event, when the language of a deed of settlement is clear, an attempt to invoke McDowell would be futile even if the deed
results in tax avoidance.65. As the Madras High Court held in Valliappan v ITO,66. McDowell does not hit tax planning.
The manner in which McDowell is to be dealt with was well summed up by the Gujarat High Court in Banyan and Berry v CIT,67.
thus:
Th e co u rt (in McDowell) n o w h ere said th at every actio n o r in actio n o n th e p art o f th e taxp ayer w h ich resu lts in redu ctio n o f tax liab ility to
w h ich h e may b e su b jected in fu tu re, is to b e view ed w ith su sp icio n an d b e treated as a device fo r avo idan ce o f tax irresp ective o f th e
legitimacy o r gen u in en ess o f th e act… .Th e p rin cip le en u n ciated in th e ab o ve case h as n o t affected th e freedo m o f th e citizen to act in a
man n er acco rdin g to h is requ iremen ts, h is w ish es in th e man n er o f do in g an y trade, activity o r p lan n in g h is affairs w ith circu msp ectio n ,
w ith in th e framew o rk o f law , u n less th e same falls in th e catego ry o f co lo u rab le device.
Now, the House of Lords itself has eliminated the possibility of misinterpretation of its previous judgments, and has, at the
beginning of the twenty-first century, in Macniven v West-moreland Investment Ltd,68. exhaustively considered all the judgments
delivered in the last century and reset the law on tax avoidance in the right perspective for the years ahead. The decision of
Chinappa Reddy J in McDowell is completely founded on the earlier House of Lords decision in Ramsay, and he regarded the
same as a turning point and the beginning of the 'winds of change'. But the recent House of Lords decision in Macniven has a
diametrically opposite perception of Ramsay and has highlighted the following important points:
(i) In Ramsay, the House of Lords did not enunciate any new legal principle. What the House of Lords did was only to highlight
the court's duty to determine the legal nature of the transaction and relate it to the tax legislation.
(ii) The Ramsay ruling is not an overriding legal principle superimposed upon the whole of the revenue law without regard to the
language or purpose of any particular provision. The courts have no constitutional authority to impose such an overlay upon
the tax legislation, and the House of Lords had not attempted to do so.
(iii) In Ramsay, both Lord Wilberforce and Lord Fraser, who gave the other principal speech, were careful to stress that the House
was not departing from the principle in Duke of Westminster.69.
(iv) Ramsay was widely regarded as some form of judicial legislation and as the proclamation of a revolutionary credo. In the first
flush of victory after Ramsay, and Burmah Oil and Furniss that followed, there was a tendency on the part of the Inland
Revenue to treat these decisions 'as if they were a broad spectrum antibiotic which killed off all tax avoidance schemes'. But
Ramsay was no such super-legislation.
The House concluded in Macniven that steps which had no commercial purpose and had been artificially inserted for tax purposes
into a composite transaction, should be disregarded; but that a transaction which came within the statutory language could not
be disregarded merely because it was entered into solely for tax purposes.
Judicial developments had channelised the legal opposition70. to the reckless misuse of 'the McDowell spirit' in India, making the
time extremely ripe for an Indian parallel to Macniven. The recent decision of the Supreme Court in UOI v Azadi Bachao
Andolan,71. is that inevitable parallel. In this case, the Apex Court has correctly explained McDowell and set the law in the right
perspective in India as well. While observing that the extreme view of Chinappa Reddy J 'actually militates against the
observations of the majority of the Judges' in McDowell, the Supreme Court has emphasised the relevance of Shah J's view in CIT
v Raman & Co,72. approved the view of the Gujarat High Court in Banyan and Berry,73. broadly agreed with the Madras High
Court's decision in Valiappan,74. and has categorically stated that 'the principle in Duke of Westminster is very much alive and
kicking in the country of its birth'. It was at pains to reiterate: '…it does not appear that the rest of the learned Judges of the
Constitutional Bench contributed to this radical thinking' (of Chinappa Reddy J). Now, for the Indian courts and statutory
authorities, 'the temporary turbulence created in the wake of McDowell' is over, and the ghost of McDowell cannot 'be allowed to
rear its head in India'.
Subsequent to the decision in Azadi Bachao Andolan, the argument has been raised by the Revenue in several cases that the
anti-avoidance principles in McDowell's case must continue to prevail as McDowell was decided by a Bench of five judges while
Azadi was decided by a Bench of two judges. This argument is misconceived as it fails to recognize that when a decision of a
larger bench of the Supreme Court is interpreted by the smaller bench of the Supreme Court, what would bind all lower
authorities is that interpretation which the smaller Bench has placed on the larger Bench's decision. Azadi Bachao Andolan
extensively discusses the principles in McDowell and consequently cannot be termed as a decision delivered per incuriam. The
Bombay High Court has correctly noted that McDowell, as interpreted and understood in Azadi Bachao Andolan is the law in
India.75. The same result has also been reached by the Punjab and Haryana High Court in a detailed judgment in Porrits &
Spencer.76.
The Calcutta High Court has laid down six general principles regarding tax avoidance and tax evasion.77. These have to be read
subject to the later decision of the Supreme Court in Azadi Bachao Andolan.
70. Vodafone, Azadi Bachao and McDowell—The Evasion/Avoidance: Trilogy.—

In the McDowell78. case, the Supreme Court was primarily concerned with sales-tax liability in the State of Andhra Pradesh. Tax
avoidance and tax evasion was not a major issue. Justice Chinnappa Reddy gave a separate judgment only on the issue of tax
avoidance and tax evasion. This separate judgment was wholly unnecessary and also erroneous in several of its conclusions. The
incorrectness of certain observations in McDowell case were pointed out in the Azadi Bachao Andolan79. case. The Azadi Bachao
Andolan case was concerned with the Indo-Mauritian Treaty and the impact of Tax Residency Certificate (TRC). Briefly, if the
investment in an Indian company is through a Mauritian company, certain tax benefits arise. For example, if the sales in Mauritian
company are sold, there is no liability to capital gains tax. Almost 40% of foreign direct investment (FDI) in India came from
Mauritian companies. It was obvious that investments from various nations was routed through Mauritian companies and the
Union of India was fully conscious of this pattern. Azadi Bachao Andolan made it clear that there was no scope for examining the
source of funds of the Mauritian company. As long as that company had a TRC, the benefit under the treaty could not be denied.
In the Vodafone case, it was pleaded that Azadi Bachao Andolan had to be overruled as it was a decision by a two-judge bench
and was contrary to the observations of the five-judge bench in the McDowell case. The Vodafone decision examined both the
McDowell and Azadi Bachao Andolan cases. The following principles can be summarized from the Vodafone decision by Kapadia
C.J.:—80.
(i) The observations of Chinnappa Reddy J. on the need to depart from the Duke of Westminster was only in the context of an
artificial and colourable device;
(ii) All tax planning cannot be treated as illegal/illegitimate/impermissible and even Reddy J. made a distinction between schemes
and devices and legitimate avoidance of tax liability;
(iii) Reddy J. had agreed with the majority view which held that tax planning within the frame-work of law is permissible;
(iv) There is no conflict between McDowell and Azadi Bachao Andolan or between McDowell and Mathuram Agrawal.81.
The concurring decision of Radhakrishnan J. has considered the difference between tax avoidance and tax evasion in great detail82.
and thereafter also considered whether the decision in Azadi Bachao Andolan requires reconsideration.83. In the McDowell84.
case, reference was made to several earlier decisions and the judgment by Ranganath Misra J. [for himself and three other judges]
held as follows:—
"Tax planning may be legitimate provided it is within the frame-work of law. Colourable devices cannot be part of tax planning and it is wrong to
encourage or entertain the belief that is honourable to avoid the payment of tax by resorting to dubious methods. It is the obligation of every citizen to
pay the taxes honestly without resorting to subterfuges."
Radhakrishnan J. rightly pointed out that Chinnappa Reddy J. entirely agreed with this view and his judgment was intended to
supplement what had been said on the "fashionable topic of tax avoidance". It was correctly held that the view of Justice Reddy is
not the ratio of McDowell and was only an opinion. Thus, it is not correct to state that the ratio in McDowell was contrary to what
has been stated in Azadi Bachao Andolan. The Vodafone decision has reiterated that every taxpayer can arrange his affairs so
that taxes are as low as possible and he is not bound to choose that pattern which will replenish the treasury.
It is submitted that the majority decision in the McDowell case correctly summarises the distinction between tax avoidance and
tax evasion. Simply put, colourable devices will not be accepted as part of tax planning. The assessee can plan its corporate
structure or its affairs so as to minimize the tax liability within the framework of law. One indication of determining whether a
colourable device exists is to ascertain whether the planning consisted of a series of pre-ordained steps that had no commercial or
business purpose except to reduce the tax burden. It is further submitted that the question of whether a particular type of tax
planning is permissible or not should be strictly be decided by the principles laid down in Mishra J.'s decision in McDowell as
explained by Azadi Bachao Andolan and Vodafone. It would not be advisable to follow stray observations from English decisions
which are often based on English statutory provisions which are quite different from the Income-tax Act, 1961.
Tax avoidance is a relatively complex area of law in the best of times. The reason is that attempts to articulate a principle that is
consistent with the leading cases have, with some notable exceptions considered below, inevitably been at so high a level of
generality (for example, that avoidance is distinct from evasion) that they afford little guidance to taxpayers as to what is per-
missible and what is not. The course of the law in India has been further complicated by different views the Indian courts have
taken at different times, of the leading English cases on the subject.
IRC v Duke of Westminster,85. was decided in 1936. Since then, the principles have been considered in a number of leading
English cases,86. the most important of which are briefly summarised in the table below. The chief architects of the English
approach are perhaps Lord Millett (who, as Mr Peter Millett QC, successfully argued Ramsay and Furniss), Lord Wilber-force (who
gave the leading speech in Ramsay) and Lord Hoffmann.
S. No Name Facts Result Remarks

1 IRC v Duke of Westminster The House unanimously It is significant that the
• The Income Tax Act, held that the covenant, annual payment under the
1918, provided that standing alone, would have covenant was payable
the taxpayer could represented an 'annual even if the gardener had
deduct "annual payment'. By a majority of ceased to be a servant
payments" from his 4-1 (Lord Atkin dissenting), (see esp the comments of
income (Schedule D), the House held that the Lords Macmillan and
but not "salaries, fees letter did not have the Atkin)
or wages" (Schedule E) effect of altering this. In
• The scheme was doing so, their Lordships
designed to convert made the now-famous
salary into an annual observations about a
payment subject arranging his
• Through a covenant, affairs to minimise tax.
the Duke agreed to
pay a weekly annuity
to his gardener for a
period of seven years;
in a separate letter,
the gardener
acknowledged that he
would not expect to
be paid more than his
current salary
(including the
proposed annuity)
• The Revenue's case
was that this was 'in
substance' a payment
of salary and not an
annual payment
2 Ramsay v IRC Lord Wilberforce said that Lord Wilber-force's careful

• To create an the courts are entitled to definition makes it clear
allowable loss, a construe a transaction in a that Ramsay is not a
finance company way intended by the principle imposed by the
designed a series of parties themselves and courts but simply a call to
transactions which, at that capital gains tax is a construe the statute
one stage, produced tax on gain, not (hence "such a loss or gain
a loss and, at another, "arithmetical differences". as the statute is dealing
an (exempt) A circular transaction with").
chargeable gain. The producing a gain and loss
funds for the scheme is not "such a loss or gain
came from the finance as the statute is dealing
company, not the with".
taxpayer.
• It was a pre-ordained,
circular transaction in
which every stage was
planned (see Tem-
pleman LJ's colourful
description of it in the
CA).

3 Furniss v Dawson The House of Lords This is without doubt the
• Mr Dawson wished to applied the 'Ramsay closest the English courts
sell the family principle' and held that the have come to applying an
business ('the transaction was taxable. anti-avoidance rule
operating companies') The statement of principle regardless of the
to Wood Ba-stow. by Lord Brightman makes provisions of the statute in
• To postpone the no reference to the question. It is regarded as
capital gains tax statutory provision. Lord doubtful law today,
liability he would incur Roskill commented that particularly after MacNiven
on the sale of his this decision would finally and BMBF.
shares, the Dawson exorcise the ghost of the
family shares in the Duke of Westminster.
operating companies
were exchanged for
the shares of a newly
incorporated
company called
Green-jacket (Step 1);
Green-jacket then sold
the shares of the
operating company to
Wood Bastow (Step
2).
• Step 1 was not
taxable because it was
exempt as a business
reorganisation. The
question was whether
Green-jacket could be
ignored as an artificial
step in a preordained
transaction.
4 MacNiven v Westmoreland The House of Lords held Lord Hoffmann's analysis

Investment • Under income tax that the taxpayer was is particularly important:
legislation, a taxpayer entitled to deduct the sum he distinguished between
could not deduct paid. 'legal' (such as 'paid') and
interest until it was 'commercial' (such as
actually paid (not 'loss') terms.
accrued).
Westmoreland had a
large interest liability
but no funds to pay it.
• It received a loan
from the lender (which
was also its parent
company). The loan
was used to pay the
interest. The only
object of this circular
transaction was the
tax benefit.

5 BMBF v The House of Lords Along with Mac-Niven, this
Mawson • This was a scheme unanimously held that the decision illustrates that
devised for the taxpayer was entitled to Furniss v Dawson, although
purpose of obtaining succeed. Lord Nicholls not expressly over-ruled,
capital allowances emphasised that Ramsay is no longer good law.
under s 24(1) of the is not a principle of Had Lord Brightman's
Capital Allowances construction independent formula applied, the
Act, 1990 of the statute but simply Revenue would have
• BMBF, the taxpayer, an instance of statutory prevailed in both cases.
borrowed £91 million interpretation. Under the
from a Barclays group CAA, where the lessor
company and used it obtained his money is
to buy a pipeline from irrelevant.
the Irish Gas Back,
which was leased back
to the Board;
• The Board's liability to
pay the lease rental
was to be discharged
by a Barclays group
company, in
consideration of which
the entire £91 million
was charged to
another Barclays
group company
• The net result was that
£91 million remained
within the Barclays
group but BMBF was
able to claim a capital
allowance for leasing
the pipeline;

6 Tower MCashback LLP v The Supreme Court This case does not decide
Revenue and Customs • This was also a unanimously held that the a point of principle; the
Commissioners scheme intended to taxpayer was not entitled conclusion was inevitable
obtain capital to the capital allowances. given the finding of the
allowances. Lord Walker suggested Special Commissioners.
• An LLP agreed to pay that Lord Hoffmann's
£27.5 million it had distinction between legal
borrowed on non- and commercial concepts
recourse terms to can be misleading.
MCash-back to
acquire the right to
use software and a
2.5% interest on
income generated by
it.
• The Special
Commissioners found
that the value of the
software was far
lower than the sum
paid for it. Nor was
the £27.5 million paid
to Mcash-back—in
accordance with a
solicitor's undertaking,
it was paid directly to
R&D Investments as
security.
71. Tax Avoidance and Tax Mitigation.—

There is still no universally acceptable definition of "tax avoidance". There is no difficulty in defining "tax evasion" which, in simple
terms, will mean violating statutory provisions to evade payment of tax. But "tax avoidance" has been given a bad connotation
and has been described – erroneously, it is submitted - as "economically undesirable and inequitable" in the Revised Discussion
Paper on DTC, 2010. A reference is made to the distinction between tax mitigation and tax avoidance. It has clarified that GAAR
provisions do not envisage that every arrangement for tax mitigation would be liable to be classified as impermissible avoidance
agreement. In the Finance Minister's Budget Speech for 2012-2013, para 154 mentioned that GAAR was being introduced to
counter "aggressive" tax avoidance schemes, although subject to a review by a GAAR panel.
In the memorandum to the Finance Bill, 2017, a reference is also made to GAAR being intended to deal with aggressive tax
planning.
The use of such phrases only creates more confusion and breeds litigation. The Act contains several provisions that give an option
to the assessee to choose from two or more alternatives. An option that results in the least amount of tax is usually chosen and is
indeed a measure to avoid tax that would arise if another option was chosen. There is thus no difference between tax avoidance
and tax mitigation where the assessee chooses an option that is legally permissible. Even in the context of international
investments, the choice of routing investments through Mauritius or other countries which have a favourable tax regime cannot
be treated as "aggressive" tax avoidance measures or impermissible arrangements.
Therefore, it is submitted that a clear distinction must be maintained between tax avoidance and tax evasion. It must also be
understood that tax avoidance which is legally permissible is nothing but tax mitigation and can never be treated as an
impermissible avoidance agreement. It will be helpful if the odious connotation given to tax avoidance is eliminated at the earliest
and phrases like "aggressive tax planning" are avoided.
After almost 100 years, the judicial rulings have demarcated the boundary that lies between tax avoidance and tax evasion. There
can be no dispute that legitimate steps in a transaction, which have no commercial purpose except to avoid tax, will fall in the
category of tax evasion because, in substance, the transactions have no commercial purpose except to "evade" tax. Such
transactions would fall within the category of "colourable devices".
A perusal of several orders of the AAR show repeated attempts by the Department to deny legitimate treaty benefits by alleging
tax avoidance in every case. It is forgotten that the preamble to most of the DTAAs with India, apart from elimination of double
taxation, is also to promote economic co-operation, mutual trade and investment by providing economic benefits to foreign
investors. The incentive for which are tax benefits like exemptions, ceilings limits on rate of tax, tax credit, tax sparing and so on.
[See further, commentary under Chapter X-A for commentary on General Anti-Avoidance Rules, at pp 2097-2115.]
72. Sub-section (2): 'It Extends to the Whole of India'.—

The Act has been extended:
(i) to Dadra and Nagar Haveli, Goa, Daman and Diu, and Pondicherry, by the Taxation Laws (Extension to Union Territories)
Regulation, 1963 with effect from the assessment year 1963–64,
(ii) to the Continental Shelf of India and the Exclusive Economic Zone of India by the Central Government's Notification dated
March 31, 1983 issued under the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones
Act, 197687. with effect from April 1, 198388. in respect of income derived by every person from:
(a) the prospecting for or extraction or production of mineral oils in those two areas,
(b) the provision of any services or facilities or supply of any ship, aircraft, machinery or plant (whether by way of sale or hire)
in connection with any activities mentioned in (a) above, and
(c) the rendering of services as an employee of any person engaged in any of the activities mentioned in (a) or (b) above, and
(iii) to Sikkim by the President's Notification dated November 7, 1988 issued under the Constitution,89. read with s 26 of the
Finance Act, 1989, with effect from the assessment year 1990–91.
1. Readers are advised to read an interesting analysis of the India's first income-tax by CL Jenkins, 1860: India's First Income-tax, British Tax Review,
Issue 1, 2012.
2. For the unamended text of the Income-tax Act, 1961, see 43 ITR (St.) 25 and for the text of the Income-tax Bill, 1961, see 42 ITR (St.) (Supp) 1.
3. For full text, see 326 ITR (St.) 421.
4. Office Order F No. 370149/230/2017, November 22, 2017.
5. Office Order F No. 370149/230/2017, November 26, 2018 and June 24, 2019.
6. New Delhi Municipal Comm v State of Punjab AIR 1997 SC 2847 [LNIND 1996 SC 2181] , (1997) 7 SCC 339 [LNIND 1996 SC 2181] .
7. CIT v Harijan Nigam 226 ITR 696.
8. India Cements Ltd v State of Tamil Nadu 188 ITR 690, 699 (SC).
9. Chhotabhai v UOI AIR 1952 Nag 139 .
10. Ghulam Hussain v State of Rajasthan AIR 1963 SC 379 [LNIND 1962 SC 180] .
11. Krishi Utpadan v Shree Mahalaxmi 1995 Supp (3) SCC 433 .
12. State of Kerala v Joseph AIR 1958 SC 296 [LNIND 1957 SC 266] .
13. India Cement v State of TN 188 ITR 690 (SC).
14. Article 254.
15. India Cement v State of TN 188 ITR 690 (SC); Aboobacker v UOI 177 ITR 358; Sat Pal v ETC 185 ITR 375; Tuhi Ram v LAC 199 ITR 490; Ashoka v CIT
209 ITR 679.
16. All India FTP v UOI 256 ITR 401.
17. All Ker CAA v UOI 258 ITR 679; Vijayan v UOI 215 ITR 371; Ker State Coir Corpn v UOI 210 ITR 121. See also post under 'Legislative Competence'.
18. Sanctus Drugs v UOI 225 ITR 252.
19. For a detailed analysis of a provisions of the Constitution in relation to tax laws, the following commentaries may be referred to: Constitutional
Law of India, HM Seervai, 4th Ed., 1991; Datar on Constitution of India, Arvind P Datar, 2nd Ed., 2007; Tax, Constitution and the Supreme Court, Karthik
Sundaram, 2019.
20. Jagannath Baksh Singh v State of UP 46 ITR 169 (SC); Municipal Council, Kota v Delhi Cloth 249 ITR 560 (SC); Vijayan v UOI 215 ITR 371.
21. RK Garg v UOI 133 ITR 239 (SC); Government of Andhra Pradesh v P. Laxmi Devi (2008) 4 SCC 720 [LNIND 2008 SC 473] ; Rashmikant Kundalia v
UOI 373 ITR 268, 278-279.
22. CIT v Shah Elec 207 ITR 350.
23. Kunhammed v UOI 176 ITR 481; Aboobacker v UOI 177 ITR 358; R Laxmichand v UOI 184 ITR 376; Tuhi Ram v LAC 199 ITR 490; Vijayan v UOI 215 ITR
371; All India FTP v UOI 228 ITR 68; All India FTP v UOI 236 ITR 1; Shashikant Kale v UOI 185 ITR 104 (SC); Apeejay Surendera Park Hotels Ltd. v UOI 383
ITR 697, 718.
24. Amrit Banaspati Co. Ltd. v UOI (1995) 3 SCC 335 [LNIND 1995 SC 232] ; RK Garg v UOI 133 ITR 239 (SC); Indian Express Newspaper (Bombay) P. Ltd.
v ACIT 403 ITR 341.
25. Government of Andhra Pradesh v Smt. P. Laxmi Devi (2008) 4 SCC 720 [LNIND 2008 SC 473] ; Rashmikant Kundalia v UOI 373 ITR 268, 278-279.
26. Federation of Hotel and Restaurant Assn v UOI 178 ITR 97 (SC); Goodyear v State of Haryana 188 ITR 402 (SC); India Cement v State of TN 188 ITR
690 (SC).
27. Kanchenjunga Properties v State of Sikkim 191 ITR 575; UOI v Tata Tea Co. Ltd. 398 ITR 260, 272-273 (SC).
28. Geep Flashlight v UOI 218 ITR 638.
29. UOI v Sanyasi Rao 219 ITR 330, AIR 1996 SC 1219 [LNIND 1996 SC 361] , (1996) 3 SCC 465 [LNIND 1996 SC 361] ; CWT v Karan Singh 200 ITR 614
(SC); India Cement v State of TN 188 ITR 690 (SC); Goodyear v State of Haryana 188 ITR 402 (SC); Express Hotels v State of Gujrat 178 ITR 151 (SC); Elel
Hotels v UOI 178 ITR 140 (SC); Kunhammed v UOI 176 ITR 481; Aboobacker v UOI 177 ITR 358; Sanyasi Rao v Govt of AP 178 ITR 31; Sat Pal v ETC 185 ITR
375; Sri Venkateswara v UOI 189 ITR 741; Tuhi Ram v LAC 199 ITR 490; Ashoka v CIT 209 ITR 679.
30. Elel Hotels v UOI 178 ITR 140 (SC); Express Hotels v State of Gujrat 178 ITR 151 (SC); India Cement v State of TN 188 ITR 690 (SC); Aboobacker v UOI
177 ITR 358.
31. All India FTP v UOI 256 ITR 401.
32. All Ker CAA v UOI 258 ITR 679; UOI v Harbhajan Singh Dhillon 83 ITR 582 (SC).
33. DIT v New Skies Satellite BV 382 ITR 114, 138, 141, 145-146.
34. Elel Hotels v UOI 178 ITR 140 (SC); CIT v Karthikeyan 201 ITR 866 (SC); UOI v Sanyasi Rao 219 ITR 330 (SC); Sat Pal v ETC 185 ITR 375.
35. UOI v Sanyasi Rao 219 ITR 330, AIR 1996 SC 1219 [LNIND 1996 SC 361] , (1996) 3 SCC 465 [LNIND 1996 SC 361] ; Aboobacker v UOI 177 ITR 358; Sat
Pal v ETC 185 ITR 375; Ashoka v CIT 209 ITR 679; Attar Singh v ITO 191 ITR 667 (SC).
36. UOI v Sanyasi Rao 219 ITR 330, AIR 1996 SC 1219 [LNIND 1996 SC 361] , (1996) 3 SCC 465 [LNIND 1996 SC 361] .
37. See under s 64, 'Constitutional validity'.
38. Federation of Hotel and Restaurant Association of India v UOI 178 ITR 97 (SC).
39. Jagannath Baksh Singh v State of UP 46 ITR 169.
40. Venugopala Varma v UOI 74 ITR 49.
41. See the following cases where the general principles and scope of art 14 have been discussed: Chunnilal v UOI 221 ITR 459; Geep Flashlight v UOI
218 ITR 638; Pranlal v UOI 212 ITR 362; Seetha Rama v State of Karnataka 199 ITR 588; Shanthi v Asst DI 197 ITR 330; Banashankari v State of
Karnataka 194 ITR 650.
42. Kedar Nath v State of WBAIR 1953 SC 404 [LNIND 1953 SC 67] ; PB Roy v UOIAIR 1972 SC 908 [LNIND 1972 SC 103] ; Banashankary v State of
Karnataka 182 ITR 8.
43. Binoy Viswam v UOI 396 ITR 66, 139 (SC).
44. Sarala Birla v CWT 176 ITR 98 (SC); Fed of Hotel and Restaurant Assn v UOI 178 ITR 97 (SC); Elel Hotels v UOI 178 ITR 140 (SC); Shashikant Kale v
UOI 185 ITR 104 (SC); Bharat v CWT 207 ITR 1 (SC); UOI v Sanyasi Rao 219 ITR 330 (SC); Municipal Council, Kota v Delhi Cloth 249 ITR 560 (SC);
Banashankary v State of Karnataka 182 ITR 8; Venkateswara v UOI 189 ITR 741; Sri Banashankari v State of Karnataka 194 ITR 650; Sattur's
Sushrushalya v State of Karnataka 198 ITR 480; Dollar v UOI 204 ITR 103; Gopalakrishnan v CBDT 206 ITR 183; Syed v UOI 209 ITR 746; Pranlal v UOI 212
ITR 362 (wide discretion in matters of concession or exemption); Vijayan v UOI 215 ITR 371; Modi Engg v UOI 218 ITR 50; All India FTP v UOI 228 ITR 68;
All India FTP v UOI 236 ITR 1; DCIT v Central Concrete 236 ITR 595; Netley v ACAgIT 238 ITR 876; All India FTP v UOI 256 ITR 401; All Ker CAA v UOI 258
ITR 679.
45. Titanium Equipments v UOI 207 ITR 566.
46. Federation of Hotel and Restaurant Assn v UOI 178 ITR 97 (SC); Dollar v UOI 204 ITR 103.
47. Budhan v State of Bihar AIR 1955 SC 191 [LNIND 1954 SC 166] ; Hanif v State of Bihar AIR 1958 SC 731 [LNIND 1958 SC 58] ; Fed of Hotel and
Restaurant Assn v UOI 178 ITR 97 (SC); Seetha Rama v State of Karnataka 199 ITR 588; Hitech v UOI 227 ITR 446; Khandubhai v DCIT 236 ITR 73; B
Noorsingh v UOI 249 ITR 378; BHEL Employee's Association v UOI 261 ITR 15; Avani Exports v CIT 348 ITR 391.
48. Shanthi v Asst DI 197 ITR 330; Vijayan v UOI 215 ITR 371; All India FTP v UOI 236 ITR 1; PA Jose v UOI 410 ITR 55.
49. BHEL Employee's Association v UOI 261 ITR 15.
50. Federation of Hotel and Restaurant Assn v UOI 178 ITR 97 (SC); Dollar v UOI 204 ITR 103; Pepsi Foods P. Ltd. v ACIT 376 ITR 87.
51. Dutta v Lawrence 68 ITR 272 (SC).
52. CIT v Kelvinator 256 ITR 1 (FB).
53. Sant Lal v UOI 222 ITR 375.
54. Sant Lal v UOI 222 ITR 375.
55. Geep Flashlight v UOI 218 ITR 638; Dollar v UOI 204 ITR 103.
56. Venkateswara v UOI 189 ITR 741.
57. Federation of Hotel and Restaurant Assn v UOI 178 ITR 97 (SC), followed in Hotel Manasasarovar v UOI 213 ITR 668; Express Hotels v State of Gujrat
178 ITR 151 (SC) (mere excessiveness of a tax or that it affects the earnings cannot per se be held to be violative of this article); Sukhdev v UOI 211 ITR
157 (mere hardship to some persons is insufficient for the purpose of invalidating a section under this article).
58. Prashanti Medical Services and Research Foundation v UOI 416 ITR 485 (SC).
59. Attar Singh v ITO 191 ITR 667 (SC).
60. See post under 'Retrospective legislation'.
61. Ramkrishna v State of Bihar 50 ITR 171.
62. Avani Exports v CIT 348 ITR 391, 433-438 (There is discrimination between assessees' whose assessments were still pending although such benefit
will be available to the assessees whose assessments have already been concluded).
63. United States v Gilmore 8 Wall (75 US) 330, 19 LED 396 (1869); Peony Park v OI Malley 223 F.2nd 668 (8th Cir. 1955), County of Sacramento v State of
California 134 Cal. App 3d. 428; Marriage of Davies, In Re, 105 111 App 3d 661 (1982).
64. Ujjambai v State of UPAIR 1962 SC 1621 [LNIND 1962 SC 584] .
65. Bashesharnath v CIT 35 ITR 190 (SC).
66. Sanyasi Rao v Govt of AP 178 ITR 31, affirmed by SC in 219 ITR 330.
67. Omkar Kanwar v UOI 254 ITR 337; CWT v Jindal 194 ITR 539; Star Television News Ltd. v UOI 317 ITR 66 – affirmed in UOI v Star Television News Ltd .
373 ITR 528 (SC).
68. Venkateswara v UOI 189 ITR 741; India Trade Promotions Organisation v DGIT 371 ITR 333 (see proviso to 2(15) read down).
69. CIT v Valli Cotton Traders P. Ltd . 288 ITR 400, (2007) 208 CTR (Mad) 242—following Calcutta Gujarati Education Society v Calcutta Municipal
Corporation(2003) 10 SCC 533 [LNIND 2003 SC 703] , AIR 2003 SC 4278 [LNIND 2003 SC 703] .
70. Chandra Kumar v UOI 228 ITR 725, AIR 1997 SC 1125 [LNIND 1997 SC 488] .
71. Dwarkanath v ITO 57 ITR 349 (SC); Calcutta Discount v ITO 41 ITR 191, 207 (SC); Beharilal v Comr 63 ITR 555, 563.
72. State of U.P. v Mohammad Nooh AIR 1958 SC 86 [LNIND 1957 SC 99] ; Titaghur Paper Mills Co. Ltd. v State of Orissa(1983) 2 SCC 433 [LNIND 1983
SC 111] ; Harbanslal Sahnia v Indian Oil Corpn. Ltd. (2003) 2 SCC 107 [LNIND 2002 SC 1397] ; State of H.P. v Gujarat Ambuja Cement Ltd . (2005) 6 SCC
499 [LNIND 2005 SC 534] .
73. Tata Engineering and Locomotive Co. Ltd. v ACCT(1967) 2 SCR 751 [LNIND 1967 SC 48] .
74. For further reading please see: Constitutional Law of India, HM Seervai, 4th Ed., 1991; Datar on Constitution of India, Arvind P Datar, 2nd Ed., 2007;
Tax, Constitution and the Supreme Court, Karthik Sundaram, 2019.
75. Vijayaraghavan v CIT 182 ITR 352; Rao v UOI 217 ITR 843; Trilok Chandra Garg v ADIT 218 ITR 97; Narendra Kumar v ITO 234 ITR 475;
Venkateswara Rao v Secretary, CBDT 252 ITR 457; Mangathayaramma v TRO 255 ITR 127; Institute of Chartered Financial Analysts v ACIT 256 ITR 115;
Munit Ahmed v UOI 256 ITR 492; Rakesh Kumar v CIT 257 ITR 268; Modern Gun v ITO 188 ITR 111; Mehar Singh v ITO 189 ITR 312; Sudhir Kumar v DI 202
ITR 829; Primetime Media v Shahabadpuri 217 ITR 417; Thomas v UOI 235 ITR 526; Chennai Marketing v CIT 245 ITR 485; Brindco Sales v Appropriate
Authority 248 ITR 465; Chartered Housing v Appropriate Authority 250 ITR 1; Abraham v ACIT 255 ITR 540.
76. Phool Chand v ITO 203 ITR 456 (SC); Raymond Woollen v ITO 236 ITR 34 (SC); Bal Ram Jakhar v CIT 250 ITR 393; Bhajan Lal v CIT 250 ITR 399;
Hindustan Aluminium v ITO 254 ITR 370; Trivandrum Club v ADIT 256 ITR 61; Gurera Gas v CIT 258 ITR 170; Swaraj Engine v ACIT 260 ITR 202.
77. Raymond Woollen v ITO 207 ITR 929. Cf Dunlop India (No 2) v ACIT 183 ITR 532; Ramjanki Devi v CIT 188 ITR 63; Morarjee Goculdas v Das IAC 189
ITR 406.
78. Bharathan v ITO 182 ITR 146; Government of India v Maxim 190 ITR 101; Guru Nanak Estates v CIT 208 ITR 118; Jayantil Lal v ACIT 233 ITR 588; ACIT
v Jayanti Lal 244 ITR 500; Arjun Singh v ADIT 246 ITR 363; Rajesh Sharma v ACIT 249 ITR 15; JCT Ltd v ITAT 258 ITR 291.
79. Claridges v ITO 123 ITR 844; Mahesh Prasad v ITO 188 ITR 239; Mercury Travels v DCIT 258 ITR 533.
80. Manak Chand v UOI 256 ITR 305.
81. Ranganatham v ITO 39 ITR 730, 739.
82. For examples, See under ss 143 and 147, 'Writ, direction or order'. See also Samnuggar Jute v CIT 181 ITR 221; Dunlop India v ACIT 183 ITR 528;
Orient (Goa) v UOI 210 ITR 896; Reckitt and Coleman v ACIT 251 ITR 306; Rudrachar v DIT 257 ITR 549; Kumar Films v CIT 258 ITR 257; Sita Holiday v
CCIT 258 ITR 751; Marina Ship Brokers v ITO 417 ITR 453.
83. Chandravadan v CWT 182 ITR 103; Priya Rubber v ITO 182 ITR 433; Radharani Tea v ITO 184 ITR 581; Tadikonda Ramula v ITO 186 ITR 148;
Khajanchi Paper v CIT 221 ITR 694; Indo Asahi v ITO 222 ITR 534; Brooke Bond v CIT 222 ITR 540; Mohd Moinuddin v ITO 240 ITR 220; Bhagwandas
Shobhalal v CIT 248 ITR 630; Bal Ram Jakhar v CIT 250 ITR 393; Orient Engineering v DCIT 252 ITR 573; Mitsubishi v JCIT 256 ITR 458.
84. Bhagwandas Shobhalal v CIT 248 ITR 630; Straw Products v ACIT 252 ITR 444.
85. Barnwal Abhushan v CIT 181 ITR 269; Pentron Engineering v ITO 185 ITR 81; Roy v CIT 211 ITR 500.
86. See also under s 256(1) and (2), 'Question regarding validity of any provision of the Act'; and ante under 'Bar of suit to set aside or modify
assessment: Maintainability of suit as regards ultra vires provision'.
1. Appropriate Authority v Sudha Patil 235 ITR 118 (SC); UOI v Shatabadi Trading 251 ITR 93.
2. Shamsher v ITO 90 ITR 807.
3. Mohamedaly v ITO 69 ITR 807; Jorwar Singh Baid v CIT 183 ITR 664; State of U.P. v Labh Chand 200 ITR 647 (SC); Hardeva v DCIT 230 ITR 875;
Dayaram Agarwal v ITO 261 ITR 419.
4. Virudhunagar Steel v Govt of Madras 70 ITR 726 (SC); Anil Kumar Bindal v DGIT 255 ITR 493 (petition withdrawn).
5. Beni Ram Mool Chand v TRO 183 ITR 652; Beni Ram Mool Chand v TRO 187 ITR 601; KMA International Ltd v CBDT 194 ITR 332; Jayamal Jayantilal v
CCIT 230 ITR 142; Hope Textiles v UOI 205 ITR 508 (SC). See further under various sections noted on p 3086.
6. OCM v CIT 138 ITR 689; Deepchand v ITO 145 ITR 676. See also CST v Auraiya 167 ITR 458 (SC); Salonah v Supdt of Taxes 173 ITR 42 (SC); Asia
Tobacco v UOI 155 ITR 568, 590–92; Parthasarathy v Dipsi 173 ITR 497; Kamalpur Tea v Supdt of Taxes 175 ITR 142; U Foam v Coll 175 ITR 326; Board's
Circular dated October 21, 1980, 130 ITR (St.) 1 (ss 192 to 194D). Cf Sundaram v ITO 163 ITR 662; Dhrangadhra Municipality v Dhrangadhra Chemical
174 ITR 77 (Guj).
7. Hope Textiles v UOI 205 ITR 508 (SC).
8. Lekh Raj Seth Ramadoss v Shaw AIR 1966 SC 334 [LNIND 1965 SC 156].
9. Grindlays v ITO 122 ITR 55 (SC).
10. Manuel v ITO 226 ITR 616; LIC v CIT 245 ITR 224; CIT v Avery India 255 ITR 476.
11. East India Comm v Coll AIR 1962 SC 1893 [LNIND 1962 SC 228], 1903.
12. Thangal v Venkatachalam Potti 29 ITR 349 (SC); Fenner v DCIT 241 ITR 672; Officer' Assn v UOI 139 ITR 937 (excessive deduction of tax at source).
13. Seshasayee Paper & Boards Ltd. v ACCE1979 ELT J 238 (Mad); Godrej & Boyce Mfg. Co. P. Ltd. v UOI 1984 (18 ELT 172 (Bom); Tata Engg. &
Locomotive Co. Ltd. v UOI 1991 (52) ELT 500 (Bom).
14. Shiva Glass Works Co. v UOI 1982 ELT 365 (Cal); Standard Dye Chem v UOI 1980 ELT 181 (Guj).
15. Madras Rubber Factory Ltd. v ACCE 1981 ELT 565 (Mad).
16. Standard Dye Chem Ltd. v UOI 1980 ELT 181 (Guj).
17. State of UP v Harish Chandra 1996 (85) ELT 209.
18. Santosh v TRO 42 ITR 715.
19. Santosh v TRO 42 ITR 715, on review 46 ITR 411. Jagdambika v ITO 76 ITR 619.
20. Isha Beevi v TRO 101 ITR 449 (SC).
21. Prabodh v State of UP AIR 1985 SC 167 [LNIND 1984 SC 376].
22. Scientific Instruments Co. Ltd. v CC 1980 ELT 89 (Cal); Bengal Paper Mills Co. Ltd. v SCE 1985 (20) ELT 302 (Cal); CCE v Sanwarmal Purohit1979 ELT
(J 613); Tata Yodogawa Ltd. v UOI 1987 (32) ELT 521 (Pat); Madura Coats Ltd. v ACCE 1990 (48) ELT 321 [LNIND 1990 MAD 136] (Mad).
23. King v Brixton IT Comrs 6 TC 195; Devji Ravji v Balasubramaniam 210 ITR 925; KM Scientific Research Centre v Lakshman Prasad 229 ITR 23;
Saradbhai M Lakhani v ITO 231 ITR 779; Gujarat Gas v JCIT 245 ITR 84; Nicco Corpn v CIT 251 ITR 791; JCT Ltd v ITAT 258 ITR 291; Mercury Travels v DCIT
258 ITR 533.
24. J.K. Synthetics Ltd. v CCE 1985 (231) ELT 410 (Del).
25. Hind Syntex Ltd. v UOI 1985 (19) ELT 35 [LNIND 1984 MP 98] (MP); Techni-Glass Ltd. v UOI 1981 ELT 147 (Bom); MRF Ltd. v UOI 1985 (22) ELT 5
[LNIND 1985 BOM 150] (Bom).
26. Himalayan Plywood Industries Ltd. v CC 1986 (26) ELT 697 (Cal); Maganlal Gulab Chand Shah v UOI 1992 (59) ELT 235 (Guj); Parenteral Drugs
(India) Ltd. v UOI 2003 (157) ELT 5 [LNIND 2003 MP 738] (MP); IR v Hood Barrs 39 TC 683 (HL); Palanpur Traders v UOI 187 ITR 132; Guru Nanak Estates
v CIT 208 ITR 118; Abdul Majeed v ITO 209 ITR 821; Ajay Const v UOI 212 ITR 44; Balasubramania v ACIT 240 ITR 49; Sundarmal v DIT 244 ITR 810.
27. Metal Forgings P. Ltd. v UOI 1985 (20) ELT 280 (Del) following Super Traders v UOI 1983 ELT 258 (Del); British Physical Laboratories India Ltd. v
ACCE 1983 ELT 2270 (Kant); UOI v T.S.R. & Co . 1985 (22) ELT 701 [LNIND 1985 MAD 115] (Mad); Dege Nylomet Private Limited v ACC 1993 (67) ELT 270
(Cal), 275.
28. Dwijendralal v New Central Jute 112 ITR 568; Calcutta Electric v ITO 207 ITR 892; Leather Trends v CIT 215 ITR 690; CIT v ITAT 232 ITR 207.
29. Brahmananda v Gajapathinath 58 ITR 579 (order under art 227 of Constitution).
30. Susanta Kumar v UOI 185 ITR 627.
31. J. Pipes & Vessels Ltd. v UOI 1991 (56) ELT 40 (Bom); Laxmi Steel Company v CC1992 (62) ELT 690 (Guj) petitioner had committed breach of
contract. Govind Ram Agarwal v CC1992 (60) ELT 535 (Cal).
32. CIT v Vijaybhai N Chandrani 357 ITR 713 (SC).
33. University of Mysore v Govinda Rao AIR 1965 SC 491 [LNIND 1963 SC 341], 494.
34. State of Bihar v Kameshwar AIR 1965 SC 575 [LNIND 1963 SC 112].
35. BSNL v UOI(2006) 3 SCC 1 [LNIND 2006 SC 154] .
36. Beharilal Shyamsunder v STO 60 ITR 260 (SC).
37. Nivedita Sharma v Cellular Operators Assn. of India(2011) 14 SCC 337 .
38. Thansingh Nathmal v Supdt. of Taxes AIR 1964 SC 1419 [LNIND 1964 SC 26] , 1423; Titaghur Paper Mills Co. Ltd. v State of Orissa(1983) 2 SCC 433
[LNIND 1983 SC 111] .
39. Mafatlal Industries Ltd. v UOI(1997) 5 SCC 536 [LNIND 1996 SC 2186] B.P. Jeevan Reddy, J. (speaking for the majority of the larger Bench) (SCC p.
607, para 77).
40. Also see: G. Veerappa Pillai v Raman & Raman Ltd . AIR 1952 SC 192 [LNIND 1952 SC 18] ; CCE v Dunlop India Ltd. (1985) 1 SCC 260 [LNIND 1984
SC 367] ; Ramendra Kishore Biswas v State of Tripura (1999) 1 SCC 472 [LNIND 1998 SC 1075] ; Shivgonda Anna Patil v State of Maharashtra(1999) 3
SCC 5 [LNIND 1999 SC 126] ; C.A. Abraham v ITO(1961) 2 SCR 765 [LNIND 1960 SC 297] ; Titaghur Paper Mills Co. Ltd. v State of Orissa(1983) 2 SCC 433
[LNIND 1983 SC 111] ; H.B. Gandhi v Gopi Nath and Sons1992 Supp (2) SCC 312 ; Whirlpool Corpn. v Registrar of Trade Marks (1998) 8 SCC 1 [LNIND
1998 SC 970] ; Tin Plate Co. of India Ltd. v State of Bihar(1998) 8 SCC 272 ; Sheela Devi v Jaspal Singh(1999) 1 SCC 209 ; Punjab National Bank v O.C.
Krishnan(2001) 6 SCC 569 [LNIND 2001 SC 1690] .
41. Munshi Ram v Municipal Committee, Chheharta(1979) 3 SCC 83 [LNIND 1979 SC 174] , 88; UOI v Guwahati Carbon Ltd. (2012) 11 SCC 651 .
42. Harbanslal Sahnia v Indian Oil Corporation Ltd. (2003) 2 SCC 107 [LNIND 2002 SC 1397] ; Whirlpool Corporation v Registrar of Trade Marks (1998) 8
SCC 1 [LNIND 1998 SC 970] .
43. See further K.S. Rashid and Sons v Income Tax Investigation Commission AIR 1954 SC 207 [LNIND 1954 SC 9] ; Sangram Singh v Election TribunalAIR
1955 SC 425 [LNIND 1955 SC 2] ; UOI v T.R. VarmaAIR 1957 SC 882 [LNIND 1957 SC 91] ; State of U.P. v Mohd. Nooh AIR 1958 SC 86 [LNIND 1957 SC 99] ;
K.S. Venkataraman and Co. (P) Ltd. v State of MadrasAIR 1966 SC 1089 [LNIND 1965 SC 262] ; Raza Textiles v ITO 87 ITR 539, (1973) 1 SCC 633 .
44. UOI v Hindalco Industries2003 (153) ELT 481 (SC).
45. Parkar v Palekar 94 ITR 616, disapproved on another point in CIT v Piara Singh 124 ITR 40 (SC); Arvind Polycot v ACIT 222 ITR 280; Jamila Ansari v
IT Dept 225 ITR 490; Ajit Jain v UOI 242 ITR 302; Voest-Alpine v ITO 246 ITR 745; Foramer v CIT 247 ITR 436; Amir Uddin v ITO 248 ITR 550; Surat City
Gymkhana v DCIT 254 ITR 733; Mercury Travels v DCIT 258 ITR 533.
46. See under ss 222–23, 'Attachment and sale…'.
47. State of UP v Bahadur Singh 142 ITR 745 (SC); Sudamadevi v Commissioner 142 ITR 824 (SC); Mageshwari v CIT 201 ITR 472.
48. R. v Comptroller General of Patents(1953) 1 All ER 862 , affirmed in (1954) AC 321 (HL); Shaw Wallace v ITAT 240 ITR 579; ITO v Short 60 ITR 83 (SC);
Annamma v TRO 64 ITR 85 (habeas corpus); Dhanaraj Singh v CIT 218 ITR 312; HP Tourism Dev Corpn v UOI 238 ITR 38; Mohan Shet v State of
Karnataka 206 ITR174 (question of general public importance); Fenner v DCIT 241 ITR 672. Cf Rashid v IT Investigation Commission 25 ITR 167, 174 (SC);
Purnendu v ITO 48 ITR 259; Alfred v ITO 32 ITR 401; Gee Vee v CIT 99 ITR 375.
49. Mani and Co. v ITO 182 ITR 357; Mani and Co. v ITO 185 ITR 241; Salar Publications v ITO 235 ITR 13; English Electric v CIT 235 ITR 35; Harbhajan
Singh v Bansal ITO 235 ITR 431; Institute of Chartered Financial Analysts v ACIT 256 ITR 115.
50. Bengal Immunity Co. Ltd. v State of BiharAIR 1955 SC 661 [LNIND 1955 SC 122] , (1955) 2 SCR 603 [LNIND 1955 SC 122] .
51. Cognizant Technology Solutions India P. Ltd. v DCIT 416 ITR 462, affirmed in Cognizant Technology Solutions India P. Ltd. v DCIT 418 ITR 576;
Genpact India P. Ltd. v DCIT 419 ITR 370.
52. Genpact India P. Ltd. v DCIT 419 ITR 440 (SC).
53. As discussed in the commentary to ss 246 and 246A, this expression only includes those assessees who deny their liability to be assessed under the
Act itself, and not to assessees who deny liability in respect of a particular transaction.
54. CIT v Chhabil Dass Agarwal 357 ITR 357 (SC), (2014) 1 SCC 603 [LNIND 2013 SC 733], 357 ITR 357 (SC).
55. Himmatlal Harilal Mehta v State of MP 1954 SCR 1122 [LNIND 1954 SC 44].
56. Bengal Immunity Co. Ltd. v State of Bihar (1995) 2 SCR 603.
57. Calcutta Discount Co. Ltd. v ITO 41 ITR 191 (SC).
58. Ram and Shyam Co. v State of Haryana (1985) 3 SCC 267 [LNIND 1985 SC 188].
59. UOI v Kamalakshi Finance Corporation AIR 1992 SC 711; Filterco v CST (1986) 2 SC 103; CST v Amara Raja Batteries Ltd. (2009) 8 SCC 209 [LNIND
2009 SC 2248].
60. Raza Textiles Ltd. v ITO (1973) 1 SCC 633, 87 ITR 539 (SC).
61. Arun Kumar v UOI (2007) 1 SCC 732 [LNIND 2006 SC 735]; Godrej Sara Lee Ltd. v CAA (2009) 14 SCC 338 [LNIND 2009 SC 602].
62. Municipal Board v State Transport AuthorityAIR 1965 SC 458 [LNIND 1962 SC 383] ; Fedco v BilgramiAIR 1960 SC 415 [LNIND 1959 SC 219] .
63. Nasir Ahmed v Asstt. Custodian-GeneralAIR 1980 SC 1157 [LNIND 1980 SC 149] ; North Bihar Agency v State of BiharAIR 1981 SC 1758 .
64. ORYX Fisheries (P) Ltd. v UOI (2010) 13 SCC 427 [LNIND 2010 SC 1071].
65. Kumaon Mandal Vikas Nigam Ltd. v Girja Shankar Pant (2001) 1 SCC 182 [LNIND 2000 SC 1362].
66. Siemens Ltd. v State of Maharashtra (2006) 12 SCC 33 [LNIND 2006 SC 1069]; Wabco India Ltd. v DCIT 407 ITR 317.
67. CCE v Shital International (2011) 1 SCC 109 [LNIND 2010 SC 1022]; CCE v Champdany Industries Ltd. (2009) 9 SCC 466 [LNIND 2009 SC 2180].
68. Mysore Acetate & Chemical Co. Ltd. v ACCE(1984) ECC 38 (Kar), 1984 (17) ELT 319 [LNIND 1983 KANT 71] (Kar); Y. Moideen Kunhi v CCE(1986) 7
ECC 104 (Kar), 1986 (23) ELT 293 (Kar); Alembic Glass industries Ltd. v ACCE(1981) 10 ECC 281 (Kar); 1986 (24) ELT 23 (Kar); Punjab Anand Batteries Ltd.
v AC-CE(1991) 36 ECC 167 (P&H); Super Rubber Works v ACCE 1992 (62) ELT 498 (Mad); Thessiamma v UOI 2000 (120) ELT 602 [LNIND 1999 KER 201]
(Kar).
69. Hindustan Development Corporation Ltd. v UOI 1995 (80) ELT 493 (Raj).
70. Joshi Technologies International Inc. v UOI 374 ITR 322, 366-367 (SC).
71. Meher & Meher v Board of Trustees, Port of Bombay 1984 (16) ELT 217 (Bom); Shri Vallabh Glass Works Ltd. v UOI1984 (16) ELT 171 (SC); see also
Parle Products Ltd. v UOI1987 (30) ELT 180 (Bom); Tungabhadra Machinery & Tools Ltd. v UOI 1988 (37) ELT 179 (AP); V. Vembu Iyer v UOI 1984 (15) ELT
125 , 129 (Kant); Rup Diamonds v UOI1989 (40) ELT 226 [LNIND 1989 SC 643] , 229 (SC); Ramnugger Cane & Sugar Co. Ltd. v SCE1989 (41) ELT 387 (Cal);
Narendra M. Mehta v CC1992 (61) ELT 33 (Kar).
72. Vedpaul Anand v CCI&E1984 (15) ELT 113 , 117 (P&H), Kapri International (Pvt) Ltd. v UOI1991 (32) ECR 201 (All); Salonah Tea Company Ltd. v
Superintendent of Taxes1988 (33) ELT 249 [LNIND 1987 SC 865] (SC); 1992 (61) ELT 447 (Guj); Atosh & Sons Pvt. Ltd. v ACCE1992 (60) ELT 220 (Cal).
73. State of Uttar Pradesh v Bahadur Singh(1983) 142 ITR 745 (SC); see also Sudama Devi v CIT 142 ITR 824 (SC); Raja Jagadambika Pratap Narain
Singh v CBDT(1975) 100 ITR 698 [LNIND 1975 SC 562] (SC); UOI v ITC Limited 1993 (67) ELT (SC).
74. Kishore Jagjivandas Tanna v JDIT [2020] 15 ITR-OL 265 (SC).
75. PCIT v Income-tax Settlement Commission [2020] 15 ITR-OL 255 (SC).
76. Commercial Corporation v ITO 201 ITR 348.
77. Timken India v CIT 256 ITR 460.
78. Bhandari v IT Dept 214 ITR 735.
79. Bar Council of AP v Govt of A.P. 210 ITR 203.
80. Krishna Murthy v CIT 152 ITR 163 (but each must individually pay court-fee). Cf Shenoy v Comm Tax Officer 155 ITR 178 (SC).
81. U.P. Solvent Extractors' Association v UOI1989 (39) ELT 18 (All).
82. Rajagopal v UOI 233 ITR 678.
83. Abdul Wahid v UOI 185 ITR 583.
84. CWT v Guna Shenoy 197 ITR 325.
85. Waryam Singh v AmarnathAIR 1954 SC 215 [LNIND 1954 SC 7] ; Banerji v MukherjeeAIR 1953 SC 58 [LNIND 1952 SC 85] ; Nagendra v ComrAIR 1958
SC 398 [LNIND 1958 SC 6] ; Satyanarayan v MallikarjunAIR 1960 SC 137 .
86. Chandra Kumar v UOI 228 ITR 725 (SC); Madras Bar Association v UOI 368 ITR 42 (SC).
87. CWT v Guna Shenoy 197 ITR 325; Titanium Equipments v UOI 207 ITR 566; DGIT v Spacewood Furnishers P. Ltd. 374 ITR 595 (SC).
88. CIT v Boots 214 ITR 175.
89. CIT v Lokmat Papers 216 ITR 199.
90. Keshavji Ravji v CIT 183 ITR 1 (SC); CAgIT v Plantation Corpn 247 ITR 155 (SC); CIT v Anjum Ghaswala 252 ITR 1 (SC); Krishna Oberoi v UOI 257 ITR
105.
91. CIT v Maharashtra Apex Corpn 234 ITR 484; Krishna Oberoi v UOI 257 ITR 105; CIT v Datta 180 ITR 86; Bhargavy v Janaki 217 ITR 129 (FB); CWT v
Muthu Zulaikha 245 ITR 800; CIT v Anantha Gas Supplies 335 ITR 334 (FB).
92. CIT v DPS(I) 222 ITR 371.
93. Secretary, CBDT v B.K. Sinha 309 ITR 1, (2009) 221 CTR (Ker) 284 .
94. Tube Investments of India Ltd. v ACIT 325 ITR 610, (2009) 226 CTR (Mad) 313.
1. UOI v Tata Chemicals Ltd. 363 ITR 658, 671 (SC); Preeti N Aggarwala v CCIT 394 ITR 557.
2. CIT v Jhabarmal 195 ITR 351; Bhargavy v Janaki 217 ITR 129 (FB); CIT v Noorjahan 237 ITR 570 (SC); DCIT v Shaw Wallace 248 ITR 81; CIT v Ashok
Kumar Dixit 273 ITR 126, (2005) 195 CTR (All) 375.
3. Muddeereswara Mining v CIT 204 ITR 550.
4. Standard Chartered Bank v Directorate of Enforcement 275 ITR 81, 86, AIR 2005 SC 2622 [LNIND 2005 SC 476] , (2005) 4 SCC 530 [LNIND 2005 SC 476]
.
5. Vodafone India Services P. Ltd v UOI 368 ITR 1. Also see Govind Saran Ganga Saran v CST1985 Supp SCC 205 .
6. Padmasundra Rao v State of TN 255 ITR 147 (SC); CGT v Laxmidevi 220 ITR 50; CIT v Deep Chand 257 ITR 756; Pandian Chemicals Ltd. v CIT 262 ITR
278, (2003) 5 SCC 590 .
7. CIT v HCL Technologies Ltd. 404 ITR 719, 729 (SC).
8. Kishore Setalvad v CWT 256 ITR 637.
9. Vikrant Tyres v First ITO 247 ITR 821 (SC); Lukkose John v CIT 242 ITR 1; Ganji v CIT 220 ITR 654; Andhra Prabha v CIT 238 ITR 525; CIT v Champarun
225 ITR 863; ITO v Abdul Razack 181 ITR 414; CIT v Tandon and Mahendra 363 ITR 454.
10. Sarala Birla v CWT 176 ITR 98 (SC).
11. CIT v Hardware Exchange 190 ITR 61; CIT v Sky Room 195 ITR 763; Norasia Lines (Malta) Ltd. v Deputy CIT 279 ITR 268, (2005) 199 CTR (Ker) 377 .
12. CIT v National Agricultural 236 ITR 766; Shankaranarayana v State of Karnataka 239 ITR 902.
13. Dalmia Biscuits v CIT 194 ITR 749.
14. Mohammad v CWT 224 ITR 672 (SC); Sati Oil v CIT 232 ITR 502; CIT v Swadeshi Mills 232 ITR 618; CBDT v Cochin Goods 236 ITR 993; CIT v Datta 180
ITR 86.
15. Azad Tobacco v CIT 225 ITR 1002; CBDT v Cochin Goods 236 ITR 993.
16. CIT v Harijan Nigam 226 ITR 696; CIT v Champarun 225 ITR 863; CWT v Muthu Zulaikha 245 ITR 800; CST v Intl Airport Authority 254 ITR 159;
Upadhya v Director of IT 255 ITR 502; CIT v Bansal Credits 259 ITR 69; CIT v Tara Agencies 292 ITR 444, (2007) 6 SCC 429 [LNIND 2007 SC 834] ; CIT v
Nestle India Ltd. 275 ITR 1, (2005) 117 DLT 680 ; Vodafone India Services P. Ltd v UOI 368 ITR 1.
17. CIT v Sterling Foods 213 ITR 851; Guruviah Naidu v CIT 216 ITR 156.
18. Orissa SWC v CIT 237 ITR 589 (SC); CIT v Orissa SWC 201 ITR 729; CIT v Cement Distributors 208 ITR 355; CIT v Bansal Credits 259 ITR 69; CIT v
Himatasingike Seide Ltd. 286 ITR 255, (2006) 206 CTR (Kar) 106 [LNIND 2006 KANT 537] .
19. CIT v TVS Lean Logistics Ltd. 293 ITR 432, (2007) 212 CTR (Mad) 523.
20. CIT v Aar Pee Apartments P. Ltd. 319 ITR 276, (2009) 227 CTR (Del) 495.
21. CIT v Alembic Glass Industries 279 ITR 331, (2005) 197 CTR (Guj) 514.
22. Cairn UK Holdings Ltd. v DIT 359 ITR 268, 286; CIT v Naroda Enviro Projects Ltd. 419 ITR 482.
23. CIT v Kasturi 237 ITR 24 (SC); Fed of APCCI v State of AP 247 ITR 36 (SC); CIT v Trivedi 183 ITR 420; Greatway v CIT 199 ITR 391; BM Parmar v CIT 235
ITR 679; Modipon v CIT 247 ITR 40; CIT v Rajan 252 ITR 126; CWT v Tulsi Dass 256 ITR 73; Vivek Jain v ACIT 337 ITR 74; Rajasthan Rajya Sahakari v DCIT
363 ITR 564 (SC).
24. Rajasthan SEB v DCIT 200 ITR 434.
25. CIT v Vatika Township P. Ltd. 367 ITR 466, 494 (SC); CIT v Reham Foundation 418 ITR 205 (FB).
26. Manickchand v CIT 190 ITR 336; CIT v Kolte 235 ITR 239; see also 'Interpretation of the Income-tax Act'.
27. Karamchari Union v UOI 243 ITR 143 (SC); CED v Sileshkumar 181 ITR 10; Sanatkumar v CIT 211 ITR 755.
28. CIT v Reham Foundation 418 ITR 205 (FB).
29. Keshavji Ravji v CIT 183 ITR 1 (SC); see also under 'Other Important Principles…'.
30. CIT v Punjab Financial Corpn 254 ITR 6; see also 'Machinery Provisions'.
31. New Shorrock Spinning and Manufacturing Co. Ltd. v Raval 37 ITR 41 (Bom).
32. Manian Transport v Krishna Moorthy 191 ITR 1.
33. Gopal Engg v Thangaraj 211 ITR 303.
34. CIT v Hindustan Bulk 259 ITR 449, 464, AIR 2003 SC 3942 [LNIND 2000 SC 2258] , (2003) 3 SCC 57 [LNIND 2000 SC 2258] .
35. K Govindan v CIT 247 ITR 192, AIR 2001 SC 254 [LNIND 2000 SC 1723] , (2001) 1 SCC 460 [LNIND 2000 SC 1723] ; CWS Ltd v CIT 208 ITR 649, 1994
Supp (2) SCC 296 ; CIT v Chandulal 209 ITR 7; Sakthi v ITO 197 ITR 553; Gopal Reddy v CIT 181 ITR 378; CIT v Suresh Nanda 375 ITR 172.
36. Syed Sadique v CIT 239 ITR 263, (1998) 9 SCC 393 ; Ansal Properties v Appropriate Authority 236 ITR 793; CBDT v Oberoi Hotels 231 ITR 148 (SC);
Assam Company v State 248 ITR 567, AIR 2001 SC 1485 [LNIND 2001 SC 3047] , (2001) 4 SCC 202 [LNIND 2001 SC 744] ; Bhoruka Finance v UOI 202 ITR
723; Reliance v UOI 258 ITR 143; Discount and Finance House v SK Bharadwaj, CIT 259 ITR 295; CIT v United Western 259 ITR 312.
37. CIT v Chandulal 209 ITR 7; DCIT v Shaw Wallace 248 ITR 81; see also post under 'Mischief Rule'.
38. CIT v Regional Soyabean 239 ITR 217.
39. Gopal Engg v Thangaraj 211 ITR 303.
40. CIT v Hindustan Bulk 259 ITR 449, 464–65, AIR 2003 SC 3942 [LNIND 2000 SC 2258] , (2003) 3 SCC 57 [LNIND 2000 SC 2258] ; DIT v Bom Bullion 254
ITR 708; CIT v Satyanarayan 238 ITR 855; Guruviah Naidu v CIT 216 ITR 156; Caltex Oil v CIT 202 ITR 375; CIT v Sham L Chellaram 373 ITR 292.
41. CIT v Gwalior Rayon 196 ITR 149 (SC); CIT v Laxmi Metal 236 ITR 130; CIT v Hindustan Wire 254 ITR 299; CIT v Chloride India 256 ITR 625.
42. CIT v Dorr-Oliver 209 ITR 691.
43. Parshottam Nagindas v Adwalpalkar 218 ITR 392; Chirec Education Society v ADIT 354 ITR 605.
44. Luke v IR 54 ITR 692, 709(HL); CIT v National Taj 121 ITR 535, 542 (SC); Varghese v ITO 131 ITR 597, 606 (SC); CIT v Gotla 156 ITR 323, 339 (SC);
Keshavji Ravji v CIT 183 ITR 1 (SC); Goodyear v State of Haryana 188 ITR 402, 440 (SC); Bajaj Tempo v CIT 196 ITR 188, 194, 197 (SC); CWS Ltd v CIT 208
ITR 649 (SC); Padmasundra v State of TN 255 ITR 147 (SC); CIT v Hindustan Bulk 259 ITR 449, 464–65 (SC); Ajit v Malvandkar 95 ITR 546, 559; CIT v Rao
103 ITR 44, 51; Yogendra v CWT 187 ITR 58, 69–70; Jamshedpur Motor v UOI 189 ITR 70(SLP rejected 191 ITR 8); CIT v The Statesman 198 ITR 582, 588
(irrational construction should be avoided); CIT v Bharati 244 ITR 352; Oxford v CIT 247 ITR 658; CIT v Agarwal Flooring 253 ITR 595; Tata Consultancy v
UOI 257 ITR 710; CIT v Bhattacharjee 118 ITR 461, 479–80 (SC); Alipurduar v Ag ITO 112 ITR 878, 883; Lally Jacob v ITO 197 ITR 439; Ranganayakamma v
Bhashyam 198 ITR 157; CWT v Fagun Co.P.Ltd. 286 ITR 297 (FB).
45. CIT v Tara Agencies 292 ITR 444, (2007) 6 SCC 429 [LNIND 2007 SC 834] ; UOI v Tata Chemicals Ltd. 363 ITR 658 (SC).
46. Vodafone India Services P. Ltd. v UOI 368 ITR 1, 35.
47. Sarala Birla v CWT 176 ITR 98 (SC); Githa Hariharan v RBI 236 ITR 380 (SC); Assam Company v State 248 ITR 567 (SC); CIT v Kelvinator 256 ITR 1
(FB); CWT v Mayanna 191 ITR 535, 544; Tuhi Ram v LAC 199 ITR 490; Chartered Housing v Appropriate Authority 250 ITR 1; Tube Investments Ltd. v
ACIT 325 ITR 610, (2009) 226 CTR (Mad) 313.
48. Bhoruka Finance v UOI 202 ITR 723.
49. CIT v Deepak 208 ITR 304.
50. CWT v Rajlaxmi 203 ITR 919.
51. Padmasundra Rao v State of TN 255 ITR 147 (SC).
52. CIT v Gwalior Rayon 196 ITR 149 (SC); Najmun v Jamila 187 ITR 548; Inaroo v CIT 204 ITR 312; CIT v Shrishakti 207 ITR 442.
53. CGT v Getti 82 ITR 599, 605 (SC); Ker SCMF v CIT 231 ITR 814 (SC); Vania Silk v CIT 191 ITR 647, 653 (SC) (by using the rule of noscitur a sociis);
Ramsay v IR 54 TC 101, 184 (HL); CIT v Casino 91 ITR 289; CIT v Natu 105 ITR 43, 49; Gopal v ITO 123 ITR 727, 732; CIT v Ram Nath 189 ITR 169, 173–74;
CIT v Dorr-Oliver 209 ITR 691.
54. CIT v Mahant Oil 193 ITR 620; CIT v Maharashtra State Electricity Distribution Co. Ltd. 375 ITR 23; Redington (India) Ltd. v ACIT 392 ITR 633.
55. Shashikant v UOI 185 ITR 104 (SC); State of Bihar v CIT 202 ITR 535; Gian Chand v UOI 187 ITR 188, 199.
56. Heydon's Case (1584) 3 Co Rep 7a, 7b. Followed in Bengal Immunity Co. v State of BiharAIR 1955 SC 661 [LNIND 1955 SC 122] ; See also Varghese K.
P v ITO 131 ITR 597, AIR 2003 SC 3942 [LNIND 2000 SC 2258] , (2003) 3 SCC 57 [LNIND 2000 SC 2258] ; CIT v Sodra Devi 32 ITR 615; CIT v Swarna Bar
Restaurant 334 ITR 387.
57. CIT v R. K. B. K. Ltd. 331 ITR 269.
58. Great Eastern Exports v CIT 332 ITR 14.
59. Narasimha Rao (P.V.) v StateAIR 1998 SC 2120 [LNIND 1998 SC 1259] , 2158, (1998) 4 SCC 626 [LNIND 1998 SC 1259] – followed in CWT v Fagun Co.
P. Ltd. 286 ITR 297, (2007) 1 CTC 13 [LNIND 2006 MAD 2078] , (2006) 4 MLJ 836 [LNIND 2006 MAD 2078] (FB).
60. CIT v Podar Cement 226 ITR 625 (SC).
61. Per Bhagwati J, Gupta v President of IndiaAIR 1982 SC 149 , 232; CIT v Podar Cement 226 ITR 625 (SC); CIT v Minal 167 ITR 507, 530–31.
62. CWT v Zainab Noorul Sayeeda 262 ITR 306, (2003) 4 ALD 758 , (2003) 2 ALT 610 .
63. Per Lord Blackburn, Coltness v Black ITC 287, 316 (HL); CIT v Elphinstone 40 ITR 142 (SC); CIT v Vadilal 86 ITR 2, 8 (SC); Vikrant Tyres v First ITO 247
ITR 821 (SC); Tennant v Smith 3 TC 158, 163 (HL); Smidth v Greenwood 8 TC 193, 206 (HL); Canadian Eagle v King 27 TC 205, 248 (HL); IR v Gordon 33
TC 226, 242 (HL); CIT v Datta 180 ITR 86; State of Punjab v Jaswant 186 ITR 655; CBDT v Chowgule 192 ITR 40.
64. Per Lord Cairns, Partington v Att-Gen [1869] LR 4 HL 100, 122; CIT v Provident Inv 32 ITR 190 (SC); CIT v Motors & General Stores 66 ITR 692, 699–700
(SC); Drummond v Collins 66 ITC 525, 539 (HL); Duke of Westminster v IR 19 TC 490, 524 (HL).
65. Partington v Att-Gen [1869] LR 4 HL 100, 122; IR v Granite 13 TC 1, 16; Karamchari Union v UOI 243 ITR 143 (SC); CIT v Sahana 14 ITR 106, 109; Raju
v CIT 17 ITR 51, 61; CIT v Rama 21 ITR 191, 230; CIT v Electro 193 ITR 103; CIT v Orissa SWC 201 ITR 729. But see Gopal Reddy v CIT 181 ITR 378;
Hyderabad Inds v CIT 207 ITR 865.
66. K. Nagesh v ACIT 376 ITR 473.
67. CIT v Radhe Developers 341 ITR 403; CIT v Shital Corporation 369 ITR 476.
68. Per Rowlatt J, Cape Brandy v IR [1921] 1 KB 64 , 71, 12 TC 358, 366, approved in CIT v Ajax 55 ITR 741, 747 (SC), CIT v Shahzada Nand 60 ITR 392,
400 (SC), Tarulata v CIT 108 ITR 345, 357 (SC), Canadian Eagle v King 27 TC 205, 248 (HL), and Mapp v Oram 45 TC 651, 682 (HL), 75 ITR 411, 424;
Controller v Sileshkumar 181 ITR 10; VP Theatre v State of Punjab 185 ITR 429; CIT v Electro 193 ITR 103; CIT v Jhabarmal 195 ITR 351; CIT v Orissa SWC
201 ITR 729; CIT v Vishwanath 201 ITR 920; Dakshinamoorthy v TRO 202 ITR 946; CIT v Sri Abhayananda Trust 255 ITR 436; CIT v Bansal Credits 259 ITR
69. But see Arunachalam v CIT 151 ITR 172, 179–80 (FB).
69. State of Punjab v Jaswant 186 ITR 655.
70. CBDT v Chowgule 192 ITR 40.
71. Goodyear v State of Haryana 188 ITR 402 (SC).
72. Per Hegde J, Jodha Mal v CIT 82 ITR 570, 575 (SC); CWT v Kripashankar 81 ITR 763, 768 (SC); CIT v Gwalior Rayon 196 ITR 149, 156 (SC); Maneckji v
CIT 17 ITR 561, 567; CGT v Kamdin 95 ITR 476, 480; Malhotra v UOI 88 ITR 110, 113, affirmed CBDT v Malhotra 128 ITR 543; Gnanambal v CIT 136 ITR 103,
107; Madgul Udyog v CIT 184 ITR 484; CIT v Shrishakti 207 ITR 442; CIT v Bakhear Ahmed 221 ITR 574; Gopal Reddy v CIT 181 ITR 378; Travancore Sugars
v CIT 185 ITR 558; Hyderabad Inds v CIT 207 ITR 865.
73. CIT v Gwalior Rayon 196 ITR 149 (SC); Harshad Mehta v Custodian 231 ITR 871 (SC); CIT v Shrishakti 207 ITR 442. Contrast DCIT v Central Concrete
236 ITR 595; Sanjeev Lal v CIT 365 ITR 389 (SC).
74. CIT v Rajinder Kumar 362 ITR 241.
75. Per Bhagwati J, CIT v Surat Art Silk 121 ITR 1, 17 (SC); Lally Jacob v ITO 197 ITR 439, 453.
76. Chamber of ITC v CBDT 209 ITR 660; DIT v Ravva Oil (Singapore) P. Ltd. (2008) 300 ITR 53 , (2008) 217 CTR (Del) 577.
77. CWT v Sun Jute 203 ITR 350.
78. CIT v Saran 14 ITR 152, 166, 170; Ram Rakhamal v CIT 5 ITR 137, 151–52.
79. CIT v Saran 14 ITR 152; Ram Rakhamal v CIT 5 ITR 137; Kikabhoy v CIT 17 ITR 523, 531; CIT v Gopal 103 ITR 563, 570, 574; CIT v Tarun 113 ITR 745,
750; CIT v Dalappa 176 ITR 455, 460–61.
80. Forbes v CIT 206 ITR 495.
81. Bhagya Wanti v CIT 210 ITR 687.
82. Vasudeva v CAgIT 198 ITR 426; CIT v DPS Pvt Ltd 222 ITR 371; CIT v BT System and Service Ltd 358 ITR 30.
83. Kirloskar v CST 210 ITR 485; Mihir Textiles v CIT 225 ITR 327.
84. Goculdas v Shah 211 ITR 706.
85. Belani v CIT 195 ITR 639.
86. CIT v Ganesan (GS) 215 ITR 334.
87. Attar Singh v ITO 191 ITR 667 (SC).
88. CIT v Hindustan Bulk 259 ITR 449, 465 (SC); Shaw Wallace v ACIT 238 ITR 13; Mohnot v DCIT 215 ITR 275; CIT v Anita Ghosh 202 ITR 991; CIT v
BRConsts 202 ITR 222; CIT v Deoria 196 ITR 110; CIT v Associated Finance 195 ITR 742; Belani v CIT 195 ITR 639; Shantaben Patel v CIT 249 ITR 682;
Sattur's Sushrushalya v State of Karnataka 198 ITR 480, 485–86.
89. CIT v Kelvinator 256 ITR 1 (FB); CIT v Akshar Enterprises 396 ITR 317.
90. CIT v Hindustan Bulk 259 ITR 449, 465 (SC); Kerala SIDC v CIT 246 ITR 330.
91. CIT v Parekh Brothers 253 ITR 43.
92. Per Lord Herschell, Colquhoun v Brooks 2 TC 490, 500 (HL); CIT v Narsee 40 ITR 307 (SC); CIT v National Taj 121 ITR 535, 541–42 (SC); CIT v Srinivasa
128 ITR 294, 299 (SC); Varghese v ITO 131 ITR 597, 604 (SC); CIT v Gopal 103 ITR 563, 571, 573–74; CIT v Visweswar 3 ITR 216, 221; Ramchandra v Coll of
Taxes 31 ITR 651; CIT v Santosh 93 ITR 563, 572; Yogendra v CWT 187 ITR 58, 68; CIT v Associated Finance 195 ITR 742, 749; CIT v Rai Bahadur 195 ITR
825, 829.
93. CIT v Hindustan Bulk 259 ITR 449, 465 (SC); BL Passi v CIT 404 ITR 19 (SC); CIT v Dalappa 176 ITR 455.
94. Atkinson v Goodlass 31 TC 447, 462 (HL); CIT v Shahzada Nand 60 ITR 392, 400 (SC); CIT v Kulu Valley Transport 77 ITR 518, 530 (SC); CIT v
Vegetable Products 88 ITR 192 (SC); CIT v Naga Hills Tea 89 ITR 236, 240 (SC); CED v Kanakasabai 89 ITR 251, 257 (SC); CIT v Madho 105 ITR 179, 184
(SC); CIT v Podar Cement 226 ITR 625 (SC); CIT v Shaan 231 ITR 308 (SC); Mysore Minerals v CIT 239 ITR 775 (SC); ACIT v Thanthi Trust 247 ITR 785 (SC);
UOI v Onkar Kanwar 258 ITR 761 (SC); CIT v Bharat Nidhi 141 ITR 740, 744 (particularly penal provision); CIT v Muthiah 109 ITR 463, 465; CIT v Estate &
Finance 111 ITR 119, 131; CIT v Simpson 122 ITR 283, 286 (SLP rejected 141 ITR 50); Charitable Gadodia Stores v CIT 12 ITR 385, 391; Gappunal v CIT 13
ITR 210, 221, affirmed CIT v Gappumal 18 ITR 584 (SC); Maharaja of Kapurthala v CIT 13 ITR 74, 93; Pragdas v ITO 18 ITR 757, 761; Ambika v CIT 22 ITR
58, 64; CIT v Sastri 35 ITR 476, 481; Girdharlal v CIT 53 ITR 23, 37; CIT v Radha 185 ITR 544; Yogendra v CWT 187 ITR 58; Shankar v CIT 189 ITR 463; CWT v
Janki 192 ITR 229; CED v Gandhi 194 ITR 688; CIT v Sky Room 195 ITR 763, 765; CIT v Indian Tube 197 ITR 522; CIT v Shivarudrappa 200 ITR 1; CIT v
Orissa SWC 201 ITR 729; Mohammed v CBDT 203 ITR 479; CIT v Dharma 204 ITR 787; CIT v Thana Elec 206 ITR 727; CIT v Vijaya 229 ITR 772; Baidya
Nath v K L Anand 230 ITR 522; Laxmi Inds v ITO 231 ITR 514; CIT v Maharashtra Apex 234 ITR 484; CIT v Venkataraman 245 ITR 73; Ghisalal v CIT 248
ITR 506; CIT v Balakrishna 255 ITR 339; CIT v Qantas 256 ITR 84.
95. DIT v OHM Ltd. 352 ITR 406, 417.
96. CIT v Valli Cotton Traders P. Ltd . 288 ITR 400, (2007) 208 CTR (Mad) 242—following Raghbir v State of Haryana (1981) 4 SCC 210 [LNIND 1981 SC
380] , AIR 1981 SC 2037 [LNIND 1981 SC 380] .
97. ICAI v Price Waterhouse (1997) 6 SCC 312 [LNIND 1997 SC 934] . For a classic exposition of the rule of harmonious construction see, Sri
Venkataramana Thevaru v State of Mysore AIR 1958 SC 255 [LNIND 1957 SC 119] .
1. CP Bank v CIT 14 ITR 479, 481; Hughes v Bank of New Zealand 6 ITR 541, 565 (CA), on appeal 6 ITR 636 (HL), 21 TC 472; CIT v A.J. Abraham
Anthraper 268 ITR 417, (2004) 189 CTR (Ker) 299 .
2. CIT v Shivarudrappa 200 ITR 1, 6; CIT v Venugopal 273 ITR 307, (2005) 193 CTR (Mad) 661.
3. Kishorbhai Harjibhai Patel v ITO 417 ITR 547.
4. CIT v Mirza 202 ITR 291; Daryani v CIT 202 ITR 731; CIT v Thana Elec 206 ITR 727; Sam Fashion v CIT 209 ITR 214; CIT v New Shorrock 212 ITR 355; CIT
v Lokmat 216 ITR 199; Oudh Sugar v CIT 222 ITR 726.
5. CIT v Vegetable Products 88 ITR 192 (SC); Chandra Mohan Sinku v UOI 372 ITR 627; Dalmia Power Ltd. v ACIT 418 ITR 221. Contra Bimal Kishore
Paliwal v CWT 398 ITR 553 (SC) – It was held that this principle will not apply to valuation by two different methods.
6. CIT v Bosotto 8 ITR 41, 48 (FB); Thakkar v CIT 27 ITR 658; Kothari v CIT 20 ITR 579.
7. CIT v J. Palemar Krishna 342 ITR 366.
8. See, for example, under ss 80HHA, 80HHB, 80HHD, 80J and 80JJ.
9. Vishnoo v First ITO 207 ITR 1040.
10. Timken France SAS, In re 294 ITR 513 (AAR).
11. Ramakrishnan v ITAT 193 ITR 147; Union Home v UOI 215 ITR 758; UOI v Vipan Kumar 260 ITR 1, (2005) 9 SCC 579 .
12. TLG India P. Ltd. v DCIT 421 ITR 418.
13. Laxmandas v UOI 234 ITR 261.
14. Sona Builders v UOI 251 ITR 197 (SC), followed in B.F. Ditia v Appropriate Authority 307 ITR 158; Virendra v Appropriate Authority 327 ITR 185; CIT v
Pentafour Software E.W. Foundation 418 ITR 427; Jayanthi Natarajan v ACIT 401 ITR 215.
15. ACIT v Vijay Television Pvt. Ltd. 407 ITR 642 – affirming 369 ITR 113.
16. Jayanthi Natarajan v ACIT 401 ITR 215.
17. Home Finders Housing Ltd. v ITO 404 ITR 611 (both Single Judge and Division Bench orders are found at this citation).
18. Padmasundra Rao v State of TN 255 ITR 147 (SC); UOI v Dharamendra Textile Processors 306 ITR 277, (2008) 13 SCC 369 [LNIND 2008 SC 1947] ;
Shatrushailya v CIT 259 ITR 149.
19. CIT v National Taj 121 ITR 535, 541, 545 (SC); Shatrushailya v CIT 259 ITR 149; Prakash Nath Khanna v CIT 266 ITR 1, AIR 2004 SC 4552 [LNIND 2004
SC 222] , (2004) 9 SCC 686 [LNIND 2004 SC 222] ; UOI v Dharmendra Textile Processors 306 ITR 277, (2008) 13 SCC 369 [LNIND 2008 SC 1947] ; Babita Lila
v UOI 387 ITR 305, 332-333 (SC).
20. CIT v Bakhear 221 ITR 574; Ashok Kumar Sethi v DCIT 387 ITR 375.
21. Parshottam Nagindas v Adwalparkar 218 ITR 392.
22. Varghese v ITO 131 ITR 597 (SC). See also post under 'Circulars, forms and interpretation…'.
23. State of MP v GS Mills 187 ITR 478 (SC).
24. SRF Finance v CBDT 211 ITR 861; Sadanand v State of Maharashtra 247 ITR 609.
25. Srinivasa v State of Karnataka 193 ITR 548.
26. CIT v Hardeodas Trust 198 ITR 511; CIT v Punjab Financial Corpn 254 ITR 6; CIT v Antony 191 ITR 346; CIT v Shivanand Electronics 209 ITR 63.
27. CIT v Shivanand Electronics 209 ITR 63.
28. Hemalatha v CIT 259 ITR 1 (SC); Uttam Modern Rice and Oil Mill v UOI 357 ITR 692.
29. Vijay Omprakash v CIT 257 ITR 649.
30. CIT v Noorjahan 237 ITR 570 (SC).
31. Hemalatha Gargya v CIT 259 ITR 1 (SC), (2003) 9 SCC 510 [LNIND 2002 SC 748] .
32. CIT v Punjab Financial Corpn 254 ITR 6.

33. CIT v Antony 191 ITR 346; CWT v Jindal(S) 194 ITR 539; CIT v Rai Bahadur Trust 195 ITR 825; CIT v Punjab Financial Corpn 254 ITR 6; CIT v Krishnan
Nair 259 ITR 727.
34. CIT v National Taj 121 ITR 535, 545 (SC); Kikabhoy v CIT 17 ITR 523, 532; Re General Comm Corpn 26 ITR 316; CIT v Rao 103 ITR 44, 55; CIT v
Badriprasad 142 ITR 353; CIT v Joy 151 ITR 19, 22–23; Goculdas v CIT 151 ITR 67, 72; CWT v Prakashi Talkies 202 ITR 121; Church's Auxiliary for Social
Action v DGIT 325 ITR 362, (2010) 235 CTR (Del) 350.
35. VM Salgaocar v CIT 243 ITR 383 (SC); Ananda Marga v CIT 218 ITR 254.
36. Verghese v DCIT 210 ITR 511.
37. CIT v Podar Cement 226 ITR 625 (SC); CIT v Jodhan 259 ITR 79; Allied Motors v CIT 224 ITR 677 (SC); CIT v India Steamship 196 ITR 917.
38. Mithy Granite P. Ltd. v ITO 266 ITR 151 (FB) – affirmed on another point in Gem Granites P. Ltd. v CIT 271 ITR 322, AIR 2005 SC 1455 [LNIND 2004 SC
1175] , (2005) 1 SCC 289 [LNIND 2004 SC 1175] .
39. Municipal Committee v Manilal Manekji P. Ltd . AIR 1967 SC 1201 [LNIND 1966 SC 292] , (1967) 69 Bom LR 316 ; Pappu Sweets & Biscuits v
Commissioner of Trade Tax 111 STR 425 (SC).
40. CIT v Venkateswara Hatcheries 237 ITR 174 (SC).
41. Mahadeo Prasad v ITO 192 ITR 402 (SC).
42. General Finance Co v ACIT 257 ITR 338 (SC); Narendrakumar v UOI 259 ITR 593.
43. Verghese v DCIT 210 ITR 511.
44. CWT v Ellis Bridge 229 ITR 1 (SC).
45. Poonjabhai Vanmalidas v CIT 186 ITR 572 (SC); Fibre Boards P. Ltd. v CIT 376 ITR 596 (SC).
46. CWT v Ellis Bridge 229 ITR 1 (SC); ACIT v Bharat V Patel 404 ITR 37 (SC); CIT v Punjab Financial Corpn 254 ITR 6.
47. IR v Countess of Longford 13 TC 573, 620 (HL); Kerala SIDC v CIT 246 ITR 330.
48. CIT v Srinivasa 128 ITR 294, 299 (SC); CIT v Off Liq 150 ITR 539, 544 (SC); CIT v Anglo India Jute 129 ITR 352, 361, 368; Rupenjuli v CIT 186 ITR 301,
308–09; Hamilton v CIT 194 ITR 391, 399; Nirmal v CIT 193 ITR 694, 712; CIT v BR Consts 202 ITR 222, 229 (FB) (machinery provisions).
49. CWT v Karan Singh 200 ITR 614 (SC); CIT v BR Consts 202 ITR 222.
50. CIT v BR Consts 202 ITR 222; see also under 'Double Taxation…'.
51. CIT v Manilal 44 ITR 876, 881 (SC); CIT v Keshavlal 55 ITR 637, 640 (SC); CIT v Chugandas 55 ITR 17, 28 (SC); Philip v CIT 49 ITR 97, 101 (SC); CIT v
Prembhai 77 ITR 27, 30 (SC); CIT v Sarathy 83 ITR 170, 173 (SC); Dahi v ITO 103 ITR 517, 524 (FB); Bhogilal v CIT 25 ITR 523; Desai v Ramamurthy 34 ITR
409; CIT v Sivasubramaniam 189 ITR 157 (s 64); Thangalakshmi v ITO 205 ITR 176.
52. CIT v Mahaliram 8 ITR 442, 448 (PC); India United Mills v CEPT 27 ITR 20, 25 (SC); Gursahai v CIT 48 ITR 1 (SC); Banarsidebi v ITO 53 ITR 100 (SC);
CIT v National Taj 121 ITR 535, 545 (SC); CIT v MSP Exports 196 ITR 762, 766; United Provinces v CIT 204 ITR 794; Tity v TRO 207 ITR 1072; CIT v Shree
Digvijay 212 ITR 310; Peerless v AO 248 ITR 113; Drummond v Collins 6 TC 525, 540 (HL); Whitney v IR 10 TC 88, 110 (HL); IR v Longmans 7 TC 272, 282;
Aspinwall v CIT 220 ITR 617.
53. United Provinces v CIT 204 ITR 794; Tity v TRO 207 ITR 1072.
54. CIT v MSP Exports 196 ITR 762.
55. Kodiyal Foods v CIT 193 ITR 411.
56. Kerala SIDC v CIT 246 ITR 330.
57. Jorawar v CIT 198 ITR 47.
58. CIT v Mohan Lal 211 ITR 703.
59. CIT v Eli Lily 312 ITR 225 (SC), (2009) 15 SCC 1 [LNIND 2009 SC 2169] .
60. CIT v Commonwealth 221 ITR 474; Assam Co v CIT 256 ITR 423.
61. Kella v CIT 106 ITR 487, 493–94; CIT v Hardeodas Trust 198 ITR 511, 518–19.
62. CIT v Ajanta Elec 215 ITR 114 (SC).
63. Savitri v CIT 186 ITR 701.
64. Sharma v ITO 254 ITR 772 (SC).
65. CIT v Commonwealth 221 ITR 474.
66. Madhu Jayanti v CIT 193 ITR 159.
67. Bhagwati v CIT 109 ITR 353, 359–60; Ganesh Properties v CIT 202 ITR 434; Thangalakshmi v ITO 205 ITR 176; Laxmi Inds v ITO 231 ITR 514; CIT v
Southern Ancillaries 235 ITR 64; Govind v DCIT 246 ITR 787; CIT v Hindustan Export 139 ITR 691, 699 (s 79). Cf Handa v ITO 198 ITR 54, 68 (provision
relieving against penalty should be liberally construed).
68. Govind v DCIT 246 ITR 787.
69. Kaushal v UOI 256 ITR 679.
70. Thangalakshmi v ITO 205 ITR 176.
71. CIT v Gemini 188 ITR 101.
72. State of Bombay v Pandurang Vinayak Chaphalkar AIR 1953 SC 244 [LNIND 1953 SC 33] , (1953) 55 Bom LR 526 .
73. Mafatlal Gagalbhai & Co. P Ltd. v CIT 122 ITR 382, (1979) 13 CTR Bom 236; Amrutanjan Ltd v CIT 41 ITR 21 - affirmed in 53 ITR 218, AIR 1964 SC
1804 [LNIND 1964 SC 159] , (1964) 8 SCR 9 [LNIND 1964 SC 159] – following St. Aubyn v Attorney-General [1952] AC 15 , 53, per Lord Radcliffe.
74. Ditia B F v Appropriate Authority 307 ITR 158; Sheik Ghulam Maula v State of UP, AIR 1964 All 353 [LNIND 1964 ALL 17] ; CIT v Muzafar Nagar
Development Authority 372 ITR 209.
75. CIT v Surat Cotton 202 ITR 932; Caltex Oil Refining India Ltd. v CIT 202 ITR 375.
76. CIT v Khimji Menshi 194 ITR 192; CIT v Kaimal 123 ITR 755; Malik v CIT 124 ITR 522; CIT v Bhupender Singh Atwal 140 ITR 928.
77. CIT v Vina 58 ITR 100, 105–06.
78. State of Bom v Pandurang 1953 SCR 773 [LNIND 1953 SC 33] ; ITO v Alfred 44 ITR 442 (SC); CIT v Pratap 41 ITR 421 (SC); Venkatachalam v Bom
Dyeing 34 ITR 143, 146–47 (SC); CIT v Teja Singh 35 ITR 408, 413 (SC); Narayan v Ishwarlal 57 ITR 149, 161–63 (SC); CIT v Godavari Sugar 63 ITR 310,
315–16 (SC); Gurupad v Hirabai 129 ITR 440, 446 (SC); CIT v Narasimhan 236 ITR 327 (SC); CWT v Rai 119 ITR 553, 561; Achamma v IAC 180 ITR 57, 63;
CIT v Hindustan Petroleum 187 ITR 1; CIT v Natwarlal 189 ITR 656, 657; Burdwan WCCS v CIT 191 ITR 570, 573; Caltex Oil v CIT 202 ITR 375; CIT v Surat
Cotton 202 ITR 932, 940; CIT v Kothari Plantations 203 ITR 547; Hyderabad Inds v CIT 207 ITR 865; CIT v Jaykrishna 231 ITR 108; Assam Bengal v CIT 239
ITR 862.
79. CIT v Amarchand 8 ITR 59 (SC); CIT v Ajax 55 ITR 741, 750–51 (SC); ITO v Ponnoose 75 ITR 174, 178 (SC); CIT v Vadilal 86 ITR 2, 8 (SC); CIT v Mother
India 155 ITR 711, 718 (SC); CIT v Vina 58 ITR 100; Motilal v CIT 45 ITR 557; Arvind v CIT 105 ITR 764, 780, 784–86; Amritlal v CIT 116 ITR 833, 837;
Radhadevi v CWT 129 ITR 229, 242–43; CIT v Maskara 130 ITR 955, 967; CWT v Mayurdhwaj 136 ITR 279, 286; CIT v Durgamma 166 ITR 776, 781;
Achamma v IAC 180 ITR 57; CIT v John 181 ITR 1; CIT v Hindustan Petroleum 187 ITR 1, 11; Kamal Textiles v ITO 189 ITR 339; Venkitaperumal v CAgIT
193 ITR 213, 218; CIT v Amarchand 194 ITR 56; CIT v Shrishakti 207 ITR 442; DDIT v Virage Logic International 389 ITR 142.
80. CIT v Nathitmal 89 ITR 190, 197–98 (FB); CIT v Hindustan Petroleum 187 ITR 1, 11.
81. Glittre v CIT 225 ITR 739 (SC); Caltex Oil v CIT 202 ITR 375; CIT v Shrishakti 207 ITR 442.
82. Principles of Statutory Interpretation, G.P. Singh, 12th edition 2010, pp. 377-389.
83. CIT v Sushma 223 ITR 395.
84. CIT v Ashoka Engg 194 ITR 645 (SC); CIT v Geeta Ram 121 ITR 708 (FB); CIT v Mahabir Parshad 125 ITR 165; Caltex Oil v CIT 202 ITR 375.
85. CIT v Ramlal 77 ITR 964.
86. Harihar v CIT 9 ITR 246; Bhagat v CIT 4 ITC 33, 37; Furtado v City of London Brewery 6 TC 382, 390.
87. CIT v Ashoka Engg 194 ITR 645 (SC); Gopilal v CIT 65 ITR 477, 481; CIT v Mahabir 125 ITR 165, 176; Durgaprasad v CIT 134 1TR 601, 605; CIT v
Angadi 157 ITR 426, 434; Patel v CIT 161 ITR 568, 574; Beharilal v CIT 164 ITR 274, 277; CIT v Chaturbhuj 156 ITR 257, 264; Sankari v CED 191 ITR 449, 452;
Empire v CIT 193 ITR 295, 299; Caltex Oil v CIT 202 ITR 375; CIT v TV Sundaram 236 ITR 524.
88. DCIT v Shantharam 260 ITR 156.
89. Calcutta Elec v ITO 197 ITR 563.
90. CWT v Jagdish 211 ITR 472.

91. CIT v South Arcot Society 176 ITR 117, 119 (SC); CIT v UP Co-op Fed 176 ITR 435, 441 (SC); Broach Society v CIT 177 ITR 418, 422 (SC); CIT v
Strawboard 177 ITR 431, 434 (SC); CIT v Gwalior Rayon 196 ITR 149 (SC); Bajaj Tempo v CIT 196 ITR 188, 193–94 (SC); CIT v Budharaja (NC) 204 ITR 412
(SC); New Shorrock v CIT 30 ITR 338 (ss 29 and 37); CIT v Sundara 18 ITR 259, 271; Kameshwar v CIT 26 ITR 121, 132, affirmed 32 ITR 587 (SC); CAgIT v
Jagadish 17 ITR 426, 438, overruled on another point Kameshwar v CIT 32 ITR 587 (SC); Upper India Chamber of Comm v CIT 15 ITR 263, 281; CIT v
Chugandas 38 ITR 241, 257, on appeal 55 ITR 17 (SC); CIT v Gaekwar Foam 35 ITR 662, 672; Bank of India v CIT 72 ITR 157, 161; CIT v Clive Ins 85 ITR 531,
577, affirmed 113 ITR 636 (SC); UP SWC v ITO 94 ITR 129, 135, affirmed in UOI v UP SWC 187 ITR 54 (SC); CIT v Simpson 122 ITR 283, 287 (SLP rejected
141 ITR (St) 50; CIT v Sanghi 134 ITR 623; Alikunju v CIT 166 ITR 804, 809; CIT v Pondicherry Co-op 188 ITR 671, 677; CWT v Dungarmal 191 ITR 445, 448;
CIT v Bhageeratha 193 ITR 674, 683, affirmed in 199 ITR 12 (SC); Handa v ITO 198 ITR 54, 68 (relief from penalty); CIT v Shaan 199 ITR 409; Gokuldas
Exports v CIT 200 ITR 401; Mohammed (PKP) v CBDT 203 ITR 479; CIT v Shrishakti Trading 207 ITR 442; CIT v Pulikkal 210 ITR 299; CIT v First Leasing 216
ITR 455; AGS Tiber v CIT 233 ITR 207; CIT v Laxmi Metal 236 ITR 130; CIT v Bharath Sea 237 ITR 46; CIT v Satyanarayan 238 ITR 630; CIT v Purshottam 247
ITR 516; CIT v Gujarat Aluminium Extrusions P. Ltd . 263 ITR 453. Contrast CGT v Fernandez(USM) 178 ITR 577, CIT v Eastern Chemicals 192 ITR 423, Kota
Co-op v CIT 207 ITR 608 and CIT v Vasawi 255 ITR 517, wherein it was held that an exemption clause must be strictly construed.
92. CIT v Mahindra 144 ITR 225, 239 (SC) (s 72A); Chandulal v CIT 63 ITR 627, 631 (SC) (s 80C); CIT v Canara Workshops 161 ITR 320, 323–24 (SC)
(deleted s 80E); CIT v South Arcot Society 176 ITR 117, 119 (SC) and CIT v UP Co-op Fed 176 ITR 435, 441 (SC) (s 80P); CBDT v Aditya 170 ITR 137, 141–42
(SC) (s 80RRA); CIT v Budharaja(NC) 204 ITR 412 (SC); CIT v Guj SWC 124 ITR 282, 290–91 [s 10(29)]; CIT v Deepak 168 ITR 773, 787 [s 32(2)]; CIT v
Harwell 166 ITR 624, 627–78 (s 80HH); CIT v Satellite Engg 113 ITR 208, 215, 222; CIT v Simpson 122 ITR 283, 286–87, CIT v Harinkhola 134 ITR 540, 544;
CIT v Shankar 138 ITR 286, 291 (s 80J); CIT v Birla 133 ITR 373, 378 (s 80–O); CIT v Mahant Oil 193 ITR 620, 622 (s 32A); Gokuldas v CIT 200 ITR 401, 403–
04 (s 35B); Hind Wire v CIT 195 ITR 450, 452 (s 80J); CIT v Guj Oil 201 ITR 325; CIT v Lucky Mineral 226 ITR 245; CIT v Bharath Sea 237 ITR 46; CIT v Trinity
225 ITR 178; Abdul Jabbar (JK) v CIT 237 ITR 389; CIT v Salem 237 ITR 662; CIT v Cellulose Products 192 ITR 155; Action for Welfare and Awakening in
Rural Environment (AWARE) v DCIT 263 ITR 13.
93. Crystal Towers v Commissioner of Commercial Taxes 110 STC 161.
94. Kerala SCMF v CIT 231 ITR 814 (SC).
1. Bajaj Tempo v CIT 196 ITR 188 (SC); CIT v First Leasing 216 ITR 455.
2. Prabhakar P. R v CIT 284 ITR 549 (SC).
3. DCIT v Ace Multi Axes Systems Ltd. 400 ITR 141, 161-166 (SC).
4. AGS Tiber v CIT 233 ITR 207; CIT v Lucky Mineral 226 ITR 245.
5. CIT v Shaan 231 ITR 308 (SC).
6. CWT v NCJ John 233 ITR 475; CIT v Salem 237 ITR 662.
7. Mysore Minerals v CIT 239 ITR 775 (SC); CIT v J&K Tourism 248 ITR 94.
8. CIT v Budharaja(NC) 204 ITR 412 (SC).
9. ONGC Ltd. v CIT 377 ITR 117, 128 (SC).
10. CIT v Purshottam 247 ITR 516.
11. CIT v Swadeshi Mills 232 ITR 618.
12. Girnar Industries v CIT 338 ITR 227.
13. CC v Dilip Kumar & Company 2018 (361) ELT 577 (SC), (2018) 9 SCC 1 [LNIND 2018 SC 344] , overruling Sun Export Corporation v CC 1997 (93) ELT
641 [LNIND 1997 SC 879] (SC), (1997) 6 SCC 564 [LNIND 1997 SC 879] . Also see CIT v Vegetable Products 88 ITR 192 (SC); Chandra Mohan Sinku v UOI
372 ITR 627; Dalmia Power Ltd. v ACIT 418 ITR 221.
14. Imperial Chit v ITO 219 ITR 498 (SC); Gian Chand v UOI 187 ITR 188; CIT v Vaidya 224 ITR 186.
15. Shashikant Kale v UOI 185 ITR 104 (SC); Gian Chand v UOI 187 ITR 188.
16. Shashikant Kale v UOI 185 ITR 104 (SC).
17. Imperial Chit v ITO 219 ITR 498 (SC); Indian Hotels v ITO 245 ITR 538 (SC); Bhagwati Prasad v CIT 248 ITR 562; Rajendra v CWT 194 ITR 218.
18. Mafatlal Gagalbhai & Co. P. Ltd. v CIT 122 ITR 382, (1979) 13 CTR (Bom) 236.
19. See under s 119.
20. ITO v Manoharlal Kothari 236 ITR 357; Grindlays Bank v CIT 201 ITR 148; CIT v Ankitech P. Ltd. 340 ITR 14.
21. Grasim v ACIT 245 ITR 677.
22. Yogendra v CWT 187 ITR 58, 68; Ekonkar Transport v CBDT 219 ITR 511; CIT v Deoria 196 ITR 110, 115; CIT v The Statesman 198 ITR 582, 590.
23. All Guj Fed v CBDT 214 ITR 276; CIT v Vaidya 224 ITR 186. Contrast Grindlays Bank v CIT 201 ITR 148; Comm Corpn v ITO 201 ITR 348. See also ante
'Doctrine of contemporanea expositio'.
24. Amal Kumar Ghosh v ACIT 361 ITR 458.
25. Catholic Syrian Bank Ltd. v CIT 343 ITR 270 (SC).
26. CIT v Trustees of Teckchand 184 ITR 537.
27. CIT v Tulsyan NEC Ltd. 330 ITR 226 (SC).
28. CIT v Srinivasan 23 ITR 87, 100 (SC); CIT v Kamakshya 16 ITR 325, 328–29 (PC); Sharma v CIT 45 ITR 107, 118; Beohar Singh v CIT 16 ITR 433, 443;
Charitable Gadodia Stores v CIT 12 ITR 385, 389; Re Iqbal 10 ITR 152, 165–66; Comm Corpn v ITO 201 ITR 348, 369. For examples of misleading
propositions in the Income-tax Manual, see Sooniram v CIT 7 ITR 470, 485–86.
29. State of MP v GS Mills 187 ITR 478 (SC).
30. CIT v Anjum Ghaswala 252 ITR 1 (SC); Ved Prakash v CIT 32 ITR 133; CIT v Autofin 151 ITR 741; Comm Corpn v ITO 201 ITR 348, 366–69 (circular of
Finance Ministry).
31. CIT v Achaldas 217 ITR 799.
32. Kerala SIDC v CIT 259 ITR 51 (SC); Soorajmull Nagarmull v CIT 190 ITR 418; CIT v Vaidya 224 ITR 186.
33. Loka Shikshana Trust v CIT 101 ITR 234 (SC); Indian Chamber of Commerce v CIT 101 ITR 796 (SC); CIT v Surat Art Silk Cloth Manufacturers
Association 121 ITR 1 (SC); Assam Frontier Tea v UOI 190 ITR 361; CWT v Fagun Co. P. Ltd . 286 ITR 297, (2007) 1 CTC 13 [LNIND 2006 MAD 2078] , (2006)
4 MLJ 836 [LNIND 2006 MAD 2078] (FB); UP Transformers India P. Ltd. v CIT 382 ITR 66.
34. CIT v Meghalaya Steels Ltd. 383 ITR 217 (SC).
35. Escorts v UOI 189 ITR 81; CIT v Ampro Food 215 ITR 904; Shankaranarayana v State of Karnataka 239 ITR 902.
36. Builders Assns v UOI 209 ITR 877 (SC).
37. Pepper v Hart 210 ITR 156 (HL) (Appellate Committee of seven Lords).
38. Shashikant Kale v UOI 185 ITR 104 (SC); CWT v Fagun Co. P. Ltd. 286 ITR 297, (2007) 1 CTC 13, (2006) 4 MLJ 836 [LNIND 2006 MAD 2078] (FB).
39. CIT v Pyarilal Kasam 198 ITR 110; Plantation Corpn v CAgIT 200 ITR 27. Contra Union Home v UOI 215 ITR 758.
40. Rangaswamy v CWT 221 ITR 39; Govt of India v Jagadish 221 ITR 338; Shankaranarayana v State of Karnataka 239 ITR 902.
41. CIT v Srinivasan 23 ITR 87, 100 (SC); Assam Rlys v IR 18 TC 509, 537 (HL); Beohar Singh v CIT 16 ITR 433, 442–43; CIT v SBI 31 ITR 545, 562; Delhi
Flour Mills v CIT 95 ITR 151.
42. CIT v Sodradevi 32 ITR 615 (SC); Prashar v Vasantsen 49 ITR (SC) 1, 20–21, 28; CIT v Vadilal 86 ITR 2, 9 (SC); Loka Shikshana Trust v CIT 101 ITR 234,
251–53 (SC); CIT v Surat Art Silk 121 ITR 1, 25, 29 (SC); Varghese v ITO 131 ITR 597, 608–09 (SC), CIT v Mahindra 144 ITR 225, 239–40 (SC), CIT v Birla 153
ITR 579, 583; CIT v Madras Motor Ins 159 ITR 601, 614–17 (speech of minister moving the Bill); Assam Frontier Tea v UOI 190 ITR 361, 364; Soorajmull
Nagarmull v CIT 190 ITR 418, 424–25; Sassoon David v CIT 118 ITR 261, 275 (SC); Sajjan Mills v CIT 156 ITR 585, 600 (SC), and CIT v Patel 106 ITR 424,
430–31 (memorandum explaining the Finance Bill); Shashikant Kale v UOI 185 ITR 104, 114 (SC); CIT v Ankineedu 115 ITR 78, 87; Ramanlal v CIT 116 ITR
657, 673; CIT v Sidhwa 133 ITR 840, 864; CIT v Ramanaiah 157 ITR 300, 305. Contrast CIT v Saroop 153 ITR 1, 9 (speech of minister merely reflecting
incorrect departmental view); Plantation Corpn v CAgIT 200 ITR 27, 47–48.
43. CIT v Vijayawada Bottling Co. Ltd. 356 ITR 625.
44. Shashikant Kale v UOI 185 ITR 104, 115 (SC).
45. Shree Sajjan v CIT 156 ITR 585, 600 (SC); CIT v Patel Bros 106 ITR 424, 430–31; Rupenjuli v CIT 186 ITR 301; Jamshedpur Motor v UOI 189 ITR 70; CIT v
Pyarilal Kasam 198 ITR 110.
46. CIT v Central Bank 185 ITR 6.

47. Rangaswamy (M) v CWT 221 ITR 39.
48. Mithilesh v Prem Behari 177 ITR 97 (SC).
49. Ravulu v CIT 30 ITR 163, 169 (SC).
50. Banarsidebi v ITO 53 ITR 100, 106 (SC); Keshavji Ravji v CIT 183 ITR 1 (SC); Ghandhi (FS) v CWT 184 ITR 34 (SC); Sunanda Devi v CWT 204 ITR 842.
51. Per Mukerji J, Rogers v Secretary of State 1 ITC 363, 371; Mangalore Elec Supply Co v CIT 113 ITR 655, 661 (SC); Birmingham Corpn v Barnes 19 TC
195 (HL); Yogindraprasad v CIT 109 ITR 602, 613; CIT v Chaturbhuj 156 ITR 257, 264–65; Gian Chand v UOI 187 ITR 188, 199.
52. CIT v Sodradevi 32 ITR 615 (SC); Prashar v Vasantsen 49 ITR (SC) 1, 20–21, 28; Loka Shikshana Trust v CIT 101 ITR 234, 252 (SC); Varghese v ITO 131
ITR 597, 604–05, 607–08 (SC); Goodyear India v State of Haryana 188 ITR 402, 418 (SC); Fleming v Associated Newspapers 48 TC 382, 402, 410 (HL); Bank
of India v CIT 72 ITR 157, 162–64; Yogindraprasad v CIT 109 ITR 602, 613; Gian Chand v UOI 187 ITR 188, 198–200; Jamshedpur Motor v UOI 189 ITR 70,
74–79.
53. Per Lord Macnaghten, Special Commrs v Pemsel 3 TC 53, 102 (HL); Madras Bank v CIT 1 ITR 158, 165; CIT v Bengalee Society 2 ITR 121, 126; CIT v
Narsee 40 ITR 307, 314 (SC).
54. Ghandhi v CWT 184 ITR 34 (SC).
55. CIT v Kamakshya 16 ITR 325, 329 (PC); Lohia v UOI 152 ITR 308, 372 (SC).
56. CIT v Venkateswara Hatcheries 237 ITR 174 (SC); Seth Mukund v CWT 188 ITR 518; CWT v SBI 213 ITR 1; All Kerala CAA v UOI 258 ITR 679.
57. Jagatram Ahuja v CGT 246 ITR 609 (SC); Sunanda Devi v CWT 204 ITR 842; CIT v Indo Oceanic 247 ITR 247; CGT v Prithvi Nath 239 ITR 809; Amiya
Bala Paul v CIT 262 ITR 407 (SC), AIR 2003 SC 2702 [LNIND 2003 SC 541] , (2003) 6 SCC 342 [LNIND 2003 SC 541] – Similar provision under this Act and
the Wealth Tax Act, 1957; Geo Miller & Co. Ltd. v DCIT 262 ITR 237, (2003) 184 CTR (Cal) 1119. But see CIT v Alok Enterprises 266 ITR 399, (2004) 190 CTR
(SC) 390 where the provisions of the 1922 and 1961 Act were prima facie held as not in pari materia.
58. CWT v Bhaskar Mitter 202 ITR 612; Commissioner of Customs v Indian Oil Corporation Ltd. 267 ITR 272, AIR 2004 SC 2799 [LNIND 2004 SC 235] ,
(2004) 3 SCC 488 [LNIND 2004 SC 235] where the power of the CBDT and CBEC to issue Board circulars under the customs and central excise and
income tax enactments were held to be in pari materia.
59. Re Moolamattom Elec 238 ITR 630.
60. Surana Steels v DCIT 237 ITR 777 (SC).
61. ITO v Maniram 72 ITR 203, 210–11 (SC); Jogendra v CIT 74 ITR 33, 40–41 (SC); Indian Hume Pipe v CIT 74 ITR 762, 778; KC Factory v CIT 106 ITR 348,
356; Chandravati v CIT 114 ITR 302, 314; CIT v Deepchand 183 ITR 299; CWT v India Exchange 197 ITR 356; CWT v Abdul Khader 242 ITR 728; CIT v Fab
Exports 258 ITR 56.
62. Gem Granites v CIT 271 ITR 322 (SC), AIR 2005 SC 1455 [LNIND 2004 SC 1175] , (2005) 1 SCC 289 [LNIND 2004 SC 1175] .
63. Varghese v ITO 131 ITR 597, 617 (SC); Shiv Shankar v CIT 94 ITR 433; Buragadda v ITO 96 ITR 57, wrongly reversed on this point ITO v Buragadda
106 ITR 333; CIT v Ranga 100 ITR 413; Sanjiv v CIT 127 ITR 354; CGT v Kamdin 95 ITR 476; Ahilya v CIT 97 ITR 425; CED v Brahadeeswaran 163 ITR 680,
683.
64. CIT v Strawboard 98 ITR 78, on appeal 177 ITR 431 (SC).
65. Ram Sarup v MunshiAIR 1963 SC 553 [LNIND 1962 SC 286] .
66. CIT v Dharampal Satyapal 380 ITR 527, 544.
67. CIT v Venkateswara Hatcheries 237 ITR 174 (SC).
68. CIT v Kovai Medical and Hospitals Ltd. 313 ITR 262, (2010) 228 CTR (Mad) 302; Land Acquisition Collector v ADIT 396 ITR 410.
69. Goa Carbon Ltd. v CIT 332 ITR 209: DIT v Shree Visheshwar Nath Memorial Public Charitable Trust 333 ITR 248; CIT v Vandana Properties 353 ITR
36, 43; Milan Poddar v CIT 357 ITR 619.
70. CIT v Pyarilal Kasam 198 ITR 110; CIT v Hico Products 201 ITR 567; Filtrona v CIT 207 ITR 545; CIT v South India Corpn 242 ITR 114.
71. West Derby v Metropolitan Life Assurance Society [1897] AC 647 ; Local Govt Board v South Stoneham [1909] AC 57 ; Madras Rly v Bezwada 47 Bom
LR 587 (PC), AIR 1944 PC 71 ; CIT v Murlidhar 16 ITR 146, 149; CIT v Hiramall 24 ITR 199; Ambika v CIT 22 ITR 58, 64; TT v ITO 121 ITR 551, 567–68; CIT v
Pyarilal Kasam 198 ITR 110; Cf CIT v Aspinwall 98 ITR 291, 296–97.
72. Per Lord Macmillan, Madras Rly v Bezwada 47 Bom LR 587, 589 (PC), AIR 1944 PC 71 ; CIT v Indo-Mercantile Bank 36 ITR 1, 4, 7 (SC); Nizam's Trust
v CIT 59 ITR 582 (SC); CIT v Madurai 89 ITR 45, 52 (SC); Mohanlal v CIT 22 ITR 448, 461; CIT v CP Syndicate 22 ITR 493, 497; Sakalchand v ITO 47 ITR 673;
Gian Chand v UOI 187 ITR 188; CIT v Muthuraman 44 ITR 710 (SC); Honey Comb v AgITO 191 ITR 472.
73. CIT v Krishna 53 ITR 176, 182 (SC); CIT v Jagannath 71 ITR 296 (SC).
74. Commr of Comm Taxes v Ramkishan 66 ITR 664, 672–73 (SC); Crown Mills v CIT 29 ITR 733; CIT v Nandlal 47 ITR 803.
75. Per Subba Rao J, CIT v Ajax 55 ITR 741, 749–50 (SC); T.T. P. Ltd. v ITO 121 ITR 551, 567–68; IVRCL-JL (JV) v ACIT 386 ITR 564.
76. Allied Motors v CIT 224 ITR 677 (SC); CIT v Calcutta Export Company 404 ITR 654 (SC); CIT v Sri Jagannath 191 ITR 676; CIT v Achaldas Dhanraj 217
ITR 799.
77. Sundaram Pillai v Pattabhiraman AIR 1985 SC 582 [LNIND 1985 SC 20] , 592 – case law discussed.
78. Sedco Forex International Drill Inc. v CIT 279 ITR 310, 318 (SC), AIR 2006 SC 428 [LNIND 2005 SC 907] , (2005) 12 SCC 717 [LNIND 2005 SC 907] (case
law discussed).
79. Sundaram Pillai v Pattabiraman AIR 1985 SC 582 [LNIND 1985 SC 20] , 593 – followed in Dilip Shroff v JCIT 291 ITR 519, (2007) 6 SCC 329 [LNIND
2007 SC 728] - overruled on another point in UOI v Dharmendra Textile Processors 306 ITR 277 (SC), (2008) 13 SCC 369 [LNIND 2008 SC 1947] . See also
CIT v Cafco Syndicate Shipping Co. 294 ITR 134, (2008) 174 Taxman 406 (Mad); New Okhla Industrial Development Authority v CCIT 406 ITR 178 (SC).
80. CIT v Mangalore Beedi 193 ITR 77; CIT v Maschmeijer 214 ITR 22.
81. CAgIT v Plantation Corpn 247 ITR 155 (SC); CWT v Suresh 211 ITR 811; ITO v Manoharlal 236 ITR 357.
82. CIT v Mohan Meakin 192 ITR 134; CIT v Vincentian Society 194 ITR 743; Ramaswamy Chettiar v CIT 220 ITR 657.
83. CIT v Banque National 194 ITR 167; CIT v Voltas 205 ITR 569.
84. CIT v Reunion Engg 203 ITR 274.
85. CIT v Doraiswamy 183 ITR 559 (SC).
86. ITO v Manoharlal 236 ITR 357.
87. CIT v Jet Airways (I) Ltd. 331 ITR 236.
88. R.P.G. Industries Ltd. v CIT 338 ITR 313; Katira Construction Ltd. v UOI 352 ITR 513.
89. CIT v Patton 193 ITR 49.
90. CIT v Patton 193 ITR 49; CIT v Rajasthan Mercantile 211 ITR 400; CIT v Kerala Electric Lamp Works 261 ITR 721, (2003) 183 CTR (Ker) 182 .
1. CIT v Vinzas Solutions India P. Ltd. 392 ITR 155.
2. Laxmi Inds v ITO 231 ITR 514; CIT v India Steamship 196 ITR 917; CIT v Sri Jagannath 191 ITR 676; ITO v Manoharlal 236 ITR 357.
3. CIT v Rajasthan Mercantile 211 ITR 400.
4. Woodward Governor v CIT 253 ITR 745; CIT v Chemical Co 247 ITR 749; CIT v ONGC 255 ITR 413.
5. Bharat Hari v CWT 207 ITR 1 (SC).
6. CIT v Ahmedbhai 18 ITR 472, 487 (SC); Chandroji v CIT 77 ITR 743, 745–46 (SC); CIT v Angre 61 ITR 636, 643; CIT v Kasturi 120 ITR 827, 831–43; Mathai
v CIT 243 ITR 326; Desai v Ramamurthy 34 ITR 409; Inaroo v CIT 204 ITR 312.
7. CIT v Vadilal 86 ITR 2, 11 (SC); Varghese v ITO 131 ITR 597, 609–10 (SC); Sajjan v CIT 156 ITR 585, 597 (SC); Sanjiv v CIT 127 ITR 354, 362–63; Khoday v
CIT 163 ITR 646; CIT v Indian Products 207 ITR 647 (heading); Chilcott v IR 55 TC 446, 474; PCIT v Saumya Construction P. Ltd. 387 ITR 529, 549.
8. Mahendrakumar v UOI 91 ITR 101, 114–16.
9. CGT v Budur 103 ITR 189; Hindustan Const v CIT 208 ITR 291.
10. Hindustan Const v CIT 208 ITR 291.
11. CIT v Loyal Textile 231 ITR 573 following Aswini Kumar v Arabinda Bose AIR 1952 SC 369 [LNIND 1952 SC 60] .
12. Bhagwan Singh v UOI 209 ITR 824.
13. CGT v Getti 82 ITR 599, 605 (SC); CIT v Strawboard 98 ITR 78, on appeal 177 ITR 431 (SC); Jagatram Ahuja v CGT 246 ITR 609 (SC); Bishambar v CIT
103 ITR 813, 819; Boricha v Sr Regional Manager, FCI 188 ITR 761, 764; Lukkose John v CIT 242 ITR 1.
14. Hariprasad v Divikar [1957] SCR 121 [LNIND 1956 SC 104] , 132; CGT v Kamdin 95 ITR 476, 481–82.
15. CIT v Srinivasa 128 ITR 294, 297 (SC); VF & G Ins v M/s Fraser & Ross AIR 1960 SC 971 [LNIND 1960 SC 151] ; K Balakrishna Rao v Haji Abdulla Sait
(1980) 1 SCC 321 [LNIND 1979 SC 394] , 337; NK Jain v CK Shah (1991) 2 SCC 495 [LNIND 1991 SC 173] (context of welfare legislation); Printers (Mysore)
v Asst CTO (1994) 2 SCC 434 [LNIND 1994 SC 164] (context of concessional rate of tax); Ashok Kapil v Sana Ullah (1996) 6 SCC 342 [LNIND 1996 SC 1545]
; KV Muthu v Angamuthu Ammal (1997) 2 SCC 53 [LNIND 1996 SC 2164] , 57–58; Leo Machodo v CIT 172 ITR 744, 751; CIT v Devarajulu 191 ITR 211; Ritz
v CIT 216 ITR 138; Chartered Housing v Appropriate Authority 250 ITR 1.
16. CIT v Frick India Ltd. 369 ITR 328.
17. CIT v Oswal Agro Mills Ltd. 341 ITR 467.
18. CIT v The Hindu 18 ITR 237, 250, on appeal CIT v Srinivasan 23 ITR 87 (SC); HP Tourism v UOI 238 ITR 38.
19. Dalmia Biscuits v CIT 194 ITR 749; Adikalavan v State of TN 230 ITR 663.
20. Special Comrs v Pemsel 3 TC 53, 94 (HL); John Hudson v Kirkness 36 TC 28 (HL); Edwards v Clinch 56 TC 367, 409–10 (HL); CIT v Gaekwar Foam 35
ITR 662; Swabhimani Souharda Credit Co-operative Ltd. v GoI 421 ITR 670.
21. CIT v Benoykumar 32 ITR 466 (SC); CIT v Venkateswara Hatcheries 237 ITR 174 (SC); Ramachandra v CIT 27 ITR 667; CIT v Kisan Rice Mills 103 ITR
264, 267; CIT v Patel 106 ITR 424, 432; Surajratan v CIT 106 ITR 576, 583; CIT v John Peter 243 ITR 561.
22. CIT v Taj Mahal Hotel 82 ITR 44 (SC); Nawn v CIT 106 ITR 45 (SC); CIT v Nirlon 130 ITR 14, 17 (SC); CIT v Mahindra 144 ITR 225, 240 (SC); Controller v
Parle Exports 183 ITR 624, 635 (SC); Controller v Ballarpur Inds 186 ITR 244, 250 (SC); Comr of Customs v Parasrampuria 253 ITR 274 (SC); CIT v Casino 91
ITR 289; CIT v Strawboard 98 ITR 78, on appeal 177 ITR 431 (SC); Ganesh v ITO 126 ITR 258, 260; CIT v Ratlam Mills 132 ITR 700; Arvind v CIT 137 ITR 635,
640; CIT v Stanton 146 ITR 405; CIT v Zaibunnisa 151 ITR 320, 327; Alikunju v CIT 166 ITR 804, 807; Akash Films v CIT 190 ITR 32; CIT v Madgul 208 ITR
541; SRF v CBDT 211 ITR 861; All Guj FTC v CBDT 214 ITR 276; Jaiswal v CIT 216 ITR 145; CIT v Kwality 245 ITR 252; CIT v Upasana 250 ITR 78; CIT v S
Vijaya Kumar 376 ITR 226.
23. CIT v Mahindra 144 ITR 225, 240 (SC); CBPT v Aditya 170 ITR 137, 143 (SC); Controller v Parle Exports 183 ITR 624, 635 (SC); Kerala SCMF v CIT 231
ITR 814 (SC); CIT v Venkateswara Hatcheries 237 ITR 174 (SC); CIT v Anand Theatres 244 ITR 192 (SC); Payne v Barratt 58 TC 311, 332– 33 (HL), Leo
Machodo v CIT 172 ITR 744, 751; Matreja v CIT 106 ITR 378, 382–83; Mittal v CIT 159 ITR 18; CIT v Birla 170 ITR 150, 161; Kerala Consumers' Fed v CIT 170
ITR 455, 457; Owen v Elliot 186 ITR 40, 44 (Ch D); CIT v Multimetals 187 ITR 98; CIT v Gabrial 188 ITR 464, 466; CIT v Ram Nath 189 ITR 169; CIT v
Devarajulu(GK) 191 ITR 211; CIT v The Statesman 198 ITR 582, 589; CIT v Shivarudrappa 200 ITR 1; Varma, CIT v Laxmi Induction 216 ITR 555; HP
Tourism v UOI 238 ITR 38; CIT v Manonmani 245 ITR 48; CIT v Patel 106 ITR 424, 431, 434; CIT v Chloride India 256 ITR 625.
24. Ritz v CIT 216 ITR 138; Gabriel v ADIT 186 ITR 435; Classic Builders v UOI 251 ITR 492.
25. CIT v Venkateswara Hatcheries 237 ITR 174 (SC); Payne v Barratt 58 TC 311, 332–33 (HL); CIT v Multimetals 187 ITR 98; Reed v Clark 58 TC 528, 552.
26. JCIT v Saheli Leasing and Industries Ltd. 324 ITR 170, (2010) 6 SCC 384 [LNIND 2010 SC 471] .
27. CIT v Punjab Stainless Steel Industries 364 ITR 144, 152 (SC) (Reliance can be placed on a Guidance Note issued by the ICAI).
28. Keshavji Ravji v CIT 183 ITR 1 (SC); Ghandhi v CWT 184 ITR 34 (SC); Sunanda Devi v CWT 204 ITR 842.
29. Sunanda Devi v CWT 204 ITR 842.
30. Jagatram Ahuja v CGT 246 ITR 609 (SC).
31. Narayanan v CIT 223 ITR 209.
32. Chaubey Overseas Corporation v CIT 303 ITR 9, (2008) 218 CTR (All) 494 – following Amar Chandra Chakroborty v CCEAIR 1972 SC 1863 [LNIND
1972 SC 280] , (1972) 2 SCC 442 [LNIND 1972 SC 280] and Grasim Industries Ltd. v Collector of Customs, BombayAIR 2002 SC 1706 [LNIND 2002 SC 260] ,
(2002) 4 SCC 297 [LNIND 2002 SC 260] , (2002) 141 ELT 593 .
33. CIT v The Statesman 198 ITR 582.
34. CIT v Usha Telehoist 212 ITR 177; Jaiswal Estates v CIT 209 ITR 307; CWT v Sen 187 ITR 338.
35. Narayanan v CIT 223 ITR 209.
36. CIT v Hindusthan Motors 192 ITR 619; CIT v Anglo India Jute Mills Co Ltd 202 ITR 104; Gupta v CWT 224 ITR 733; CIT v Mohd Ishaque 232 ITR 869;
CIT v Sivanandha 243 ITR 770; CIT v Maulana Tea 244 ITR 589; CIT v Singapore Airlines Ltd. 358 ITR 237.
37. Rohit Pulp and Paper Mills Ltd. v CCE (1990) 3 SCC 447 [LNIND 1990 SC 281] , (1990) 47 ELT 491 , (1990) 3 SCC 447 [LNIND 1990 SC 281] case law
discussed.
38. CIT v Sangrur Vanaspati Mills Ltd. 311 ITR 345, (2008) 214 (P&H) 432.
39. Stonecraft Enterprises v CIT 237 ITR 131 (SC), AIR 1999 SC 1638 [LNIND 1999 SC 270] , (1999) 3 SCC 343 [LNIND 1999 SC 270] ; Vania Silk Mills P. Ltd.
v CIT 191 ITR 647, AIR 1991 SC 2104 [LNIND 1991 SC 384] , (1991) 4 SCC 22 [LNIND 1991 SC 384] ; CIT v Bharti Cellular Ltd. 319 ITR 139, (2008) 220 CTR
(Del) 258; CIT v Rajkumar 318 ITR 462, (2010) 228 CTR (Del) 506.
40. CIT v Vallabhdas 253 ITR 543; Sree Bhagavathi v CIT 244 ITR 496; Kamla v OD Mohindra 240 ITR 796; Himachal Pradesh Financial v CIT 233 ITR 450;
CWT v Vikram Swarup 224 ITR 698; CIT v Thana Elec 206 ITR 727; CED v Murarilal 179 ITR 380. For the effect of Privy Council's judgments, see Jubilee
Mills v CIT 34 ITR 30, 39 (after 1950, the PC's decisions are only of a persuasive authority), CIT v Asrafidevi 142 ITR 380, 401; Salzgitter v CIT 184 ITR 7, 20–
21 (so long as the SC does not differ from the PC's view, the decision of the PC is still binding upon the High Courts) and CIT v Kontiki 200 ITR 735.
41. Poothundu v AgITO 221 ITR 557 (SC).
42. Even if:
(a) it needs elucidation: CIT v Cotton Agents 31 ITR 744, 750;

(b) it is rendered on an erroneous basis: CIT v Agastyar 149 ITR 609, 620;
(c) a particular argument was not raised before SC: CIT v Jagadish 119 ITR 19, 26; Lila v UOI 141 ITR 836, 839–40; CIT v Nalli 145 ITR 759, 784–85; CWT v
Vikram Swarup 224 ITR 698; CIT v Vallabhdas 253 ITR 543; Shenoy v CTO 155 ITR 178, 187–88 (SC).
43. CIT v Minal 167 ITR 507, 529; CIT v Thana Elec 206 ITR 727. See also post under 'Reliance on Decisions', and 'Obiter dicta, ratio decidendi and casual
observations', for a detailed discussion.
44. Gujarat SCB v CIT 250 ITR 229.
45. UP Pollution Board v Kanoria 259 ITR 321 (SC).
46. Indo-Burma Petroleum v CIT 136 ITR 251, 276; CIT v Sohanlal 143 ITR 901, 904; Bishnu v UOI 168 ITR 815, 840; CIT v Sundaram 253 ITR 396; HMT v
CIT 175 ITR 220; Gouri v CIT 190 ITR 81.
47. Bhika Ram v UOI 238 ITR 113.
48. CIT v Thana Elec 206 ITR 727 (same principle applied for High Court decisions).
49. Bharat Petroleum v Mumbai Shramik 249 ITR 669 (SC).
50. Pradip Parija v Pramod Patnaik 254 ITR 99 (SC).
51. Ballabhadas Mathurdas Lakhani v Municipal Committee AIR 1970 SC 1002 , (1970) 2 SCC 267 .
52. Narinder Singh v Surjit Singh AIR 1984 SC 1359 , (1984) 2 SCC 402 ; Kausalya Devi Bogra v Land Acquisition Officer AIR 1984 SC 892 [LNIND 1984 SC
371] , (1984) 2 SCC 324 [LNIND 1984 SC 371] .
53. Distributors (Baroda) v UOI 155 ITR 120, 140–43 (SC).
54. Keshav Mills v CIT 56 ITR 365, 376–78 (SC); Pillani Inv v ITO 83 ITR 217 (SC); Distributors (Baroda) v UOI 155 ITR 120, 140–43 (SC) (overruling earlier
decision is justified when necessitated by public interest or when previous decision is manifestly wrong).
56. UOI v Godfrey Philips 158 ITR 574, 589–90 (SC); Ujagar v UOI 167 ITR 904; Aditya Minerals v CIT 236 ITR 39 (SC); Parthasarathy v Dipsi 173 ITR 497.
57. UOI v Raghubir Singh 178 ITR 548, 555–68.
59. Kunhayammed v State of Kerala 245 ITR 360 (SC), approving VM Salgaocar v CIT 243 ITR 383 (SC), and followed in Sanjay Jain v CIT 254 ITR 38(on
the aspect of the power of review of the High Court and the scope of the doctrine of merger); Kamla v OD Mohindra 240 ITR 796; Appropriate
Authority, Govt of India v Naresh 200 ITR 773; Palam Gas Service v CIT 394 ITR 300 (SC).
60. Mir Osman Ali v CWT 162 ITR 888, 898 (SC); CED v Pratapsinghji 167 ITR 210 (SC); VM Salgaocar v CIT 243 ITR 283 (SC); Hemalatha v CIT 259 ITR 1
(SC); Sahu v CIT 144 ITR 851, 863 (FB); Amrut v ITO 150 ITR 386, 392; CIT v Indradaman 156 ITR 493; CIT v Oswal 163 ITR 851; Ganesh v CIT 168 ITR 527;
CIT v Jagannathan 180 ITR 191, 196; JK Charitable Trust v WTO 222 ITR 523; IOC v State of Bihar 167 ITR 897 (SC) (dismissal of SLP does not bar writ in
HC), relied on in Kunhayammed v State of Kerala 245 ITR 360 (SC).
61. CIT v New Jehangir Vakil Mills 117 ITR 849, 854; Devichand v CIT 156 ITR 166, 173–74; Appropriate Authority, Govt of India v Naresh 200 ITR 773
(where the SC accepted the correctness of the HC's decision and dismissed the SLP); CIT v Krishna Warrier 208 ITR 823; CIT v Pyarilal Kasam 198 ITR
111, 120.
62. Kunhayammed v State of Kerala 245 ITR 360 (SC); CIT v Darshan 217 ITR 744; Siemens v Subramaniam 143 ITR 120, 139, principle affirmed while
admitting appeal Subramaniam v Siemens 156 ITR 11, and on final hearing of appeal 173 ITR 136. Contrast JK Synthetics v ITO 105 ITR 864, 881; Koduru
v Land Acquisition Officer 170 ITR 15.
63. Khoday Distilleries Ltd. v Sri Mahadeshwara Sahakara Sakkare Karkhane Ltd. (2019) 4 SCC 376 [LNIND 2019 SC 209] .
64. VM Salgaocar v CIT 243 ITR 383 (SC), approved in Kunhayammed v State of Kerala 245 ITR 360 (SC), and followed in Tej Kumari v CIT 247 ITR 210.
65. PCIT v Poonja Service Co-op Bank Ltd. 414 ITR 67 (FB).
66. Benoykumar v CIT 24 ITR 70, 82, affirmed CIT v Benoykumar 32 ITR 466 (SC); Jyotikana v CIT 26 ITR 424, 428, reversed on another point CIT v
Jyotikana 32 ITR 705 (SC); Swadeshi Cotton v ITO 112 ITR 1038; CIT v Mohanlal 114 ITR 583; Kamla v CIT 133 ITR 632, 635; Standard Radiators v CIT 165
ITR 178; State of AP v CTO 169 ITR 564; Graphite v CIT 188 ITR 146 (decision of same High Court must be followed); Geoffrey Manners v CIT 221 ITR 695.
67. Kapadia v CIT 87 ITR 511; CIT v Thana Elec 206 ITR 727; Geoffrey Manners v CIT 221 ITR 695; CIT v Vardhman Spinning 226 ITR 296; Taylor v CIT 232
ITR 771; NR Paper v DCIT 234 ITR 733.
68. Taylor v CIT 232 ITR 771; CGT v Jain 230 ITR 839; CIT v Sunil Kumar 212 ITR 238; CIT v Thana Elec 206 ITR 727; Indian Tube v CIT 203 ITR 54; CIT v
Joshi and Joshi 202 ITR 1017.
69. CIT v Highway 217 ITR 234; CIT v Maganlal 210 ITR 580.
70. CIT v Godavaridevi 113 ITR 589; CIT v Vrajlal 127 ITR 512; Jai Kumar v Controller 204 ITR 118; CIT v UP Hotel 123 ITR 626, 633–34; Sundaresa v CED
127 ITR 107; CED v Ashok 186 ITR 212; CIT v Nirmalabai 186 ITR 242; CIT v Pitambardas 216 ITR 172. Contrast CIT v Ved Parkash 178 ITR 332; CIT v Shah
Elec 207 ITR 350.
71. Humayun Suleman Merchant v CCIT 387 ITR 421, 433.
72. Gordhanbhai Nagardas Patel v DCIT 398 ITR 307, 315.
73. Controller v Ashok Kumar 186 ITR 212.
74. CIT v Devidayal 189 ITR 506.
75. CIT v Indian Rare Earth 181 ITR 22.
76. CIT v Thana Elec 206 ITR 727; CIT v BR Consts 202 ITR 222.
77. CIT v Thana Elec 206 ITR 727; CIT v BR Consts 202 ITR 222.
78. CED v Devaki 212 ITR 395 (SC); CIT v BK Roy 248 ITR 245; CIT v Krishna Warrier 208 ITR 823; CIT v Thana Elec 206 ITR 727; CIT v BR Consts 202 ITR
222; CIT v Meat Products 224 ITR 1.
79. CIT v Thana Elec 206 ITR 727.
80. Sundarjas Bhatija v Coll 183 ITR 130 (SC); CED v Devaki 212 ITR 395 (SC); Jayshreeben v OD Mohindra 249 ITR 223; CIT v Manonmani 245 ITR 48;
CIT v Thana Elec 206 ITR 727; CIT v BR Consts 202 ITR 222; Kanmula v Bharat Petroleum 187 ITR 326.
81. CIT v Thana Electricity Supply Ltd. 206 ITR 727.
82. CIT v Thana Elec Supply Ltd 206 ITR 727, followed in Geoffrey Manners v CIT 221 ITR 695 and Consolidated Pneumatic v CIT 209 ITR 277; Suresh
Desai v CIT 230 ITR 912; CIT v Highway 217 ITR 234.
83. CIT v Laxmi Induction 216 ITR 555.
84. CIT v Thana Elec 206 ITR 727.
85. CIT v Sarabhai Sons 204 ITR 728; Dalmia v CIT 125 ITR 425, 429; Sundaram v CIT 159 ITR 646, 652–53; Leo Machodo v CIT 172 ITR 744, 757–58; CIT v
Indian Card Clothing 110 ITR 103, 113; CIT v Maneklal 115 ITR 725, 728; Durgaprasad v CIT 134 ITR 601, 605; CIT Jayantilal 137 ITR 257, 265; Arvind v CIT
137 ITR 635, 641–42; CIT v Sarabhai 143 ITR 473; Mohan Meakin v CIT 118 ITR 300; Ramanlal v CIT 91 ITR 250, 255; CIT v Tata Sons 97 ITR 128;
Amalgamated Elec v CIT 97 ITR 334, 345; Maneklal v CIT 24 ITR 375, 385; Ambika v CIT 22 ITR 58, 64; Beohar v CIT 16 ITR 433, 442; Re Shirinbai 15 ITR
284, 290; Re Sarupchand 13 ITR 245, 260; Kotha v CIT 12 ITR 97, 104; Chimanram v CIT 11 ITR 44, 66; Manufacturers' Life Ins v CIT 6 ITR 321, 333; Re
Rawji 8 ITR 1, 6. See also Viscount Simon LC in City of London IT Comrs v Gibbs 24 TC 221, 244 (HL), 10 ITR Suppl 121, 132; Patil v UOI 151 ITR 48; CIT v
Meat Products 224 ITR 1; Cf CIT v Asrani 122 ITR 735, 748–49, 753–54. This view was also followed in Peirce Leslie v CIT 216 ITR 176; Goculdas v Shah 211
ITR 706 and CIT v Deepak Family Trust 211 ITR 575.
86. CIT v Balkrishna 81 ITR 759 (SC); ALA Firm v CIT 189 ITR 285, 307 (SC); Mohan Meakin v CIT 118 ITR 300; Fitzleet v Cherry 51 TC 708 (HL).
87. Linde AG Linde Engineering Division v ADIT 365 ITR 1, 43-44, para 65.
88. Goodyear India v State 188 ITR 402 (SC); CIT v Ramakrishnan 202 ITR 997; CIT v Kamla 213 ITR 177; CIT v Sudhir 214 ITR 154; Guj SCB v CIT 250 ITR
229; Cf State of Punjab v Surinder Kumar 194 ITR 434 (SC); CIT v Surji Devi 186 ITR 728.
89. CIT v Sun Engg 198 ITR 297 (SC); Lally Jacob v ITO 197 ITR 439; Banyan and Berry v CIT 222 ITR 831.
90. CIT v Sun Engineering Works Pvt Ltd. 198 ITR 297 (SC), followed in CIT v Late Begum Noor 204 ITR 166; Chamber of ITC v CBDT 209 ITR 660 and CIT
v Sudhir 214 ITR 154.
91. SRF Finance v CBDT 211 ITR 861; CIT v Ramakrishnan 202 ITR 997.
92. CWT v Karan Singh 200 ITR 614 (SC).
93. Padmasundra Rao v State of TN 255 ITR 147 (SC); CIT v Ram Narain 227 ITR 401; Govt of India v Jagadish 221 ITR 338; Cf Vanaja v CIT 208 ITR 161.
1. Padmasundra Rao v State of TN 255 ITR 147 (SC).
2. Susanta Kumar v UOI 185 ITR 627.
3. Kishorilal v CWT 197 ITR 595. Contrast CIT v SSM Finishing 186 ITR 597.
4. CIT v Abdul Wahid 243 ITR 467.
5. Bryan A. Garner, Black's Law Dictionary, 9th Edition, West: St. Paul, p. 1177. The Latin expression literally means "something said in passing".
6. Director of Settlement v M.R. Appara (2002) 4 SCC 638 [LNIND 2002 SC 232] .
7. State of Haryana v Ranbir (2006) 5 SCC 167 [LNIND 2006 SC 251] ; MCD v Gurnam Kaur (1989) 1 SCC 101 [LNIND 1988 SC 441] .
8. Divisional Controller, KSRTC v Mahadeva Shetty (2003) 7 SCC 197 [LNIND 2003 SC 608]
9. The Oriental Insurance Company Limited v Meena Variyal AIR 2007 SC 1609 [LNIND 2007 SC 410] ; Basant Kumar Pal v The Chief Electrical Engineer
AIR 1956 Cal 93 [LNIND 1955 CAL 100] .
10. Mohandas Issardas v A.N. Sattanathan AIR 1955 Bom 113 [LNIND 1954 BOM 74] ; Peerless General Finance and Investment Co. Ltd. v CIT 416 ITR 1
(SC); TISCO v Bapat 101 ITR 292.
11. Peerless General Finance and Investment Co. Ltd. v CIT 416 ITR 1 (SC); Kharawala v ITO 147 ITR 67, 84; CIT v AP Riding Club 168 ITR 393, 404.
12. CIT v Sidhwa 133 ITR 840, 857–58; Indo-Burma Petroleum v CIT 136 ITR 251, 275; Sirsa v CIT 178 ITR 437. On this point, see comment on
Ahmedabad Calico v ITO 118 ITR 544 under deleted s 80K.
13. Arun Kumar Aggarwal v State of Madhya Pradesh (2014) 13 SCC 707 [LNIND 2011 SC 846] ; Girnar Traders v State of Maharashtra (2007) 7 SCC 555
[LNIND 2007 SC 1007] .
14. Salmond on Jurisprudence, 12th edn, p 148.
15. Warner Lambert v CIT 205 ITR 395.
16. CIT v BR Consts 202 ITR 222.
17. CIT v Peerless General Finance & Investment Co. Ltd. 282 ITR 209, (2006) 154 Taxman 179 .
18. Agrawal Warehousing and Leasing Ltd v CIT 257 ITR 235.
19. UOI v Kamlakshi Finance Corporation Ltd. AIR 1992 SC 711 , 712.
20. Sayaji Iron and Engineering Co v CIT 253 ITR 749, following CIT v LG Ramamurthi 110 ITR 453.
21. CIT v LG Ramamurthi 110 ITR 453.
22. Radhasoami Satsang v CIT 193 ITR 321, 329 (SC); CIT v ARJ Security Printers 264 ITR 276; Municipal Corporation of Thane v Vidyut Metallics 20 VST
680 (SC);CIT v JCB India Ltd. 376 ITR 621; Zazsons Exports Ltd. v CIT 397 ITR 40; Galileo Nederland BV v ADIT 367 ITR 319, 331.
23. Maharao Bhim Singh of Kota v CIT 390 ITR 532, 546 (SC).
24. Bharat Sanchar Nigam Ltd. v UOI 282 ITR 273, 286 (SC); Meeraj Estate Developers v CIT 418 ITR 681.
25. Godrej & Boyce Manufacturing Co. Ltd. v DCIT 349 ITR 449, 472 (SC).
26. Parashuram Pottery Works Co. Ltd. v ITO 106 ITR 1, 10 (SC).
27. CIT v Excel Industries Ltd. 358 ITR 295, 304 (SC).
28. J.K. Synthetics Ltd. v UOI 1981 (8) ELT 328 .
29. TMM Sankaralinga Nadar & Bros. v CIT 4 ITC 226.
30. CIT v Visweswar 3 ITR 216, 219; CIT v Saran 14 ITR 152, 171–72; Re Scottish Widow's Fund 1 TC 7, 10; Re Young 1 TC 57, 61–62.
31. Mustafa v CIT 16 ITR 330, 335 (PC); Bacha Guzdar v CIT 27 ITR 1, 4 (SC); CIT v Venkataswamy 29 ITR 529 (SC); CIT v Ramakrishna 35 ITR 312, 316–17
(SC); Parimisetti v CIT 57 ITR 532. 536 (SC); Udhavdas v CIT 66 ITR 462 (SC) (sequel in Udhavdas v CIT 140 ITR 392); Keren v IR 17 TC 27, 58 (HL);
Hochstrasser v Mayes 42 ITR 457, 469 (HL), 38 TC 673; Dilip Kumar Roy v CIT 94 ITR 1, 5, 10; CIT v Mahvirprasad 193 ITR 530; CIT v Orissa SWC 201 ITR
729. See Additional Cases in Vol II.
32. Per Venkatarama Ayyar J, Ravulu v CIT 30 ITR 163, 173 (SC); Karamchari Union v UOI 243 ITR 143 (SC).
33. CIT v The Tribune Trust 16 ITR 214, 224; Jayantkumar v UOI 226 ITR 742.
34. Assam Co v State of Assam 248 ITR 567 (SC). See also post under s 1, 'Rules, notifications and executive instructions'.
35. Chowgule v CIT 195 ITR 810, on appeal, CIT v Chowgule 218 ITR 385 (SC).
36. Indian Express Newspapers v UOI 159 ITR 856 (SC).
37. Mukherjea J.
38. CIT v Ajanta Elec 215 ITR 114, 119 (SC); Indra Singh v CIT 26 ITR 670, 678; CWT v Dominic 195 ITR 412; Ajay Kumar v CWT 206 ITR 98; Kanodia v CIT
215 ITR 369; Bansal v UOI 145 ITR 642 (delegated legislation is not inferior to legislation by Parliament).
39. Bharat Hari Singhania v CWT 207 ITR 1 (SC) and Verghese v DCIT 210 ITR 526 (even after they are laid before both the Houses of Parliament).
40. CWT v Susheela 176 ITR 232.
41. See post under s 295, 'Ultra vires rules'. Assam Co v State of Assam 248 ITR 567 (SC); CIT v Chenniappa 74 ITR 41 (SC); CIT v Ajanta Elec 215 ITR 114,
119 (SC); Udeshi v CIT 114 ITR 542; All India Lakshmi v UOI 150 ITR 1 [exemption granted by statute cannot be enlarged by rules); CIT v Hardware
Exchange 190 ITR 61 (overruled in Attar Singh v ITO 191 ITR 667 (SC), but the general observations regarding rules continue to remain relevant.]
42. CIT v Trustees of Shri Tekchand 184 ITR 537.
43. CIT v Raab Pipe 226 ITR 710.
44. All India Lakshmi v UOI 150 ITR 1.
45. Hukumchand v State of MP 52 ITR 583, 589 (SC). See further under 'Order or notice under wrongs', and under s 292B.
46. Allaudin v ITO 52 ITR 900.
47. Jaya v UOI 129 ITR 652.
48. Nalini v DIT 257 ITR 123.
49. Suresh Deole v CCIT 188 ITR 741. See also under s 2(33).
50. CIT v Ratnam 188 ITR 494; UOI v Asia Tobacco 196 ITR 318; UOI v Ganesh 244 ITR 691 (SC).
51. Asia Tobacco v UOI 155 ITR 568, affirmed in UOI v Asia Tobacco 196 ITR 318.
52. CIT v Moran Tea 194 ITR 429.
53. State of MP v GS Dall Mills 187 ITR 478 (SC).
54. CIT v Sirpur Paper 237 ITR 41 (SC); CIT v Mahindra 252 ITR 576.
55. Dist Council v Dwet Singh 169 ITR 468 (SC).
56. Indian Express v UOI 159 ITR 856 (SC). See also Nandlal v State of Madhya Bharat 43 ITR 143 (SC).
57. State of MP v GS Dall Mills 187 ITR 478 (SC).
58. Coll of Central Excise v Parle Exports 183 ITR 624 (SC).
59. C Ag IT v Thalayar 131 ITR 162, 171–72 (reference application to Ag IT Tribunal); CIT v Gupta 146 ITR 506 (deleted s 146); CIT v New India 111 ITR
197 [pre-1971 s 184(7)]; Adam v CIT 4 ITR 100 [s 239(2)]; Subba Rao v IAC 167 ITR 757 (s 269G); Sarojini v IAC 242 ITR 329. See also Deen Dayal v ITT 158
ITR 391 (s 269G) where question whether tribunal is 'court' within s 5 of Limitation Act was left open; Vorion v IAC 246 ITR 638. Contrast Manoj v IAC
150 ITR 696 (s 269G) where this question was not urged. Tribunal had no power under 1922 Act to condone delay in filing reference application: see
under s 256(1), 'Limitation period for reference application to tribunal'. Cf ss 119(2)(b) and 293B.
60.
(a) Section 256(2): Gupta v CWT 148 ITR 366; Kwality v CIT 158 ITR 188 (approved in Kusum v CIT 190 ITR 24, applied in CIT v Ammonia 177 ITR 479)
and Phool v CIT 141 ITR 774 (yes); Cf under s 256(1), 'Limitation period for reference application to tribunal'.
(b) Section 269H: IAC v Kedarnath 133 ITR 746 (no); CIT v Trilokinath 147 ITR 613 (yes). Cf Nihalkaran v CWT 168 ITR 508 (FB) (yes, under WT Act).
61. Vedabai v Shantaram 253 ITR 798 (SC); Guj Elec v CIT 255 ITR 396 (power of CBDT to condone delay).
62. Anusayaben v Jt CIT 256 ITR 685.
63. Ajantha v CBDT 102 ITR 281 (SC).
64. Bharat Nidhi v UOI 92 ITR 1.
65. Rasiklal v CWT 121 ITR 219.
66.
(a) Old s 3(4): Assam Tea v IAC 164 ITR 253.

(b) section 127(1): Ajantha v CBDT 102 ITR 281 (SC).
(c) section 143(3): Gunda v CIT 7 ITR 21, 28 (FB); Nathuram v CIT 25 ITR 216, 219; Radheylal v CIT 4 ITC 454, 463; CIT v Khemchand 8 ITR 159;
Dhunichand v CIT 2 ITC 188; Anderson v IR 18 TC 320.
(d) sections 145 and 254: Jonnalagadda v CIT 36 ITR 485; Yaggina v CIT 62 ITR 528; Sarabhaiah v CIT 64 ITR 175; Cf CIT v Pilliah 63 ITR 411, 415 (SC).
(e) section 216: CIT v Hindusthan Sanitary Ware 180 ITR 21.
(f) sections 222–23: Prakasam v Tahsildar 97 ITR 235; Gangadhar v TRO 177 ITR 176, 187–88, affirmed in TRO v Gangadhar 234 ITR 188 (SC); Bijli v
TRO 101 ITR 624.
(g) section 250: Abdul Sathar v CIT 169 ITR 84, 92; Rampratap v CIT 3 ITC 362; EM Chettyar v CIT 4 ITC 111.
(h) section 263: CIT v Sunderial 96 ITR 310; CIT v RK Metal 112 ITR 445; CIT v Shantilal 142 ITR 778, 783–84.
(i) section 269UD: Gautam v UOI 199 ITR 530 (SC) and Government of India v Maxim 190 ITR 101 (reasons should be communicated to the affected
party);
(j) Section 273A: Sannaiah v CIT 95 ITR 435; Paras v CIT 114 ITR 834; Rasiklal v CWT 121 ITR 219; Shiv Narain v CWT 121 ITR 224; Baidya v CWT 140
ITR 801; Purshottam v Anantarama 154 ITR 438; Ramjanki v CIT 188 ITR 63; Deepakchandra v CIT 195 ITR 45;
(k) purely administrative order: Jaikishan v CIT 178 ITR 481, 488–89.
67.
(a) Old s 3(4): Assam Tea v IAC 164 ITR 253.

(b) section 127(1): Ajantha v CBDT 102 ITR 281 (SC).
(c) section 143(3): Gunda v CIT 7 ITR 21, 28 (FB); Nathuram v CIT 25 ITR 216, 219; Radheylal v CIT 4 ITC 454, 463; CIT v Khemchand 8 ITR 159;
Dhunichand v CIT 2 ITC 188; Anderson v IR 18 TC 320.
(d) sections 145 and 254: Jonnalagadda v CIT 36 ITR 485; Yaggina v CIT 62 ITR 528; Sarabhaiah v CIT 64 ITR 175; Cf CIT v Pilliah 63 ITR 411, 415 (SC).
(e) section 216: CIT v Hindusthan Sanitary Ware 180 ITR 21.
(f) sections 222–23: Prakasam v Tahsildar 97 ITR 235; Gangadhar v TRO 177 ITR 176, 187–88, affirmed in TRO v Gangadhar 234 ITR 188 (SC); Bijli v
TRO 101 ITR 624.
(g) section 250: Abdul Sathar v CIT 169 ITR 84, 92; Rampratap v CIT 3 ITC 362; EM Chettyar v CIT 4 ITC 111.
(h) section 263: CIT v Sunderial 96 ITR 310; CIT v RK Metal 112 ITR 445; CIT v Shantilal 142 ITR 778, 783–84.
(i) section 269UD: Gautam v UOI 199 ITR 530 (SC) and Government of India v Maxim 190 ITR 101 (reasons should be communicated to the affected
party);
(j) Section 273A: Sannaiah v CIT 95 ITR 435; Paras v CIT 114 ITR 834; Rasiklal v CWT 121 ITR 219; Shiv Narain v CWT 121 ITR 224; Baidya v CWT 140
ITR 801; Purshottam v Anantarama 154 ITR 438; Ramjanki v CIT 188 ITR 63; Deepakchandra v CIT 195 ITR 45;
(k) purely administrative order: Jaikishan v CIT 178 ITR 481, 488–89.
68. CIT v Rashtradoot (HUF) 412 ITR 17, 26-27 (SC).
69. Per Khanna J, CIT v Simon Carves 105 ITR 212, 218 (SC); Raghuram Grah P. Ltd. v ITO 281 ITR 147, (2006) 201 CTR (All) 268.
70. Board's Circular dated April 11, 1955, cited in Chokshi v CIT 107 ITR 63, 71; CIT v Ahmedabad Mills 128 ITR 486, 491; CIT v Mattoo 139 ITR 1020, 1023,
1027; CIT v K N Oil 142 ITR 13, 15; Parekh v CIT 150 ITR 105, 118, and Dattatraya v CIT 150 ITR 460, 463. See also CIT v Mahalaxmi Mills 160 ITR 920, 928
(SC); Anchor Pressings v CIT 161 ITR 159, 161 (SC); Nathmal v CIT 122 ITR 168, 173–74 (FB); CIT v Archana 136 ITR 355, 360; West Bengal SWC v CIT 157
ITR 149; CIT v Oswal 163 ITR 484; Wipro Ltd v DCIT 382 ITR 179, 221. Cf Indian Aluminium v CIT 141 ITR 258, 267.
71. Dalmia Power Ltd. v ACIT 420 ITR 339 (SC).
72. Jayamal v CIT 230 ITR 142.
73. OCM v CIT 138 ITR 689; Deepchand v ITO 145 ITR 676. See also CST v Auraiya 167 ITR 458 (SC); Salonah v Supdt of Taxes 173 ITR 42 (SC); Asia
Tobacco v UOI 155 ITR 568, 590–92; Parthasarathy v Dipsi 173 ITR 497; Kamalpur Tea v Supdt of Taxes 175 ITR 142; U Foam v Coll 175 ITR 326; Board's
Circular dated October 21, 1980, 130 ITR (St.) 1 (ss 192 to 194D). Cf Sundaram v ITO 163 ITR 662; Dhrangadhra Municipality v Dhrangadhra Chemical
174 ITR 77 (Guj); and the last footnote under deleted s 141.
74. Narayan Row v Model Mills 64 ITR 67 (SC); Vallabh v UOI 155 ITR 560 (SC); Sohan v CIT 46 ITR 523; Chhaganlal v ITO 58 ITR 777; Arvind Mafatlal v
UOI 90 ITR 429; Syed Mubarik v ITO 120 ITR 378; Abdul Sathar v Ag ITO 132 ITR 875, 880; Deepchand v ITO 145 ITR 676; Asia Tobacco v UOI 155 ITR 568,
590–92; Coll v Andhra Fertilizer 175 ITR 549; Gangadhar v TRO 177 ITR 176, 187–88, affirmed in TRO v Gangadhar 234 ITR 188 (SC); Chandabai v ITAT
194 ITR 422 (assessment made without jurisdiction); UOI v Sarojini 97 ITR 37 (suit); Shaukat v TRO 136 ITR 89; Mettur v IAC 150 ITR 341 (alleged tax dues
set off against refund claimed). Cf Vrajlal v Shariff 96 ITR 217.
75. Mahabir v State of MP 184 ITR 548 (SC) (starting point of limitation discussed); UOI v Sarojini 97 ITR 37.
76. CIT v Ag Finance 193 ITR 156.
77. K Musthafa v State of Kerala 256 ITR 538.
78. Redihot Elec v UOI 185 ITR 664.
79. Jwala Prasad Sikaria v CIT 175 ITR 535; Rajasthan Kishore v ITO 188 ITR 765.
80. Gulbanu v CIT 186 ITR 226.
81. Hukumchand v State of MP 52 ITR 583, 589 (SC); Isha v TRO 101 ITR 449, 452 (SC); Nandlal v CIT 232 ITR 540; CIT v Amiya 240 ITR 378. Contrast CIT
v Tarajan Tea 200 ITR 12, affirmed in 236 ITR 477 (SC).
82. CIT v Sheolal 33 ITR 47; UOI v Azadi Bachao Andolan 263 ITR 706 (SC).
83.
(a) CIT's order assigning case to ITO: Hazarimal v ITO 41 ITR 12 (SC); Bharat Nepal v CIT 83 ITR 835.
(b) assessment: Ramchand v CIT 63 ITR 252; Bidyut v ITO 79 ITR 187; Laxmi Inds v ITO 79 ITR 248; CIT v Hargopal 82 ITR 243; Kisan Transport v CIT 88
ITR 122; Dhampur v CIT 90 ITR 236, 242; Probodh v ITO 98 ITR 273; CIT v Surajpal 108 ITR 746, 750, affirmed in 188 ITR 297 (SC); Boga v AAC 110 ITR
1 (FB); CIT v Kishnibai 110 ITR 19; CIT v Motilal 118 ITR 825; Shyam Sunder v Nadkarni 155 ITR 500, 505.
(c) rectification: CIT v Sheolal 33 ITR 47; Bharucha v Venkatesan 74 ITR 513; Giridharilal v CIT 78 ITR 133, 139–41; Adaikkappa v CIT 78 ITR 285; CIT v
Ramdayal 90 ITR 426; CIT v National Small Inds 91 ITR 579; CIT v Satnam 92 ITR 42; Chhogmal v ITO 100 ITR 29; CIT v Madurai 104 ITR 36; CIT v
Dalmia 117 ITR 930, affirmed in 236 ITR 46 (SC); CIT v Srikishan 125 ITR 730; CIT v Pakco 143 ITR 415; Guruprasad v CIT 158 ITR 278.
(d) cancellation of firm's registration: Mahabir v CIT 102 ITR 466.
(e) penalty notice: CIT v Ochhavlal 97 ITR 414, 421–22; Narayan v CIT 113 ITR 630. See also s 147, under 'Appeal'.
84. CIT v Khemchand 6 ITR 414, 426 (PC); Sidhwa v CIT 50 ITR 337, 345; Maheshwari v CIT 68 ITR 437; Santlal v CIT 86 ITR 76; Bhagwati v CIT 6 ITC 105.
Cf CIT v Tirur 126 ITR 395; CIT v IIT 166 ITR 694 (reference application wrongly made under present Act instead of 1922 Act).
85.
(a) to HC under Motor Vehicles Act: Concord Ins v Nirmaladevi 118 ITR 507 (SC).
(b) under s 269G: Manoj v IAC 150 ITR 696. Cf IAC v Kedarnath 133 ITR 746, 755.
(c) to tribunal under WT Act: Arun v Twigg 153 ITR 131.
(d) to tribunal under IT Act: Avtar v CIT 133 ITR 338.
86.
(a) section 184(4): CIT v Khemraj 114 ITR 75; Subhkaran v Kazi 152 ITR 231.
(b) section 256(2): Kwality v CIT 158 ITR 188; CIT v India Capacitors 180 ITR 641 (delay by CIT due to laches on part of Ministry of Law); CIT v Bharat
Heavy Elecs 168 ITR 499 and CIT v Ammonia Supplies 177 ITR 479 (delay in re-presentation). Cf Phool v CIT 141 ITR 774; Gupta v CWT 148 ITR 366.
87. Ganesh v IAC 142 ITR 101.
88. Lachman v Nitsure 132 ITR 631; CWT v Ajitkumar 140 ITR 389; CWT v Chiranjilal 140 ITR 687; CIT v Mohammed Yakoob 174 ITR 29.
89. Kripa v CIT 181 ITR 183.
90. Mahaveerprasad v CIT 172 ITR 331.

91. Sanofi Pasteur Holding SA v Department of Revenue 354 ITR 316, 382-384.
92. CIT v Hitech Arai Ltd. 368 ITR 577.
93. Ishikawajima-Harima Heavy Industries v DIT 288 ITR 408, 440 (SC).
94. Sundaram Finance Ltd. v State of Kerala AIR 1966 SC 1178 [LNIND 1965 SC 345] .
1. Vodafone International Holdings BV v UOI 341 ITR 1, 35-37 (SC).
2. CIT v Sri Meenakshi Mills Ltd. 63 ITR 609 (SC); Juggilal Kamlapat v CIT 73 ITR 702 (SC).
3. Vodafone, ibid, pp 36, 85 and 92 - cited with approval United States v Bestfoods 524 U.S. 51 (1998) and Adams v Cape Industries Pte. Ltd. (1991) 1 All
ER 929 (CA).
4. Vodafone, ibid p. 43-44.
5. Per Lord Haldane LC, Sugden v Leeds 6 TC 211, 253 (HL); State of UP v Raza Buland 118 ITR 50 (SC); Achamma v IAC 180 ITR 57; Kamlaker v CIT 67
ITR 351, 357–58; CIT v Dalmia 135 ITR 346, 350–51; Ghisalal v CIT 248 ITR 506.
6. Jain v UOI 77 ITR 107, 112 (SC); Prince Azam v ETO 83 ITR 92 (SC); Adinarayana v ITO 52 ITR 987; Mukandlal v UOI 148 ITR 461; Achamma v IAC 180
ITR 57; Walchand v CIT 204 ITR 146.
7. Per Channell J, Stevens v Durban 5 TC 402, 407; ITO v Bachu 60 ITR 74 (SC); Laxmipat v CIT 72 ITR 291, 294 (SC); CIT v Sidhwa 133 ITR 840, 859–61;
Att-Gen v London County Council 5 TC 242, 260 (HL); Bradbury v English Sewing 8 TC 481, 513 (HL); Glasson v Rougier 26 TC 86, 89; Re Kamdar 14 ITR
10, 52; Madanlal v CIT l6 1TR 227, 236; TISCO v UOI 75 ITR 676; Kori v APTO 192 ITR 278; Ghisalal v CIT 248 ITR 506. Cf Sri Krishna v Town Area
Committee 183 ITR 401 (SC) (connotation of 'double taxation' discussed); Canadian Eagle v King 27 TC 205 248 (HL); Ganpatrai v CIT 138 ITR 294.
8. Municipal Council, Kota v Delhi Cloth 249 ITR 560 (SC); TISCO v UOI 75 ITR 676; Kori v APTO 192 ITR 278; Ghisalal v CIT 248 ITR 506.
9. CIT v Surat Cotton 202 ITR 932 [under s 2 (22) and also under ss 45 and 48.]
10. CIT v Surat Cotton 202 ITR 932 [under s 2 (22) and also under ss 45 and 48.]
11. Nagappa v CIT 73 ITR 626, 633 (SC); Jyotendrasinhji v SI Tripathi 201 ITR 611 (SC); CIT v Sanchay Angana 234 ITR 772.
12. See post under ss 160–161, '...Department's option to assess representative assessee or person beneficially entitled to income'.
13. Gouranga v ITO 247 ITR 737; Kori v APTO 192 ITR 278.
14. State of UP v Raza Buland Sugar Co Ltd. 118 ITR 50, 55.
15. CIT v Prabha 192 ITR 416.
16. IR v Sanderson 8 TC 38, 44.
17. IR v Sanderson 8 TC 38, 44–45.
18. CIT v Hasanali 165 ITR 195; Walchand v CIT 204 ITR 146.
19. Sri Krishna v Town Area Committee 183 ITR 401 (SC).
20. ITO v Radha Krishnan 254 ITR 561 (SC) (company and shareholder); ITO v Atchaiah 218 ITR 239 (SC) (AOP and member).
21. Sri Krishna v Town Area Committee 183 ITR 401 (SC); Municipal Council, Kota v Delhi Cloth 249 ITR 560 (SC).
22. See Maharaja of Kapurthala v CIT 13 ITR 74, 90; Beohar Singh v CIT 16 ITR 433, 441; Shiv Shankar v CIT 94 ITR 433; CGT v Hasan Mumtaz 168 ITR
412; Rajniti v CIT 4 ITC 264, 278–79; Reid v IR 14 TC 512, 521. Cf Jamnaprasad v CIT 130 ITR 244, 259 (SC).
23. Manindra v Secretary of State ILR 34 Cal 257, 288.
24. Byramji v Prov of Bom 7 ITR 670.
25. CIT v Gajapathy 53 ITR 114, 117–18 (SC); CIT v Shaw Wallace 6 ITC 178 (PC); Bacha Guzdar v CIT 27 ITR 1, 7 (SC); CEPT v Lakshmi Silk 20 ITR 451,
456 (SC); Bejoy Singh v CIT 1 ITR 135, 139 (PC); Gopal v CIT 3 ITR 237, 242 (PC); CIT v Fletcher 5 ITR 428, 433 (PC); CIT v Chunilal 6 ITR 521, 531 (PC); CIT v
Western India Life Ins 17 ITR 125, 129 (PC); Wadio v CIT 17 ITR 63, 124 (FC); All India Spinners' Assn v CIT 12 ITR 482, 486 (PC); Re Indian Iron 9 ITR 539,
affirmed in 11 ITR 328 (PC); Madhavlal v Idurkar 30 ITR 332; CIT v Ahmedabad Rana 70 ITR 503; CIT v Ahmedabad Rana 88 ITR 354, affirmed in 140 ITR
1 (SC).
26. See Rungta v CIT 54 ITR 447.
27. Pondicherry Rly v CIT 5 ITC 363, 37 (PC); Re The Tribune 7 ITR 415, 425 (PC); CIT v Mahaliram 8 ITR 442, 449 (PC); Kamakshya v CIT 11 ITR 513, 518
(PC); CIT v Vazir Sultan 36 ITR 175, 179 (SC); Cal Co v CIT 37 ITR 1, 9 (SC); Indian Molasses v CIT 37 ITR 66, 78 (SC); Nawn v CIT 106 ITR 45, 49 (SC); Ram
Narain v CIT 73 ITR 423 (where the basis of the Indian legislation is the English law); Municipality v Godhra Elec 73 ITR 44, 48 (SC).
28. Wallace v CIT 16 ITR 240, 245 (PC); Wadia v CIT 17 ITR 63 (FC); Gov-Gen-in-C v Raleigh 12 ITR 265 (FC), on appeal 15 ITR 332 (PC); British Columbia
Rly v King 15 ITR Suppl 1, 9 (PC); Electronics Corp v CIT 183 ITR 43 (SC).
29. Wallace v CIT 16 ITR 240, 246 (PC); Caltex v CIT 21 ITR 278; Electronics Corp v CIT 183 ITR 43 (SC).
30. Hoechst v State of Bihar 154 ITR 64, 109 (SC); Electronics Corp v CIT 183 ITR 43 (SC) (a nexus with something in India is necessary).
31. Wadia v CIT 17 ITR 63, 72–73 (FC); Gov-Genin-C v Raleigh 12 ITR 265, 278 (FC), on appeal 15 ITR 332 (PC); Hoechst v State of Bihar 154 ITR 64, 109
(SC).
32. Wadia v CIT 17 ITR 63, 122 (FC); Trinidad v CIT 13 ITR Suppl 14, 16–17 (PC); Caltex v CIT 21 ITR 278.
33. Electronic Computation of India Ltd. v CIT 183 ITR 43 (SC).
34. GVK Industries Ltd. v ITO 332 ITR 130 (SC) on appeal from GVK Industries Ltd v ITO 228 ITR 564.
35. GVK Industries, ibid., p. 166 – 167.
36. Poompuhar Shipping Corporation Ltd. v ITO (T.C. (A). No. 2206 to 2208 of 2006 dated October 9, 2013).
37. Bank voor Handel en Scheepvaart NV v Administrator of Hungarian Property 35 TC 311, 346.
38. APSRTC v ITO 52 ITR 524 (SC); Pepsu RTC v ITO 51 ITR 441. Cf British Broadcasting Corpn v Johns 41 TC 471 (CA).
39. AP State Civil Supplies Corpn v CIT 148 ITR 497.
40. Gujarat Ind Dev Corpn v CIT 151 ITR 255 [reversed in 227 ITR 414 (SC) on another point, but the above proposition was not argued before the SC];
Adityapur Ind Dev Corpn v UOI 262 ITR 289.
41. Vidarbha Housing Board v ITO 92 ITR 430.
42. CIT v Bihar Rajya Pul Nirman Nigam 191 ITR 173.
43. Wadia v CIT 17 ITR 63, 77–78 (FC); Bikram v Prov of Assam 17 ITR 220; Accountant-General v CIT 16 ITR 78. Cf Bishwanath v CIT 10 ITR 322.
44. Bikram v Prov of Assam 17 ITR 220, 229. See section 10(6)(ii).
45. Narendra v Prov of Assam 17 ITR 243.
46. Bikram v Prov of Assam 17 ITR 220, 232.
47. Amrit Kunwar v CIT 14 ITR 561.
48. See under s 195, 'Payments abroad' and under ss 222–23, 'No recovery of Indian tax in foreign countries'.
49. Wadia v CIT 17 ITR 63, 77–78, 110–12 (FC). Decision of SC in CIT v Mir Osman Ali 59 ITR 666 that rulers of Indian states were not legally entitled to
immunity from British Indian taxation prior to integration of their states into the Republic is, it is submitted, incorrect and contrary to invariable
acceptance and recognition of rulers' legal rights and status by British Government throughout the history of Indian Income-tax law, and inconsistent
with the basis on which the case had proceeded up to SC stage. It was followed in Harindar v CIT 83 ITR 197 (SC), CIT v Nawab of Rampur 62 ITR 1 (FB)
and Harindar v CIT 64 ITR 155.
50. See Sudhansusekhar v State of Orissa 41 ITR 743 (SC); CIT v Mir Osman Ali 59 ITR 666 (SC).
51. Umaid Mills v UOI 48 ITR (SC) 186; Associated Stone Inds v UOI 49 ITR (SC) 92; Rajendra v CIT 5 ITR 111; Sudhansusekhar v State of Orissa 41 ITR
743 (SC); ITO v JB Mangharam 53 ITR 638 (SC). Cf CIT v Mir Barkat Ali 97 ITR 246 (SC).
52. Umaid Mills Ltd v UOI 48 ITR (SC) 186.
53. See also Associated Stone Inds v UOI 49 ITR (SC) 92; Shubhlaxmi v UOI 44 ITR 483 (SC); Dalmia v CIT 34 ITR 514 (SC); UOI v Gwalior Rayon 53 ITR
466 (SC); ITO v Mangharam 53 ITR 638 (SC); Lakshminarayan v CIT 58 ITR 457.
54. Probhat v CIT 5 ITC 1 (PC); Yuvarajah of Pithapuram v CIT 17 ITR 445 (PC); Hulas v Prov of Bihar 10 ITR 115, 129 (FC); Ramachandra v Col Ag IT 22
ITR 220.
55. Rai Ramkrishna v State of Bihar 50 ITR 171 (SC); Habib v CIT 15 ITR 132; Netley v ACAgIT 238 ITR 876; Srinivasalu v UOI 239 ITR 282; National
Agricultural v UOI 251 ITR 285, affirmed in 260 ITR 548 (SC); Bhupendra v UOI 259 ITR 58; Calico v Mehta 48 ITR (SC) 154; Narayan v Ishwarlal 57 ITR
149 (SC) (a rule held to share retrospective effect of the section to which it pertained); Distributors (Baroda) v UOI 155 ITR 120, 140–41 (SC); Yadlapati v
State of AP 190 ITR 375 (SC); National Agricultural v UOI 260 ITR 548 (SC) (absence of validating clause may not affect retrospectivity).
56. Sanctus Drugs v UOI 225 ITR 252; Bhupendra v UOI 259 ITR 58.
57. Govinddas v ITO 103 ITR 123 (SC); CED v Merchant 177 ITR 490 (SC); Sharma v ITO 254 ITR 772 (SC); National Agricultural v UOI 260 ITR 548 (SC);
CIT v Varas International P. Ltd . 283 ITR 484 (SC); Gem Granites v CIT 271 ITR 322 (SC), AIR 2005 SC 1455 [LNIND 2004 SC 1175] ; Mohammad v Sabina
179 ITR 442; Jamshedpur Motor v UOI 189 ITR 70; CIT v India Steamship 196 ITR 917; CIT v Mohanlal 204 ITR 234; George v CIT 231 ITR 19 (new Schedule
inserted). Cf Rajagopal Reddy v Padmini 213 ITR 340 (SC); Saurashtra Agencies v UOI 186 ITR 634; CWT v Hira Lal 205 ITR 122; CWT v Man Bahadur 208
ITR 658; CIT v Bachraj 232 ITR 290, 292; CIT v Adyar 252 ITR 129; Dravida v CIT 258 ITR 167; CIT v Kerala Elec 260 ITR 721; CIT v Pooshya 262 ITR 417; CIT
v Synergy Financial Exchange Ltd. 288 ITR 366; Patel B.S. v DCIT 326 ITR 457, (2008) 215 CTR (MP) 333.
58. CIT v A.K. Khosla 327 ITR 406, (2010) 232 CTR (Mad) 204; CIT v Vatika Township P. Ltd . 367 ITR 466, 497 (SC); CIT v Essar Technologies Ltd . 401 ITR
445 (SC).
59. Gulabrai v CWT 198 ITR 131; CIT v National Agricultural 236 ITR 766; S Subash v CIT 248 ITR 512.
60. Allied Motors v CIT 224 ITR 677 (SC) (proviso inserted to remedy unintended consequences must be treated as retrospective); CIT v Podar Cement
226 ITR 625 (SC); UOI v Muthyam 240 ITR 341 (SC); Brij Mohan v CIT 223 ITR 825 (SC); Sir Rama Varma v CIT 205 ITR 433, 440 (SC); Jamshedpur Motor v
UOI 189 ITR 70; CIT v Sri Jagannath 191 ITR 676; CIT v India Steamship 196 ITR 917 (Explanation added retrospectively from a stated date was held to be
deemed to be always in existence); Gangadharappa v Chandrashekhar 196 ITR 277; CIT v Pyarilal Kasam 198 ITR 110; CIT v Mohanlal 204 ITR 234; CWT
v Indira 208 ITR 26; CIT v Chandulal 209 ITR 7; Lucas v CIT 217 ITR 382 (declaratory rule); CIT v Achaldas 217 ITR 799; Laxmi Inds v CIT 231 ITR 514
(Explanation); CIT v Keen Pesticides 237 ITR 545; CIT v God Granites 240 ITR 343; Shenbagam Auto v CIT 241 ITR 112; Janki v CIT 246 ITR 209; S Subash v
CIT 248 ITR 512; CIT v Jodhan 259 ITR 79; Escorts v UOI 199 ITR 43 (SC); Bhagwati v CIT 247 ITR 206 (SC); CIT v Hico Products 247 ITR 797 (SC); ITO v
Manoharlal 236 ITR 357; CIT v Atam 258 ITR 485. Contrast CIT v Patel 215 ITR 165 (SC); Birla Cement v CBDT 248 ITR 216 (SC); CIT v Triple Crown 204 ITR
377; CWT v Varadharaja 250 ITR 523; Manickchand v CIT 190 ITR 336; CIT v Apar Industries Ltd. 323 ITR 411, (2010) 231 CTR (Bom) 313; CIT v Naresh
Kumar 362 ITR 265 (amendment to s 40(a)(ia) should be given retrospective effect).
61. Rural Electrification Corporation Ltd. In re 312 ITR 122 (AAR); CIT v Vatika Township P. Ltd. 367 ITR 466, 490 (SC); CIT v Padampat Singhania 390 ITR
86; Snowtex Investment Ltd. v PCIT 414 ITR 227 (SC).
62. Rampur Finance v CIT 194 ITR 442; Gulabrai v CWT 198 ITR 131; Rasik Ramji v Tripathi 202 ITR 74; CWT v Hira Lal 205 ITR 122; Tity Thomas v TRO
207 ITR 1072; CWT v Man Bahadur 208 ITR 658; CWT v Jyotsana 210 ITR 767; Chandi Ram v ITO 225 ITR 611; Kaushal v UOI 256 ITR 679.
63. Sharma v ITO 254 ITR 772 (SC); National Agricultural v UOI 260 ITR 548 (SC); CIT v Zam Zam Tanners 279 ITR 197, (2005) 197 CTR (All) 221.
64. CIT v Vatika Township P. Ltd. 367 ITR 466, 487 (SC); CIT v Ram Kishan Dass 413 ITR 337, 352-353 (SC).
65. CIT v A.K. Khosla 327 ITR 406, (2010) 232 CTR (Mad) 204.
66. See CIT v Hindustan Electro 243 ITR 48 (SC); DCIT v Ashok Paper 256 ITR 673.
67. See Punjab Business v ITO 188 ITR 550; Engineers Impex v Sharma 244 ITR 247; DCIT v Ashok Paper 256 ITR 673. Cf CIT v Kumudam 242 ITR 159.
68. Rai Ramkrishna v State of Bihar 50 ITR 171 (SC); National Agricultural v UOI 260 ITR 548 (SC); Srinivasalu v UOI 239 ITR 282; Avani Exports v CIT 348
ITR 391.
69. CIT v Hico Products 187 ITR 517, reversed in 247 ITR 797 (SC), but the general observations there-in on retrospective amendments are relevant. See
also Mithilesh Kumari v Prem Bihari 177 ITR 97 (SC), partly approved and partly overruled in Rajagopal Reddy v Padmini 213 ITR 340 (SC).
70. Rai Ramkrishna v State of Bihar 50 ITR 171 (SC).
71. Srinivasalu v UOI 239 ITR 282; Sati Oil v CIT 232 ITR 502, affirmed in DCIT v Ashok Paper 256 ITR 673.
72. Shayara Bano v UOI (2017) 9 SCC 1 , 99.
73. Rai Ramkrishna v State of Bihar 50 ITR 171 (SC); National Agricultural v UOI 260 ITR 548 (SC) (surrounding facts and circumstances must be
considered).
74. Palakol Co-op v ITO 202 ITR 681; CIT v Atam 258 ITR 485.
75. National Agricultural v UOI 260 ITR 548 (SC).
76. Chatturam v CIT 15 ITR 302 (FC); Chhotabhai v UOI AIR 1962 SC 1006 [LNIND 1961 SC 506] (retrospective operation did not violate fundamental
rights). Cf Yadlapati v State of AP 190 ITR 375 (SC).
77. CIT v MP Elec 210 ITR 425; Consolidated Pneumatic v CIT 209 ITR 277.
78. Ritz v UOI 184 ITR 599.
79. National Agricultural v UOI 260 ITR 548 (SC).
80. Netley v ACAgIT 257 ITR 532.
81. Kamakshya v CIT 15 ITR 311, 317 (FC); CIT v Ramgopal 41 ITR 280 (SC); State of UP v Syed 41 ITR 737 (SC); CIT v Straw Products 60 ITR 156 (SC); UOI
v Muthyam 240 ITR 341 (SC); CIT v Indian Telephone Ind 187 ITR 181 (SC); Bennett Coleman v CIT 49 ITR 264; CIT v Mangatram 111 ITR 823; CIT v
Lakshminarayanaswamy 238 ITR 976; CIT v Krishnakumar 254 ITR 31. In Rampur Distillery v CIT 55 ITR 338 and CIT v Devda 109 ITR 484 the
amendment enacted with retrospective effect while the reference or reference application was pending, was erroneously disregarded. CIT v Devda was
dissented from in CIT v Kamla 189 ITR 359, but the appeal against Devda was dismissed by SC in 187 ITR 546 on a different ground without going into
the correctness of the judgment.
82. CIT v Kamla 189 ITR 359; CIT v Shah Elec 207 ITR 350.
83. CIT v National Agricultural 246 ITR 486 (SC); CIT v Raza Buland 202 ITR 191; CIT v Kaziamunnisa 213 ITR 172; CIT v Busappa 243 ITR 853 (SC); CIT v
Shah Elec 207 ITR 350.
1. CIT v May and Baker 192 ITR 239; CIT v Empire 192 ITR 245.
2. CIT v Govindaraja 187 ITR 417, CIT v Janardhanan 189 ITR 165 and CIT v Reddiar 205 ITR 412 (s 43B); CIT v Dharampur Sugar 220 ITR 671; CIT v
Taraporvala 239 ITR 319; CIT v Ajanta 246 ITR 548; CIT v Gill 248 ITR 362; Freeze King v CIT 252 ITR 583. Contrast CIT v Empire 210 ITR 267 (effect of
retrospective amendment considered by tribunal).
3. CIT v Hindustan Electro 243 ITR 48 (SC); CIT v Satish 247 ITR 119. See also Bharat Conductors v CIT 238 ITR 89; Chinappa v State of Karnataka 240
ITR 837 (opportunity to file a fresh return).
4. CIT v Navajbai 35 ITR 793.
5. Venkatachalam v Bombay Dyeing 34 ITR 143 (SC).
6. Ranjan v CBDT 232 ITR 76; Goswami v UOI 250 ITR 359; AS Const v UOI 252 ITR 182.
7. Cawasji v State of Mysore 150 ITR 648 (SC); Lohia v UOI 152 ITR 308, 376-87 (SC); Katira Construction Ltd. v UOI 352 ITR 513; Manan Corporation v
ACIT 356 ITR 44.
8. Sees 295(4).
9. BEN JURATOWITCH, Retroactivity and Common Law 5 (Hart Publishing, Oxford and Portland, Oregon 2008); Charles Sampford, Retrospectivity and
the rule of law 21 (Oxford University Press 2009); Elmer A. Driedger, Statutes: Retroactive Retrospective Reflections, 56 Can. Bar Rev 264, 268 (1978); J.
Paul Salembier, Understanding Retroactivity: When the Past Just Ain't What It Used to Be, 33 Hong Kong L.J. 99 (2003).
10. See UOI v Raghubir Singh 178 ITR 548 (SC); CIT v Garware 205 ITR 426 (SC).
11. Govinddas v ITO 103 ITR 123, 132 (SC); Mithilesh Kumari v Prem Bihari 177 ITR 97 (SC), partly approved and partly overruled in Rajagopal Reddy v
Padmini 213 ITR 340 (SC); CWT v Niranjan 173 ITR 693. See also Maxwell, Interpretation of Statutes, 12th edn, p 216; CIT v Ramkumar 122 ITR 322.
12. Per MacKenna J, Regina v General Comrs of IT 40 TC 225, 228.
13. Govinddas v ITO 103 ITR 123, 132 (SC); CED v Merchant 177 ITR 490 (SC); ITO v Uppala 64 ITR 93; Arvind Mafatlal v Balakrishnan 67 ITR 449;
Rajagopal Reddy v Padmini 213 ITR 340 (SC); Sharma v ITO 254 ITR 772 (SC).
14. Inder Singh v ITO 72 ITR 349; Manikchand v ITO 78 ITR 204; Agarwal v ITO 79 ITR 101; Rajgharia v ITO 98 ITR 486, 494.
15. Prashar v Vasantsen Dwarkadas 49 ITR 1 (SC).
16. CIT v Lakhmir Singh 49 ITR (SC) 70; CIT v Mohammed Hussain 49 ITR (SC) 80; Godbole v Jagannath 49 ITR (SC) 88.
17. Disapproving, at p 768, CIT v Ishardass 44 ITR 629.
18. It is submitted that—(a) Sarkar J, while accepting the principle, erroneously held on construction of amending statutes that they provided for
complete retrospective operation so as to authorise assessment which was barred before amendment; (b) observations of Hidayatullah and Raghubar
Dayal JJ in those cases, dissenting from this principle, are erroneous; and (c) judgments of SK Das and Kapur JJ are correct both in enunciation of the
principle and in its application to relevant statutory provisions.
19. Gadgil v Lal 53 ITR 231; Jani v Induprasad 72 ITR 595; CIT v Onkarmal 93 ITR 233.
20. Ahmedabad Calico v Mehta 48 ITR (SC) 154; Niranjanlal v CIT 23 ITR 131; Bhatia v Shah 156 ITR 474 (SC). See further CIT v Arbuda 231 ITR 50 (SC);
CIT v International Computers 187 ITR 580; CIT v Godavari Sugar 198 ITR 196; Punjab State CSC v CIT 200 ITR 536; CIT v Rangaiah 230 ITR 385; CIT v
Maqbool 231 ITR 77; Duncan Agro v ITO 249 ITR 253; CIT v Avinash 251 ITR 360 and CIT v Jodhpur Diesels 259 ITR 92 (effect of retrospective amendment
to s 263).
21. Delhi Cloth & General Mills Ltd v CIT 2 ITC 439, 443.
22. CWT v Niranjan 173 ITR 693; Gulabrai v CWT 198 ITR 131, 136–37.
23. CIT v Kerala Transport 242 ITR 263 (a right of appeal is a substantive right, not merely a matter of procedure). CBDT v Malhotra 128 ITR 543 [s
288(4)]; CIT v Adyar 252 ITR 129. Cf Rajagopal Reddy v Padmini 213 ITR 340 (SC).
24. Kamakshya v State of Bihar 46 ITR 516; CIT v Bengal Cardboard 176 ITR 193 [s 249 (4)]; CIT v Kerala Transport 242 ITR 263; CP Syndicate v CIT 45
ITR 6 (right of reference). Cf Hukumchand v State of MP 52 ITR 583 (SC).
25. Re Govindram 11 ITR 104.
26. ITO v Ponnoose 75 ITR 174 (SC); Chandicharan v TRO 68 ITR 721; CIT v Mirza 202 ITR 291; Seksaria Biswan v IAC 184 ITR 123; CWT v Kerala SRTC
164 ITR 737. Cf Narayan Row v Ishwarlal 57 ITR 149 (SC) (rule framed subsequently held to be retrospective); CIT v Bazar 172 ITR 321 (SC); Director of
Tax Credit v National 86 ITR 219, affirmed National v Director of Tax Credit 107 ITR 916 (SC), (concession validly granted with retrospective effect);
proviso to s 2(17)(iv); and third proviso to s 35(l)(iv). See also ante under 'Rules and notifications'. See further CIT v God Granites 240 ITR 343; Pati v ITO
240 ITR 727.
27. CIT v Mirza 202 ITR 291; Seksaria Biswan v IAC 184 ITR 123.
28. CWT v Sharvan Kumar 210 ITR 886 (SC), followed by SC in Gaj Singh v Settlement Commission 247 ITR 586; CWT v Vidyavathi 150 ITR 319; CWT v
Kasturbhai 164 ITR 107 (rule-making authority need not expressly state that procedural rule applies retrospectively); Manjushree v CWT 171 ITR 348;
CWT v Tandon 195 ITR 688; CWT v Man Bahadur 208 ITR 658; CWT v David 214 ITR 19; CWT v Hira Lal 235 ITR 561. Contrast CIT v Assam Frontier 224
ITR 398, impliedly overruled in Aravinda v CIT 237 ITR 284 (SC) but affirmed in 253 ITR 549 (SC).
29. Tata Consultancy v UOI 257 ITR 710; Tata Workers v UOI 256 ITR 725; CIT v Sakthi Sugars 251 ITR 166; Sree Karpagambal v CIT 238 ITR 842; Agro v
CIT 236 ITR 1000; CIT v National Agricultural 236 ITR 766; CIT v KN Oil Inds 226 ITR 547; CIT v Palaniswamy 219 ITR 380; CIT v Ronald 215 ITR 638; CIT v
Bishnauth 197 ITR 150; Seksaria Biswan v IAC 184 ITR 123; CWT v Kerala SRTC 164 ITR 737; Chatturam v CIT 15 ITR 302(FC) and 14 ITR 695.
30. CIT v Vijayawada Bottling Co. Ltd. 356 ITR 625.
31. CIT v Agriculture Market Committee 337 ITR 299; Brij Mohan v CIT 120 ITR 1 (SC).
32. Duke of Westminster v IR 19 TC 490, 511, 520 (HL); Levene v IR 13 TC 486, 501–02 (HL); IR v Fisher 10 TC 302, 336, 340 (HL); Jiyajeerao v CIT 34 ITR
888, 897 (SC); CIT v Parthasarathy 121 ITR 97, 108 (FB), on appeal 236 ITR 350 (SC); Raghbir Singh v CIT 34 ITR 719; Ayrshire v IR 14 TC 754, 763–64; Wild
v King 24 TC 86, 91; CIT v Elder 25 ITR 150; CIT v Madras Rly 11 ITR 380, 388; Re Central Talkies 9 ITR 44, 51; CIT v Abhayananda Rath 255 ITR 436.
33. Per Jagadisan J, Aruna v State of Madras 55 ITR 642, 648. Cf Viscount Simon LC in Latilla v IR 11 ITR Suppl 78, 79 (HL); and Greene MR in Howard v
IR 25 TC 121, 134, 10 ITR Suppl 90 (CA).
34. CIT v Abhayananda Rath 255 ITR 436.
35. IR v Wesleyan Society 16 ITR Suppl 101, 104 (HL); Provident Inv v CIT 24 ITR 33, affirmed 32 ITR 190 (SC).
36. Duke of Westminster v IR 19 TC 490, 520, 524; Barr, Crombie v IR 15 ITR Suppl 56, 62; Craddock v Zevon TC 267, 279-80 (HL); Bradbury v Arnold 37
TC 665, 669.
37. Privy Council in Bank of Chettinad Ltd v CIT 8 ITR 522, 526, followed in Chockalingam v CIT 9 ITR 278 and Captain v CIT 36 ITR 84, 91.
38. CIT v Keshavlal Patel 55 ITR 637, 642, followed in Kamala v CIT 114 ITR 159.
39. CIT v Motors & General Stores Ltd 66 ITR 692, 699–700.
40. CIT v Kharwar 72 ITR 603, followed in Lakshmikanta v CIT 75 ITR 790 (SC) and CIT v Gillanders 87 ITR 407, 418 (SC).
41. Vodafone, ibid, p. 58.
42. Avasarala Automation Ltd. v JCIT 266 ITR 178, (2004) 1 KCC RSN 17.
43. First Leasing Co. of India Ltd. v JCIT 356 ITR 128.
44. Vodafone, ibid, p. 58.
45. CIT v Raman & Co. 67 ITR 11, 17 (SC).
46. McDowell v CTO 154 ITR 148 followed in Workmen v Associated Rubber Ind 157 ITR 77 (SC), Neroth v CIT 166 ITR 418 and CIT v Minal 167 ITR 507.
47. Ramsay v IR 54 TC 101.
48. IR v Burma Oil 54 TC 200.
49. Furniss v Dawson 55 TC 324.
50. Furniss v Dawson 55 TC 324, 389.
51. Ramsay v IR 54 TC 101, 183–84, 189, 197; IR v Burma Oil 54 TC 200, 214; Furniss v Dawson 55 TC 324, 388–89.
52. IR v Burma Oil 54 TC 200, 221.
53. Ramsay v IR 54 TC 101, 192; Furniss v Dawson 55 TC 324, 392.
54. Ramsay v IR 54 TC 101, 193.
55. Ramsay v IR 54 TC 101, 197.
56. Ramsay v IR 54 TC 101, 18–88; IR v Burma Oil 54 TC 200, 220; Furniss v Dawson 55 TC 324, 401.
57. Ramsay v IR 54 TC 101, 184; IR v Burma Oil 54 TC 200, 220; Furniss v Dawson 55 TC 324, 389, 391.
58. Ramsay v IR 54 TC 101, 185.
59. Newstead v Frost 53 TC 525.
60. Craven v White [1988] STC 476 .
61. Ramsay v IR 54 TC 101, 198; IR v Burma Oil 54 TC 200, 214; Furniss v Dawson 55 TC 324, 392.
62. IRC v Plummer (1980) AC 896 and Chinn v Hochstrasser (1981) 2 WLR 14 .
63. CWT v Arvind Narottam 173 ITR 479.
64. UOI v Playworld Electronics 184 ITR 308, 318.
65. CWT v Arvind 173 ITR 479, 486–87 (SC).
66. Valliappan v ITO 170 ITR 238, 280–86.
67. Banyan and Berry v CIT 222 ITR 831, 850.
68. Macniven v Westmoreland Investment Ltd 255 ITR 612.
69. Duke of Westminster v IR 19 TC 490.
70. Re Indo Continental Hotels and Resorts Ltd 185 ITR 38; CIT v Sairabanu 203 ITR 145; CIT v Joytsna Poddar 232 ITR 759; CIT v Bhagat Ram 252 ITR
741; CGT v Dipak 254 ITR 235; CIT v Abhinandan 254 ITR 538; CIT v Atul Products 255 ITR 85; CGT v Satya Nand 256 ITR 516.
71. UOI v Azadi Bachao Andolan 263 ITR 706 (SC).
72. CIT v Raman & Co. 67 ITR 11.
73. Banyan and Berry v CIT 222 ITR 831.
74. Valliappan v ITO 170 ITR 238.
75. CIT v Akshay Textiles and Trading Agencies P. Ltd. 304 ITR 401, (2008) 214 CTR (Bom) 316.
76. CIT v Porrits and Spencer Ltd. 329 ITR 222, (2010) 231 CTR (P&H) 294.
77. Hela Holdings Pvt. Ltd. v CIT 263 ITR 129, 138, (2003) 185 CTR (Cal) 245.
78. McDowell and Company Ltd. v CTO 154 ITR 148 (SC).
79. UOI v Achadi Bachao Andolan 263 ITR 706, pp. 755-762 (SC).
80. Vodafone, Ibid, p. 34.
81. Mathuram Agrawal v State of Madhya Pradesh (1999) 8 SCC 667 [LNIND 1999 SC 982] .
82. Vodafone, Ibid, p. 94-99.

83. Vodafone, Ibid, p. 105-108.
84. Mc Dowell and Company Ltd. v CTO 154 ITR 148, 171.
85. IRC v Duke of Westminster [1936] AC 1 .
86. See Henriksen v Grafton Hotels [1942] 2 KB 184 (CA); Latilla v IRC [1943] AC 377 (HL); Snook v West Riding Investment [1967] 2 QB 786 (CA, esp
Diplock L J); Mangin v IRC [1971] AC 739 (PC (NZ)); Floor v Davis [1978] Ch 295 (CA); [1980] AC 695 (HL); IRC v Plummer [1980] AC 896 (HL); Chinn v
Hochstrasser [1981] AC 533 ; Ramsay v IRC [1982] AC 300 ; IRC v Burmah Oil Co Ltd [1982] SC (HL) 114 ; Furniss v Dawson [1984] AC 474 (HL, esp Lord
Brightman); Craven v White [1989] AC 398 ; MacNiven v Westmoreland Investments Ltd [2003] 1 AC 311 (HL, esp Lord Hoffmann); Barclays Mercantile
Business Finance v Mawson [2005] 1 AC 684 (HL); IRC v Scottish Provident Institution [2004] 1 WLR 3172 (HL); Carreras Group v The Stamp
Commissioner [2004] UKPC 16 (PC (Jamaica)); Astall v HMRC [2009] EWCA Civ 1010 (CA) and Tower MCashback LLP v Revenue and Customs
Commissioners [2011] UKSC 19 .
87. 142 ITR (St.) 11; McDermott v UOI 173 ITR 155; CIT v Ronald 215 ITR 638; CIT v Brown & Root Int. Inc. 202 CTR 533
88. McDermott v UOI 173 ITR 155.
89. 176 ITR (St.) 222; Balchand v State of Sikkim 180 ITR 530; Choudhury v UOI 186 ITR 329, Kanchenjunga Properties v State of Sikkim 191 ITR 575 and
Anjan v UOI 207 ITR 130 (income accruing in Sikkim).

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Kanga & Palkhivala: The Law and Practice of Income Tax 11th ed / Kanga & Palkhivala: The Law

THE INCOME-TAX ACT, 1961

(2) It extends to the whole of India.

1. The Old Act and the New Act.—

2. History of Income-tax Act.—

3. Direct Taxes Code, 2012.—

direct tax law s… "3.

4. New Tax Legislation: Code and Task Force.—

THE INCOME-TAX ACT AND THE CONSTITUTION OF INDIA

6. Constitutional validity of provisions.—

(b) Fundamental Rights.—

(c) Doctrine of Reading Down.—

7. Constitutional Remedies and Writs.—

(b) Articles 32 and 226.—

i. has an adequate alternate remedy,

iv. if the case involves disputed question of facts,32.

(iv) Quo Warranto.—

(v) Habeas Corpus.—

(c) Discretionary Power: Not a Bar – Alternative Efficacious Remedy.—

(ii) Binding Orders.—

(iii) Lack of Jurisdiction.—

(iv) Show-cause Notice.—

(i) it must be adequate;62. and

(v) Writ Admitted.—

(d) Delay or laches.—

(e) Locus Standi.—

(f) Supervisory Jurisdiction of High Courts.—

9. The Rule of Literal Interpretation.—

10. The Rule of Strict Interpretation.—

(b) Mischief Rule.—

(c) Updating Construction.—

(d) Reference to Other Statutes.—

12. Interpretation of the Incometax Act.—

13. Harmonious Construction.—

14. Principle of Beneficial Interpretation.—

15. Case Governed by more than One Provision.—

terms of the first proviso to s 48.10.

16. Principles of Natural Justice.—

17. Casus Omissus.—

18. Doctrine of Contemporanea Expositio.—

19. Provision whether Mandatory or Directory.—

20. Amendments, Omissions and Repeals.—

(b) Omissions and Repeals.—

INTERPRETATION OF CERTAIN SPECIFIC PROVISIONS

22. Machinery or Procedural Provisions.—

23. Limitation Provisions.—

24. Penal Provisions.—

25. Deeming Provisions and Legal Fictions.—

26. Legal Presumption.—

27. Appeal and Refund Provisions.—

28. Provisions Creating a Right.—

rather than the one which defeats it.90.

29. Provisions for Deduction, Exemption, Incentives, Benefits or Relief.—

EXTERNAL AIDS TO CONSTRUCTION

31. Circulars, Forms and Interpretation by the Income-tax Authorities.—

32. Speech of a Minister or other Parliamentary Material.—

33. Previous Judicial Interpretation or Legislation.—

34. Provisions of other Statutes and Subsequent Enactments.—

35. Dictionary Meaning.—

INTERNAL AIDS TO CONSTRUCTION

(1) qualifying or excepting certain provisions from the main enactment;

(a) to explain the meaning and intendment of the Act itself,

38. Non Obstante Clauses.—

39. Marginal Notes and Headings.—