LexCOMMISSIONER OF INCOME TAX - ILL versus M/S.CALCUTTA KNITWEARS, LUDHIANA
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[2014] 5 S.C.R. 855 COMMISSIONER OF INCOME TAX - Ill v. MIS.CALCUTTA KNITWEARS, LUDHIANA (Civil Appeal No. 3958 OF 2014 etc) MARCH 12, 2014 [H.L. DAITU AND S.A. BOBDE, JJ.] A ,8 Income Tax Act, 1961 - Chapter XIV-8, ss.15880 and 158BE(2)(b) - Recording of satisfaction notes for issuing notice under s. 15880 - At what stage of proceedings under C Chapter XIV-8, the assessing authority to record such satisfaction note - ~he High Court opined that it could- .only be prepared. durif?g the course of the assessment proceedings u/s. 158BC and not after completion of the proceedings, in view of the limitation period prescribed uls. 158BE(2)(b) - Held: A reading of s. 15880 indicates that the satisfaction note could be prepared by the assessing officer either at the time of initiating proceedings for completion of assessment of a searched person u/s. 158BC or during the stage of the assessment proceedings - But, it does not mean that satisfaction note cannot be prepared after completion of the assessment - The language of the provision is clear and unambiguous - Legislature has not imposed any embargo on the Assessing' Officer in respect of the stage of the proceedings during which the satisfaction is to be reached - s. 158BE(2)(b) only provides for the period of limitation for completion of block assessment uls. 15880 -. It neither provides for nor imposes any restrictions or conditions on the period of limitation for preparation of the satisfaction note ul D E F s. 15880 and consequent issuance thereof - Reasoning of G the High Court is contrary to the plain and simple language employed by the legislature u/s. 15880 which provides adequate flexibility to the Assessing Officer for recor.cJing the satisfaction - The satisfaction· note could be prepared either 855 H 856 SUPREME COURT REPORTS [2014] 5 S.C.R. A (a) at the time of or along with the initiation of proceedings against the searched person under Section 158BC; (b} along with the assessment proceedings under $ection 158BC; (c) immediately after the assessment proceedings are completed under Section 15BBC of the 'searched person - The matters B are remanded to the respective High Courts for deciding 'the matters afresh in the light of the above-mentioned obse1vations on the scope and interpretation of s. 158 BO. Interpretation of Statutes - Interpretation of fiscal legislation - Literal rule or rule of strict interpretation - Held: C The foremost principle of interpretation of fiscal statutes is the rule of strict interpretation i.e. to follow the literal rule - The courts while interpreting provisions of fiscal legislation should neither add nor subtract a word from the provisions of instant meaning of the section - Departure from the literal rule would D lead to free play to each Judge to put his own interpretation which would be destructive of the edifice of the fiscal legislations - In taxing statutes, even if the literal inte1pretation results in hardship or inconvenience, it has to be followed - The language of a taxing statute should E ordinarily be read and understood in the sense in which it is harmonious with the object of the statute to effectuate the legislative animation - A common sense approach, equity, logic, ethics and morality have no role to play while interpreting a taxing statute. F CIT v. Keshab Chandra Manda/ AIR 1950 SC 265: 1950 SCR 435; Pandian Chemicals Ltd. v. C. I. T. .2003(5) SCC 590; Narsiruddin v. Sita Ram Agarwal AIR 2003 SC 1543: 2003 (1) SCR 634; Bhaiji v. Sub-Divisional Officer, Th and/a G 2003(1) SCC 692: 2002 (5) Suppl. SCR 116; J.P. Bansal v. State of Rajasthan and Anr. AIR 2003 SC 1405; State of Jharkhand and Anr. v. Govind Singh JT 2004(10) SC 349; Jinia Keotin v. K. S. Manjhi 2003 (1-) SCC 730: 2002 (5) Suppl. SCR 689; Shiv Shakti Co-operative Housing Society H v. Swaraj Developers AIR 2003 SC 2434: 2003 (3) SCR 762; COMMISSIONER OF INCOME TAX - Ill v. CALCUTTA 857 KNITWEARS, LUDHIANA Grasim Industries Limited v. Collector of Customs 2002 (4) A SCC 297: 2002 (2) SCR 945; Union of India v. Hamsoli Devi 2002 (7) SCC 273: 2002 (2) Suppl. SCR 324; Prakash Nath Khanna v. C.I. T. 2004 (9) SCC 686: 2004 (2 ) SCR 434; Delhi Financial Corporation v. Rajiv Anand 2004 (11) SCC 625; Government of Andhra Pradesh v. Road B Rollers Owners Welfare Association 2004(6) SCC 210; B. Premanand and Ors. v. Mohan Koikal and Ors. (2011) 4 SCC 266: 2011 (3) SCR 9
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