Income Tax Appellate Tribunal - Delhi
Jai Pal Sharma vs Income-Tax Officer on 20 April, 1999
Equivalent citations: [2000]72ITD485(DELHI)
ORDER
Shri Phool Singh, J.M.
1. These two appeals of the assessee involve common grounds that is why both the appeals were heard together and are being disposed of by this composite order for the sake of convenience.
2. Relevant facts as noted by authorities below are that the assessee who was a Government servant, opened account No. NSS-236 with Parliament Street, Post Office, New Delhi, under National Savings Scheme, 1987 on 29-2-1988. He deposited Rs. 20,000, Rs. 30,000 and Rs. 24,000 in the said account during financial years 1987-88, 1988-89 and 1989-90 respectively. He claimed the amount of deposits as deductions under section 80CCA of Income-tax Act, 1961 (hereinafter referred to as the Act) while computing the net taxable income for assessment years 1988-89, 1989-90 and 1990-91 respectively. The appellant withdrew Rs. 20,000 on 15-4-1991 the amount deposited by him during financial year 1987-88. While filing the return of income for assessment year 1992-93, the assessee had shown Rs. 20,000 so withdrawn out of NSS account in the statement of total income but it was claimed that the said account be excluded while determining the total income chargeable to tax as the same amount is not in the nature of income. It was also mentioned that same had been shown in the statement of income to avoid levy of penalty/additional tax under section 143 (1A) of the Act. The Assessing Officer did not exclude the said amount while determining the total income and levied tax thereon and also charged interest under sections 234B and 234C of the Act, vide intimation under section 143(1)(a) of the Act. The assessee moved an application under section 154 dated 5-4-1994 and requested the Assessing Officer (hereinafter referred to as Assessing Officer) to delete the said amount of Rs. 20,000 from the total income and detailed reasons were also given for that but Assessing Officer rejected the application of the assessee vide order dated 24-8-1994 on the ground that provisions of section 80CCA, were quite specific and the amount of such withdrawal from NSS account is to be treated as income. The assessee came in appeal before CIT(A) and had taken up the same plea through written submissions as were taken before Assessing Officer but CIT(A) vide order dated 20-11-1995 dismissed the appeal after observing that similar appeal of the assessee for assessment year 1993-94 had been dismissed on the ground that provisions of section 80CCA(2) were specific and amount withdrawn under that provisions shall be treated as income. The assessee is in appeal against that order before us.
3. Facts involving assessment year 1993-94 are identical except that CIT(A) decided that appeal vide order dated 12-9-1995 prior to the appeal of the assessee for assessment year 1992-93 but reasoning given by CIT(A) were identical to the fact that amount of withdrawal made by assessee under section 80CCA(2)(b) is to be treated as income of the assessee of that previous year in which such withdrawal was made and appeal was dismissed against which assessee is in appeal.
4. The assessee who is said to be retired Commissioner of Income-tax department appeared in person to argue his case and he has submitted written submissions before CIT(A) and before us and placed heavy reliance on those written submissions. The argument of the assessee is basically two-fold. First, the withdrawal of the deposit made by assessee from the NSS account is receipt of capital nature and not in the nature of income and Legislature in its wisdom has not included such receipt of capital nature in the definition of 'income' as given under section 2(24) of the Act and thus, the said amount cannot be treated as income. Second contention of the assessee is that sections 4 to 9 of the Act are charging sections and section 5 provides the definition of total income and withdrawal by the assessee from NSS account being receipt of capital nature and not included in the definition of income cannot be included in the total income and the same does not fall under any of the charging section and for lack of charging section, there is no provision of the Act in which said receipt may be assessed. In the same connection, it was also submitted that there is no specific head under which such receipt of capital nature can be brought in.
5. Elaborating the argument, the assessee submitted that it is well-settled law that receipt of a capital nature or the refund of the deposit or investment by a person is not in the nature of income and as such not to be included in the total income. It was also submitted that all receipts of payments do not necessarily bear the income character. Relying upon the decision of Hon'ble Supreme Court in the case of National Cement Mines Industries Ltd. v. CIT [1961] 42 ITR 69 wherein it has been laid down that unless the receipt falls within the definition of income under section 2(24), it does not change the character. It was submitted by the assessee that withdrawal of the deposit from the NSS account would continue to be of the same character i.e., capital unless the same is specifically brought within the definition of income under section 2(24). It was also the case of the assessee that distinction between capital receipt and revenue receipt though fine, is real. There are certain broad principles which guide to determine the character of receipt as laid down by Apex Court in the case of National Cement Mines Industries Ltd. (supra). The assessee's case is that wherever Legislature intended to tax capital and non-revenue receipts, the specific provisions have been made by bringing such capital and non-revenue receipts within the definition of income under section 2(24) of the act. The assessee submitted that such incorporation under the definition of 'income' had been made even retrospectively as in the case of duty drawback, cash assistance etc. as per Finance Act, 1990 by which definition of income was widened by adding sub-clauses V (a) to V (d) of sub-section 2(24). It was also submitted that winning by way of lotteries and racing etc. were brought within the definition of income by inserting clause (ix) to section 2(24). On the basis of above, it was the contention of the assessee that whenever are rececipt, more so of capital nature, is intended to be brought within the scope of taxable income, the scope of the definition of income have been enlarged. It was the case of the assessee that in case Legislature had intended to include all withdrawals from NSS account in the taxable income, it would have included the same in the definition of income under section 2(24) as same was done in the case of Annuity deposit under Chapter XXII(A). Annuity deposit made was deductible under section 280(1) from the total income and re-payment was deemed to be the income under section 280D. But still to bring such deemed income for tax, the re-payment was obtained by the assessee was brought within the definition of income under section 2(24) of the Act by inserting clause VIII but nothing has been done in the case of 80CCA. The plea of the assessee is that non-action on the part of Legislature to bring corresponding provision to include such withdrawals from NSS account in the definition of income under section 2(24) of the Act will be fatal and such withdrawals cannot be treated as income. Here Legislature failed to bring necessary amendment in section 2(24) of the Act and for want of it, receipt of the amount obtained by the assessee from withdrawals of NSS account cannot fall within the definition of income under section 2(24). The assessee had placed reliance on the decision of Hon'ble Supreme Court in the case of Smt. Hira Devi v. District Board AIR 1952 SC 362 in which Government was required to amend sections 71 and 90 of UP District Board Act but section 71 alone was amended and their Lordships observed that Legislature forgot to amend section 90 in conformity with the amendment of section 71 and it is not the duty of the Court to fill in gaps or omissions in the provision of an Act and action of the authorities was struck down. The contention is that Legislature has failed to bring out the necessary addition in the definition of 'income' by bringing withdrawals from NSS account into that definition as done in the case of Annuity scheme and in other cases of receipt of capital nature and thus, such withdrawals cannot be taken in the definition of income and not chargeable to tax.
6. The other part of the argument of the assessee is that a receipt can only be treated as income if the same falls within the scope of the charging section. Reference to the latest decision of the Hon'ble Supreme Court in the case of Union of India v. A. Sanyasi Rao [1996] 219 ITR 330/85 Taxman 321 was made in which their lordships have observed that sections 4 to 9 of the Act are the charging sections on the basis of which the income can be assessed for income tax. Section 80CCA falls within Chapter VI-A which was not a charging section. He further invited our attention to provisions of section 4 of the Act which provides that income tax shall be charged on total income of the previous year. Further, section 5 lays down the scope of the total income to include all income from whatever source derived. The assessee further invited our attention to the definition of 'total income' which is defined under section 2(45) which again mean the total amount of income referred to in section 5. According to assessee, the receipt which falls within the scope of the definition of income can only be chargeable to tax. Our attention was drawn to the decision of Hon'ble Supreme Court in the case of CIT v. Harprasad & Co. (P.) Ltd. [1975] 99 ITR 118 in which their Lordships have opined that income in order to come within the purview of definition of total income must satisfy two conditions. Firstly, it must comprise total amount of income. Secondly it must be computed in the manner laid down in the Act. It was also hell that if either of the these two conditions fails, the income will not be part of the total income that can be brought to charge. On the basis of above, the assessee tried to build the argument that sub-section 2 of section 80CCA does not indicate specific head of the income under which the deemed income is to be classified for the purpose of computation. Nor the said income is covered by the definition of total income. Further, the assessee submitted that income is to be computed under various heads of income as laid down in section 14 of Chapter IV. Their Lordships in the case of Nalinikant Ambalal Mody v. S. A. L. Narayan Row, CIT [1966] 61 ITR 428 (SC) have laid down that income has to be brought under any one of the heads of income and can be charged to tax only if it is so chargeable under the computing section corresponding to that head. The assessee submitted further that Revenue can take shelter under section 56 which provides the residuary head 'income from other sources' but revenue cannot succeed because this section starts with the words 'income of every kind'.
Sub-section 2 provides for specific types of income including the ones specified in section 2(24). Accordingly, the receipt which is to be charged under section 56 of the Act must be in the nature of income before it can fall within the scope of this section. As the receipt of amount from withdrawal of deposit from NSS account does not fall within the scope of word 'income', the same will not be covered by section 56(1) of the Act. The assessee also pointed out that Hon'ble Supreme Court in the case of Nalinikant Ambalal Mody (supra) have also observed that if income does not fall under one head it cannot be computed thereunder, it cannot be taxed even if it may be included in the total income as the amount of withdrawal form NSS account is not covered under the definition of income, it may form part of total income of the assessee but the same is not chargeable under section 56(1) or any other head and thus, the same cannot be taxable. In the same connection, reliance was also placed on the decision of Apex Court in the case of Universal Radiators v. CIT [1993] 201 ITR 800/68 Taxman 45 in which their Lordships have laid down as under :-
"Exigibility to tax is not the same as liability to pay tax, the former depends on the charge created by the Act and the latter on computation in accordance with the provisions in the Act and Rules."
On the basis of which it was submitted that the Act failed in enacting chargeability of the amount and bringing the above withdrawal from NSS account within the definition of income and if the words of taxing statute fail, then so must the tax. The Courts cannot help the draftsmen by a favourable construction as laid down in the case of CIT v. Elphinstone Spg. & Wvg. Mills Co. Ltd. [1960] 40 ITR 142 (SC).
7. Further plea from the side of assessee is that at present existing position of section 80CCA indicates that it stopped deeming the withdrawal of deposit which was in the nature of investment, as income but reference to chargeability to tax is clearly beyond its scope since it neither falls in Chapter IV containing the sections dealing with the computation of income as is the case of sections 59 and 41 nor incorporated in the scope of income under section 2(24). On the basis of above, the contention was that in case the amount is not covered within four corners of taxation statute, no tax can be imposed by inference or analogy or by trying to probe into the intention of Legislature and by considering what was the substance of the matter as laid down in the case of CIT v. Provident Investment Co. Ltd. [1957] 32 ITR 190 by Apex Court.
8. The assessee also tried to meet plea of Revenue that deduction under section 80CCA in earlier assessment year would itself be sufficient to charge with drawal of deposit as income of the said year by submitting that the amount of deduction deposited under section 80CCA was already a part of total income of earlier year and as such the same cannot form part of the total income in subsequent year. Rectification is one of the course left open for Legislature as done in the provision of section 155 and under section 41(1) but the same were brought specifically within the definition of income under section 2(24) but nothing of that nature is done in the case of such withdrawal of NSS account and thus, said preposition cannot be allowed to prevail.
9. The last plea of the assessee is that amount of deposit withdrawn during year form part of the total income of the earlier year and computed so in the earlier year and the same cannot fall within the natural scope of the word 'income' in a subsequent year nor the same can be brought to charge in two assessment years as earlier it stood charged and cannot be charged again by Assessing Officer as done in the case in hand without bringing amendment to section 2(24). In the end, reliance was placed on the decision of Apex Court in the case of CIT v. India Discount Co. Ltd. [1970] 75 ITR 191 which was reiterated in Kedarnath Jute Mfg. Co. Ltd v. CIT [1971] 82 ITR 363 in which it was laid down that a receipt which in law cannot be regarded as income cannot become so merely because the assessee erroneously credited it to the P&L account and on the basis of which it was submitted that mere showing by the assessee in statement of account, the same cannot be treated as income.
10. The sum and substance of the argument of the assessee was that action of Assessing Officer to treat the withdrawal from NSS account as income was prima facie illegal and without support of any provisions of the Act and he was not justified in computing the same without specific head of the charge.
11. Ld. DR, as against it, argued that authorities below were justified in taxing the amount of withdrawal from NSS account. Meeting out the first argument of the assessee, the ld. DR submitted that definition of 'income' under section 2(24) of the Act is not exhaustive. It starts with the words : 2(24) : 'income' includes :-
(i) .........
(ii) .........
According to ld. DR, the different sub-clauses of section 2(24) gives the different types of amounts which have been brought into the definition of income by the Legislature but this definition is to be read with the opening words of section 2 itself which provides definitions of different words used in the Act but with the rider which reads as under :-
Section 2 : In this Act unless the context otherwise requires......
12. According to ld. DR, the words 'unless the context otherwise requires' are significant and provision of section 80CCA are to be read in the above context. Provision of section 80CCA brought on the statute have to be read as a whole. Section 80CCA(1) provides deposit of any amount in accordance with the scheme of NSS by any assessee and sub-section 2 provides that whenever any amount which has been allowed as deduction under sub-section 1, is withdrawn in any previous year the same shall be deemed to be the income of the assessee of that previous year and shall be chargeable to tax as the income of that previous year. Reliance was placed on these specific provisions and contention is that sub-section 2 of section 80CCA created a fiction giving out a definition of income in respect of the amount so withdrawn by the assessee from deposit from NSS account and that sub-section also provides chargeability of such amount to tax. The ld. DR questioned as to what more was required for the Legislature as withdrawal is defined as deemed income of the assessee and chargeability to tax is also provided. The ld. DR pointed out that definition of income as provided under section 2(24) cannot be read in exclusion of the above interpretation as for section 80CCA, Legislature in its wisdom, has provided definition of income for such withdrawal of NSS account and chargeability of such income for tax. In this context, ld. DR also invited our attention that mechanical application of definitions cannot be applied without looking to the fiscal intention of the Legislature. Here, if intention of the Legislature is to be viewed, then it will be quite clear that Legislature had allowed the assessee relief in a particular year about the amount to be deposited under NSS with a rider that whenever such amount shall be withdrawn, the same shall be treated as income chargeable to tax.
13. The other plea of the ld. DR was that no doubt, some capital receipts had been brought to tax and for that provision of section 2(24) of the Act have been widened by inserting such capital receipt to the definition of income in that sub-section but still there are different amounts which have been termed as income in different provisions of the Act and being charged to tax without bringing corresponding insertion thereof to the provision of section 2(24). Attention was invited to section 64 of the Act which provides inclusion of income of spouse, minor child in the income of individual. The other provision referred to was that of provision of sections 68, 69 of the Act and that of 115J and it was submitted that the Act had created fiction in respect of these incomes but such income a not been brought in the definition of income under section 2(24) of the Act but that does not mean that such fiction created by this Legislature is meaningless and such income shall not be subject to charge.
14. The ld. DR submitted that their lordships of Hon'ble Supreme Court in the case of Bhagwan Das Jain v. Union of India [1981] 128 ITR 315/5 Taxman 7, had an occasion to decide the controversy as to what the expression 'income' denotes and their lordships concluded that dictionary meaning of this word is a thing that comes in'. Income may also be defined as gain derived from land, capital or labour or in two or more of these. Even in its ordinary economic sense, the expression 'income' includes not merely what is received or what comes in by exploiting the 'use of a property but also what one saves by using it oneself. That which can be converted into income can be reasonably recorded as giving rise to income. The other citation referred to by the ld. DR was that of CIT v. Vania Silk Mills (P.) Ltd. [1977] 107 ITR 300 (Guj.) on this point. The plea is that definition of word 'income' is of wide impact and its meaning cannot be restricted to the meaning assigned under section 2(24) of the Act and due regard is to be paid to the words 'unless context otherwise requires' referred to above.
15. The other submission of the ld. DR is that section 80CCA(2) created fiction by treating the withdrawal as 'deemed' income and that is to be treated statutory income and chargeability thereof is also provided and thus, nothing can be said that by not bringing corresponding amendment to section 2(24) bringing withdrawal from NSS account in that definition of income, the Legislature has committed any folly and bringing whole of the scheme to charge such withdrawal to tax at nought.
16. The last contention was that section 80CCA(2) provides chargeability of that income to tax and it cannot be said that such income cannot be brought to tax or there is no specific head. The amount of withdrawal is to be brought under specific head of income from other sources provided under section 56 which is residuary one and cover all income which are not included in the earlier heads.
17. On the above, the contention is that both the pleas raised by the assessee are not well-founded and appeals are to be dismissed.
18. In rejoinder, the assessee submitted that lacuna pointed out by him in the earlier part of the argument is not such which was without any basis. The Government of India appointed an Expert Committee to re-draft Income tax Act and that Expert Committee proposed a draft Income Tax Bill in which an amendment was proposed to bring the withdrawal of NSS within the ambit of definition of income in section 2. He placed before us the copy of relevant extract of draft in which withdrawal from NSS were sought to be added. He also submitted that it is another matter that said draft has not seen the day light as that draft was sent to Select Committee but fact remains that in the draft of income tax bill, such lacuna was pointed out and it supports the contention of the assessee that receipt of such nature cannot be brought to tax unless included in the definition of income. He reiterated the earlier submissions and contended that such withdrawal cannot be subject to tax unless that lacuna is cured and benefit thereof is to be extended to assessee.
19. We have considered the rival submissions and carefully gone through the case law as referred to by respective representative of the parties.
20. Before we proceed to discuss the respective contentions of the ld. representatives of both the parties, it will be beneficial to point out that provisions of section 80CCA of the Act were brought to the statute through the Finance Act, 1987 with a view to provide incentive to the net savings to be made by different types of assessees. The language used by the Legislature in the above section 80CCA is relevant and we reproduce the relevant portion to understand the very import of the above language. It reads as under :-
"Deductions in respect of deposits under National Savings Scheme or payment to a deferred annuity plan. 80CCA : (1) where an assessee, being -
(a) an individual, or
(b) a Hindu undivided family, has in the previous year -
(i) deposited any amount in accordance with such scheme as the Central Government may, by notification in the Official Gazette, specify in this behalf or
(ii) paid any amount to effect of keep in force a contract for such annuity plan of the Life Insurance Corporation as the Central Government may by notification, in the Official Gazette, specify, out of his income chargeable to tax, he shall, in accordance with, and subject to, the provisions of this section, be allowed a deduction in the computation of his total income of the whole of the amount deposited or paid (excluding interest or bonus accrued or credited to the assessee's account, if any) as does not exceed the amount of twenty thousand rupees in the previous year;
(2) Where any amount -
(a) standing to the credit of the assessee under the scheme referred to in clause (i) of sub-section (1) in respect of which a deduction has been allowed under sub-section (1) together with the interest accrued on such amount is withdrawn in whole or in part in any previous year, or
(b) is received on account of the surrender of the policy or as annuity or bonus in accordance with the annuity plan of the Life Insurance Corporation in any previous year, an amount equal to the whole of the amount referred to in clause (a) or clause (b) shall be deemed to be the income of the assessee of that previous year in which such withdrawal is made or, as the case may be, amount is received, and shall, accordingly, be chargeable to tax as the income of that previous year."
21. A reading of the above shall show that investment of any amount deposited in accordance with the specified National Savings Scheme with overall ceiling limit prescribed from time to time was allowed as deduction with rider provided under sub-section 2 of section 80CCA to effect that whenever any withdrawal out of the amount standing to the credit of assessee under NSS in respect of which a deduction has been availed of under section 80CCA(1) together with the interest accrued on such amount is withdrawn, then the said amount shall be deemed to be the income of the assessee of the previous year of withdrawal and chargeable to tax as the income of the said previous year.
22. From the tenor of submissions made by assessee, it transpires that main contention of assessee revolves around the plea that such withdrawal as provided under section 80CCA(2) are of capital nature and whenever Legislature intended to tax amount of receipt of capital nature, necessary provision was made by inserting such receipt in the definition of income under section 2(24) of the Act but no such amendment was made for bringing the withdrawal from NSS account in the above definition. To appreciate this contention, we have to look into the very scheme of the Act and for that the definition of income as given under section 2(24) is to be examined with context to the very section 2 of the Act. The very purpose for bringing the definition section in every enactment is to coin definitions for phrases used in that Act as a definition is intended to serve as a device of shortening sections and to simplify legislative expression for saving a great deal of space and elimination of the repetition of long cumbersome identification. The 'income' has been defined by section 2(24) as under :-
"2(24) : 'Income' includes -
(i) Profit and gains
(ii) Dividend
(iii) .....................etc. Here, the word 'includes' is significant one and we have to see as to what it indicates. There are two form of interpretation clause, in one where the word defined is declared to 'mean' so and so, the definition is explanatory and prima facie restrictive. In the other, where the word defined is declared to 'include' so and so, the definition is extensive. When the Legislature wants to enlarge the natural meaning of a word or a phrase, it uses the word 'includes' and in such a context, inclusive definition means that over and above, the natural meaning of the word, the specially provided meaning of the word will also have to be attributed for the purpose of interpretation of that particular statute or that particular chapter as laid down in the case of CIT v. Premanand Industrial Co-operative Services Society Ltd. [1980] 124 ITR 772 (Guj.). Not only this, in the case of Tai Mahal Hotel v. CIT [1968] 70 ITR 366, AP High Court opined that Legislature uses the word 'means' where it wants to exhaust the significance of the term defined and the word 'includes' where it intends that while the term defined should retain its ordinary meaning, its scope should be widened by specific enumeration of certain matters which its ordinary meaning may or may not comprise so as to make the definition enumerative and not exhaustive. This view was affirmed by Hon'ble Supreme Court, in CIT v. Taj Mahal Hotel [1971] 82 ITR 44 where their lordships have also observed that word 'includes' is often used in interpretation clause in order to enlarge the meaning of words or phrases occurring in the body of the statute. When it is so used, these words and phrases must be construed as comprehending not only such things as they signify according to their nature and import but also those things which the interpretation clause declared that they shall include. It has also been opined by Hon'ble Supreme Court in the case of State of Bombay v. Hospital Mazdoor Sabha AIR 1960 SC 610 that word used in inclusive definition denote extension and they cannot be treated as restricted in any sense.
23. Applying the above analogy laid down by their lordships of different High Courts and Apex Court to the definition of income given in section 2(24) of the Act, it can safely be concluded that said definition is not exhaustive but it is an inclusive definition. It is not capable of exact definition. The word 'income' had been subject matter of interpretation before various High Courts and in the case of Father Epharm v. CIT [1989] 176 ITR 78/43 Taxman 128 (Ker.) it was held that the scheme of section 2(24) of the Act r/w sections 4 and 10 of the Act is that, given its ordinary and natural meaning, the word 'income' will take in any monetary return coming in. The word 'income' was also defined by A.P. High Court in the case of Addl. CIT v. K. Rama Brahman & Sons (P.) Ltd. [1978] 115 ITR 369, as any thing which can properly be described as income and is taxable under the Act unless expressly exempted. While interpreting the word 'income', their Lordships have gone to the extent by not only including the natural and ordinary meaning of that word but even included artificially categories of the income in the definition of income and reference may be made to the decision of CIT v. Jaora Oil Mill [1981] 129 ITR 423 (MP) where, their Lordships have opined that the word definition of income in section 2(24) is an inclusive definition and it covers even such items which are not income in the natural sense of the word; even in its broadest connotation, 'income' refers to monetary return 'coming in' and is conceptually contrary to loss. On the basis of above case law, word 'income' is to be interpreted in view of the definition given above by different High Courts in which word 'income' is not only used in its natural ordinary sense but even included artificial categories of income in it.
24. Further, the definition of income is to be read subject to the qualifying expression used in section 2 of the Act which starts with the expression 'unless the context otherwise requires'. This expression used in section 2 gives much wider scope for including all other income in the word 'income' if text of the Act so provides. In this connection, we may refer the decision of Bhagwan Das Jain v. Union of India [1981] 128 ITR 315/5 Taxman 7 (SC) in which their lordships of Supreme Court have an occasion to interpret the word 'income' and have concluded that word 'income' as defined under section 2(24) does not refer to notional profit or income but still, one finds that income taxable under section 22 as income from house property takes note of a notional income in section 23 and constitutionality of subjecting such notional income to tax was upheld in that case. We may also refer to the decision of Patna High Court in the case of CIT v. Vijay Kumar Budhia [1975] 100 ITR 380 in which their Lordships while defining the word 'income' concluded that capital gains chargeable under section 45 of the Act were included in the definition of word 'income'. But that does not mean that capital gains chargeable under section 46(2) is not assessable as income as definition of 'income' is inclusive and not exhaustive. It shows that their lordships have gone to the extent in upholding the decision to charge the income arising out under section 46(2) of the Act though such amount was not brought within the definition of income under section 2(24) and result thereof shall be that it is not necessary that each and every income which had been made chargeable to tax under the different provisions of tax of the Act shall be specifically brought under the definition of income under section 2(24).
25. The contention of the assessee is then withdrawal from NSS is of capital nature and unless the same is not brought under the definition of section 2(24), it cannot be treated as income but the fact remains that Legislature has specifically brought a specific provision and created a fiction under section 80CCA(2) of the Act by treating the said withdrawal as deemed income and such fiction cannot be excluded from the scope of income which is inclusive definition and on the same pattern as the income arising out under section 46(2) of the Act had been made assessable even though not specifically brought in the definition under section 2(24) or notional income from house rent is made taxable under sections 22 and 23 of the Act.
26. Not only this, it is also relevant to point out that provisions of section 32A provides deduction in respect of investment allowance in a particular year and the Legislature had provided in section 155(4A) that in case machines purchased out of the reserve created under section 32A of the Act are disposed of within a specified period, the total income of the assessee is to be re-computed bringing the amount of investment allowance so deducted to tax. From the above, it is clear that if any deduction is allowed to any assessee on a particular count and if assessee violates the specific provisions, the amount of deduction so allowed is brought to tax without bringing corresponding insertion of such amount in the definition of income provided under section 2(24) of the Act. The same ratio is applicable to the provisions of section 80CCA and subsection (1) provides a deduction and sub-section 2 which is read to be with the sub-section (1) provides that such deduction shall be chargeable to tax in the year of withdrawal. Both these sections cannot be read in isolation but sub-section 1 is inter-dependent with sub-section 2 and the very intention of the Legislature from a bare perusal of that section reveals that Legislature has provided a deferment of chargeability of tax on a particular amount of income to the year of withdrawal and chargeability of tax has not been completely wiped off and thus, contention of the assessee that lacuna is fatal to the chargeability to the tax in respect of amount of withdrawal is without force.
27. The above discussion cannot be complete unless we further examine the provisions of sections 4-5 of the Act. Section 4 provides charge of income tax and section 5 gives out a scope of total income. The words used in section 5 are relevant and we reproduce the same :-
"5. (1) Subject to the provisions of this Act, the total, income of any previous year of a person who is a resident includes all income from whatever source derived which -
(a) is received or is deemed to be received in India in such year by or on behalf of such person; or
(b) accrues or arises or is deemed to accrue or arise@to him in India during such year; or
(c) accrues or arises to him outside India during such year provided that, in the case of a person not ordinarily resident in India within the meaning of sub-section (6) of section 6, the income which accrues or arises to him outside India shall not be so included unless it is derived from a business controlled in or a profession set up in India.
(2) ......................"
From the perusal of the above, it will be seen that the total income of a person includes all income from whatever source derived. The word 'all' is again important and it gives a wide scope to include all income under the definition of total income. It is also relevant that this word 'all income' is again qualified with words 'from whatever source derived'. It covers the amount which is withdrawn by assessee from NSS account as the same shall be included in the word total income. Not only this, the charge under section 5 is on accrual basis or receipt basis. Such receipt or accrual may be either actual or statutory i.e. result of any statutory fiction created by the Act as laid down by the Hon'ble Supreme Court in the case of Smt. Parulata Shyam v. CIT [1976] 108 ITR 345 (350). Section 5 brings within its fold chargeable total income which, is received or is deemed to be received in India. The word 'deemed' is again significant and it denotes to the fiction and if Legislature in its wisdom has created fiction under section 80CCA(2) of the Act, then such amount of receipt withdrawn from NSS shall be the deemed income forming part of total income of the assessee and that appears to be the reason that Legislature must have not brought the proposed amendment to section 2(24) bringing the above withdrawal from NSS account under section 2(24).
28. We do agree with the preposition of assessee that receipt by itself is not sufficient to tax but it is only receipt of revenue nature which is income and can be attracted tax and receipt of capital nature does not, normally, come within the net of the Act as laid down by their lordships in the case of CIT v. Krishna Industrial Corpn. Ltd. [1973] 92 ITR 261 (AP). But the fact remains if any fiction is created by the Legislature, then the amount, if made taxable by creating a fiction, the nature of that receipt shall not be capital but that will be income as Legislature had made that amount as 'deemed income' for charging of tax.
29. We also agree that sections 4 to 9 of the Act are charging sections but as discussed above, the above deemed income is also chargeable under section 5 of the Act and there remains no lacuna.
30. The next argument of the assessee was that there is no specific head under which the amount can be charged to tax. For this, we may point out that section 56 of the Act takes care of such eventuality. This section provides residuary head and its words 'if it is not chargeable to income tax' under any of the heads specified in section 14 items A to E are again significant and provides that section 56 deals with the income which is not included under any of the preceding heads under section 14 of the Act. The amount in question is not included in the earlier head and is naturally chargeable to tax under head prescribed under section 56 of the Act and this argument of assessee is also of no use.
31. Considering all the above facts and circumstances, we are of the opinion that provisions of section 80CCA(2)(a) are specific and there was no lacuna in it as this station provides the definition of income as well as chargeability of the same for income tax and thus, authorities below were justified in charging the tax on the amount of withdrawal made by the assessee in these two years.
32. Both the appeals are without substance and dismissed.