Law:

Section:

Section 4, read with First and Second Schedule, of the Companies (Profits) Surtax Act, 1964 - Capital - Computation of - Assessment years 1965-66 to 1967-68 - Whether if there is no income of kind mentioned in clauses (iii), (vi) and (viii) of rule 1 of First Schedule at all in a particular assessment year, rule 2 of Second Schedule will not be attracted at all - Held, yes - Whether, therefore, where assessee had no income whatsoever which would fall under clause (viii) of rule 1 of First Schedule, value of assets which would have given rise to such income could not be deducted from statutory deduction - Held, yes Interpretation of statutes - Legislative intent FACTS In computing the capital assets of the company in accordance with the provisions of the Second Schedule for determining the "statutory deduction" for the relevant assessment years the income-tax authorities had taken the value of the assets which was capable of giving rise to income mentioned under clause (viii) of rule 1 of the First Schedule i.e., income by way of dividends. On reference : HELD The Supreme Court has ruled in a number of cases that in understanding the provisions in a particular section or sections in a statute, the general interest, purpose and scope of the Act as seen from the provisions thereof must be seen. In other words, when the object and purpose of the Act is clear, a court will not be guided solely by the words of a particular section or a rule. The attempt would be to construe that rule in consonance with the general interest, purpose and object of the Act. One must normally understand the legislature to speak in clear terms and with consistency which is understandable from the provisions in the Act read as a whole and if there is any provisions which does not fit into the general scheme and object and purpose of the Act, a toning down of the provisions which militates against this intention and object is not only permissible, but is required to be adopted in such cases. If there are anomalies resulting from such different purposes and intentions being indicated, the section which militates against the general purpose of the Act will have to be understood in a manner…

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