Law: Income Tax Act, 1961

Section: 22,27

(a) Income-tax---House property---Owner---Meaning of "owner In the context of S.22 "owner" is a person who is entitled to receive income in his own right--¬Section 12 does not require registration of sale-deed---Amendment of S.27 by Finance Act of 1987 is clarificatory in nature---Income Tax Act, 1961, Ss.22 & 27---Indian Income Tax Act, 1922, S.9. (b) Interpretation of statutes--- Construction which takes into account changes since provision was enacted--- Construction beneficial to assessee in case of ambiguity---Rule against retrospectivity not applicable to declaratory provisions. (c) Words and phrases--- ------ Owner"---Connotation---[Sushil Ansal v. CIT. (1986) 160 ITR 308 reversed]. Section 9(i) of the Indian Income-tax Act, 1922, was substantially the same as section 22 of the Indian Income Tax Act, 1961. The whole of section 9 of the old Act has been split up and redrafted into several separate sections, namely, sections 22 to 27 under the new Act. In Jodha Mal Kuthiala v. CIT (1971) 82 ITR 570 (SC), it was held that section 9 of the 1922 Act brings to tax the income from property and not the interest of a person in the property. A property cannot be owned by two persons, each one having independent and exclusive right over it. Hence, for the purpose of section 9 of the 1922 Act, the owner must be "that person who can exercise the rights of the owner, not on behalf of the owner but in his own right". The above observations of the Supreme Court clearly fix the liability on the person who receives or is entitled to receive the income from the property in his own right. 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, since the Act was initially framed (an updating construction). While it remains law, it is to be treated as always speaking. This means that in its application on any date, the language of the Act, though necessarily embedded in its own time, is nevertheless to be construed in accordance with the need to treat it as current law. In construing an ongoing Act, the interpreter is to presume that Parliament intended the Act to be applied at…

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