Dr. B.P. Saraf, J.
By this reference under section 256(1) of the Income Tax Act, 1961, at the instance of the revenue, the Tribunal has referred the following question of law to this court for opinion.
'Whether, on the facts and in the circumstances of the case, the sum of Rs. 40,264 received by the assessee from Mahindra & Mahindra Ltd. under the superannuation scheme on his premature retirement is not liable to be assessed or charged to tax?'
2. This reference pertains to the assessment year 1976-77, the relevant previous year being the year ended 30-3-1976. During this year, the assessee, who is an individual, received a sum of Rs. 44,743 from his employer under the superannuation scheme on his premature retirement for service with effect from December 1975, out of which a sum of Rs. 6,358.41 was deducted as tax. Before the Income Tax Officer, the assessee claimed that this amount was not taxable as his income. The Income Tax Officer did not accept this claim of the assessee as he was of the opinion that the assessee having retired prematurely, the contributions made prior to 1961 only were exempted under section 10(13)(iv) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act'). Accordingly, he brought to charge a sum of Rs. 40,264, after excluding the contribution made prior to 1961 amounting to Rs. 4,372. The assessee appealed to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner, following the decision of the Tribunal in the case of Income Tax Officer vs. JS. Vasan in ITA No. 678/Bom/1980 dt. 13-1-1981, wherein, it was held that the amount received by the assessee from the approved superannuation fund was not income of the assessee in view of the definition of income contained in section 2(24) read with section 17(3) of the Act, allowed the appeal of the assessee and held that the amount received by him was not taxable in his hands as income. Aggrieved by the above order of the Appellate Assistant Commissioner, revenue appealed to the Tribunal. The Tribunal also, following its earlier decision in the case referred to above, confirmed the order of the Appellate Assistant Commissioner and dismissed the appeal of the revenue. Hence this reference at the instance of the revenue.
3. We have heard Mr. Shyam Diwan, learned counsel for the revenue, who submits that only a part of the payment received by an assessee from superannuation fund is exempted from tax by virtue of the provisions contained in sub-clause (iv) of clause (13) of section 10 of the Act. Section 10 of the Act sets out incomes which do not form part of the total income. Clause (13) thereof deals with payments from approved superannuation fund. The said clause, as it stood at the material time, reads as follows.
'(13) any payment from an approved superannuation fund made (i) on the death of a beneficiary; or
(ii) to an employee in lieu of or in commutation of an annuity on his retirement at or after a specified age or on his becoming incapacitated prior to such retirement; or
(iii) by way of refund of contributions on the death of a beneficiary; or
(iv) by way of refund of contributions to an employee on his leaving the service in connection with which the fund is established otherwise than by retirement at or after a specified age or on his becoming incapacitated prior to such retirement, to the extent to which such payment does not exceed the contributions made prior to the commencement of this Act and any interest thereon; '
According to Mr. Diwan, the case of the assessee falls in sub-clause (iv) of clause (13) and his income to the extent of the contributions made prior to the commencement of this Act with interest thereon would only be exempted. That part of the amount received by the assessee from approved superannuation fund, according to the learned counsel, has already been deducted by the Income Tax Officer and only the balance has been included in his income. Our attention was also drawn by the learned counsel to rule 6 of Part B of the Fourth Schedule to the Act which provides for deduction of tax at source where employees, contribution to the approved superannuation fund are paid to an employee in the circumstances other than those referred to in section 10(13) of the Act. Reliance was also placed on sub-section (5) of section 192 of the Act, which provides for deduction of tax at source by the trustees of the fund where any contribution to the extent provided in rule 6 of Part B of the Fourth Schedule from the payment to the employee of contribution made by the employer including interest on such contribution.
4. Mr. Sathe, learned counsel for the assessee, on the other hand, submitted that receipt from approved superannuation fund do not constitute income of the assessee within the meaning of the expression 'income' as defined in section 2(24) of the Act. He drew our attention to section 17 of the Act which defines the expression 'salary, perquisites and profits' for the purposes of sections 15 and 16 of the Act, in particular, to the definition of 'profits in lieu of salary' contained in sub-section (3) of section 17 of the Act, to show that payments from approved superannuation fund have been specifically excluded from the ambit of the said definition. It was contended by the learned counsel that the onus is always on the revenue to show that a particular receipt constitutes income for the purpose of the Act. It was also contended that no tax can be imposed by inference or by analogy or by trying to probe into the intent of the legislature. The learned counsel submitted that the receipt from the approved superannuation fund cannot be treated as income merely by referring to the exemption of a part of it in sub-clause (iv) of clause (13) of section 10 of the Act, more so when such receipts have been specifically exempted by the legislature from the definition of 'income'.
5. We have carefully considered the rival submissions. We have already set out the provisions of clause (13) of section 10 of the Act. We have also perused sub-section (5) of section 192 of the Act which provides :
'(5) Where any contribution made by an employer, including interest on such contributions, if any, in an approved superannuation fund is paid to the employee, tax on the amount so paid shall be deducted by the trustees of the fund to the extent provided in rule 6 of the Part B of the Fourth Schedule.'
Rule 6 of the Part B of the Fourth Schedule, which provides for deduction of tax on contributions paid to an employee, reads as follows :
'Where any contributions made by an employer, including interest on contributions, it any, are paid to an employee during his life-time, [in circumstances other than those referred to in clause (13) of section 10] on the amounts so paid shall be deducted at the average rate of tax at which the employee was liable to tax during the preceding three years, when he was a member of the fund, and shall be paid by the trustees to the credit of the Central Government with the prescribed time and in such manner as the Board may direct.'
It is true that these provisions indicate that receipts from the approved superannuation fund are taxable in the hands of an assessee except to the extent specifically exempted by provisions of clauses (13) of section 10 of the Act. However, that by itself cannot justify levy of tax on the receipts from superannuation fund. Law is well-settled that in construing fiscal statutes and in determining the liability of a subject to tax one must have regard to the strict letter of the law and not merely to the spirit of the statute or the substance of the law. The onus is on the revenue to satisfy the court that the case falls strictly within the provisions of the law. If the case is not covered within the four-corners of the provisions of the taxing statute, no tax can be imposed by inference or by analogy or by trying to probe into the intentions of the legislature and by considering what was the substance of the matter. (Fernandes v. State of Kerala, AlR 1957 SC 657). It is equally well-settled that if a section in a taxing statute is of doubtful and ambiguous meaning, it is not possible out of that ambiguity to extract a new and added obligation not formerly cast upon the taxpayer. In the light of there principles, in the instant case, we are required to examine whether the receipts from the approved superannuation fund can be regarded as income under the provisions of this Act. 'Income' has been defined in clause (24) of section 2 of the Act as follows
' 'Income' includes-
(i) profits and gains.,
(ii) dividend;
(iia) voluntary contributions received by a trust created wholly or partly for charitable or religious purposes or by an institution established wholly or partly for such purposes, not being contributions made with a specific direction that they shall form part of the corpus of the trust or institution.,
Explanation. -For the purposes of this sub-clause, 'trust' includes any other legal obligation;
(iii) the value of any perquisite or profit in lieu of salary taxable under clauses (2) and (3) of section 17;
(iv) the value of any benefit or perquisite, whether convertible into money or not, obtained from a company either by a director or by a person who has a substantial interest in the company, or by a relative of the director or such person, and any sum paid by any such company in respect of any obligation which, but for such payment, would have been payable by the director or other person aforesaid;
(v) any sum chargeable to income-tax under clause (ii) and (iii) of section 28 or section 41 or section 59
(va) the value of any benefit or perquisite taxable under clause (iv) of section 28;
(vi) any capital gains chargeable under section 45;
(vii) the profits and gains of any business of insurance carried on by a mutual insurance company or by a co-operative society, computed in accordance with section 44 or any surplus taken to be such profits and gains by virtue of provisions contained in the first Schedule;
(viii) any annuity due, or commuted value of any annuity paid, under the provisions of section 280);
(ix) any winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature whatsoever;'
Section 15 sets out the incomes which are chargeable to income-tax under the head 'salaries'. 'Salary' has been defined in clause (1) of section 17 of the Act to include, inter alia, perquisites or profits in lieu of salary. The expressions 11 'perquisites' and 'profits' in lieu of 'salary' have also been defined in clause (2) and (3) of section 17 Section 17, as it stood at the material time, reads:
'17. 'Salary' 'perquisite' and 'profits in lieu of salary' defined for the purposes of sections 15 and 16 and of this section-
(1) 'salary' includes
(i) wages;
(ii) any annuity or pension;
(iii) any gratuity;
(iv) any fees, commissions, perquisites or profits in lieu of or in addition to any salary or wages;
(v) any advance of salary;
(vi) the annual accretion to the balance at the credit of an employee participating in a recognised provident fund to the extent to which it is chargeable to tax under rule 6 of Part A of the Fourth Schedule; and
(vii) the aggregate of all sums that are comprised in the transferred balance as referred to in sub-rule (2) rule 11 of the Part A of the Fourth Schedule of an employee participating in a recognised provident fund, to the extent to which it is chargeable to tax under sub-rule (4) thereof;
(2) 'perquisite' includes-
(i) the value of rent-free accommodation provided to the assessee by his employer;
(ii) the value of any concession in the matter of rent respecting any accommodation provided to the assessee by his employer;
(iii) the value of any benefit or amenity granted or provided free of cost or at concessional rate in any of the following cases-
(a) by a company to an employee who is a director thereof;
(b) by a company to an employee being a person who has a substantial interest in the company;
(c) by any employer (including a company) to an employee to whom the provisions of paras (a) and (b) of this sub-clause do not apply and whose income under the head 'Salaries', exclusive of the value of all benefits or amenities not provided for by way of monetary payment, exceeds eighteen thousand rupees;
(iv) any sum paid by the employer in respect of any obligation which, but for such payment, would have been payable by the assessee; and
(v) any sum payable by the employer, whether directly or through a fund, other than a recognised provident fund or an approved superannuation fund, to effect an assurance on the life of the assessee or to effect a contract for an annuity;
(3) 'profits in lieu of salary' includes
(i) the amount of any compensation due to or received by an assessee from his employer or former employer at or in connection with the termination of his employment or the modification of the terms and conditions relating thereto;
(ii) any payment [other than any payment referred to in clause (10), clause (10A), clause (IOB), clause (11), clause (12) or clause (13A) of section 10 ], due to or received by an assessee from an employer or a former employer or from a provident or other fund (not being an approved superannuation fund), to the extent to which it does not consist of contributions by the assessee or interest on such contributions.'
(Emphasis, here italicised in print, supplied)
It is obvious from the above definition of 'profits in lieu of salary', which is an inclusive definition, that the legislature, while including certain payments received by an assessee from provident fund or any other fund within the scope and ambit of the said definition, has specifically excluded payments received by an assessee from superannuation fund. Payments from approved superannuation fund are, therefore, not treated as income under the Act. That being so, no tax can be imposed on such receipts by the assessee by inference or by analogy or by trying to probe into the intentions of the legislature from the provisions of s. 10(13) of the Act which provides for exemption of a part of such income and section 192(5) read with rule 6 or Part B of this Fourth Schedule which provides for deduction of tax at source or payments from superannuation fund other than those referred to in section 10(13) of the Act. We cannot extend the scope of income by analogy to impose tax on receipts which are not covered within the four-corners of the provisions of the Income Tax Act. We are, therefore, of the opinion that in view of the clear and unambiguous language of section 17(3)(ii) of the Act, as it stood at the material time, payments from an approved superannuation fund cannot be treated as income for the purposes of the Act.
6. We are supported in our above conclusion by the fact that the Parliament itself has since noticed this anomaly and with a view of bringing such receipts within the provisions of the law, by the Finance Act, 1995, amended section 17(3)(ii) of the Act to restrict the exclusion from the definition of 'profits in lieu of salary' only payments which are covered under section 10(13) and not other payments from the approved superannuation funds. Section 17(3)(ii), as amended, now reads.
'(ii) any payment [other than any payment referred to in clause (10), clause (10A), clause (10B), clause (11), clause (12) [c]. (13)-sic] or clause (13A) of section 10], due to or received by an assessee from an employer or a former employer or from a provident or other fund, to the extent to which it does not consist of contributions by the assessee or interest on such contributions.'
This amendment has, however, been made with effect from 1-4-1996 and, accordingly, applicable to the assessment year 1996-97 and subsequent years. It is clear from the above amendment, that for the year under consideration and assessment years upto assessment year 1995-96, payments received by an assessee from the approved superannuation fund cannot be treated as income for the purposes of the Act.
7. The Revenue has also accepted this lacuna in the law which is evident, from the following excerpts from the notes on clauses of Finance Act, 1995 contained in the departmental Circular No. 717, dt. 14th Aug., 1995 :
'22.1 Under section 10(13) of the Income Tax Act, any payment from an approved superannuation fund on the death of a beneficiary or any payment to an employee on commutation of pension on retirement is exempt from tax. Part B of the Fourth Schedule to the Act contains rules relating to approval, etc., of the superannuation funds. Rule 6 thereof provides for deduction of tax at source where employees' contributions to the approved superannuation fund are paid to an employee in circumstances other than those referred to in section 10(13).
22.2 Although tax is deducted at source on payments which are not covered by the exemption under section 10(13), the tax so deducted is being refunded because under the existing section 17(3) relating to profits in lieu of salary, payments from an approved superannuation fund are not treated as income. This is an unintended benefit and creates an anomalous situation where tax is deducted, at source but has to be refunded because payments not covered by section 10(13) have not been specifically included as income.
22.3 In order to remove this anomaly, section 17(3)(ii) of the Income Tax Act has been amended to exclude from the definition of profits in lieu of salary, only payments which are covered under section 10(13).and not other payments from the approved superannuation fund.
22.4 This amendment will take effect from 1-4-1996 and will, accordingly, apply in relation to the assessment year 1996-97 and subsequent years.'
(Emphasis, herein italicised in print, supplied)
It is clear from the above that revenue itself has accepted the position that under section 17(3) of the Act, as it stood prior to 1-4-1996, payments from approved superannuation fund are not treated as income.
8. In the light of the foregoing discussion, we answer the question referred to us in the affirmative, i.e., in favour of the assessee and against the revenue.
9. This reference is disposed of accordingly with no order as to costs.