“purposive interpretation”
The decision most relied on for purposive interpretation is CIT v. Anjum M.H. Ghaswala (252 ITR 1), cited in 452 judgments on BharatTax.
Leading authorities on purposive interpretation
Levy of interest under sections 234A, 234B, and 234C of the Income Tax Act is mandatory. Tax statutes are to be interpreted strictly, allowing no room for purposive interpretation.
Provisions in taxing statutes that grant incentives, concessions, or exemptions for promoting economic growth and industrialization must be interpreted liberally and purposively. Any restrictions placed on such provisions should also be construed reasonably to advance their objective, not frustrate it.
For condoning delay, the term 'sufficient cause' must be interpreted liberally and purposively to advance justice. Delay not tainted by mala fides, gross negligence, or recklessness, and based on honestly obtained legal advice, constitutes sufficient cause.
A clarificatory or declaratory amendment to a statutory provision has retrospective effect from the date the original provision came into force, as its purpose is to clarify existing law rather than introduce new law.
Taxing statutes must be interpreted strictly, assuming that the law-making authority does not commit a mistake or make an omission. There is no room for purposive interpretation under direct tax laws.
The expression "sufficient cause" for condoning delay in filing appeals must receive a liberal and purposive construction. This approach aims to advance substantial justice, which is of paramount importance.
The Supreme Court holds that for income tax purposes, the term 'income' includes 'loss,' allowing for the set-off of a spouse's or minor child's business losses when their income is clubbed with the assessee. This decision emphasizes interpreting tax statutes, especially benevolent provisions, by considering the legislative scheme over a strict literal construction.
Courts must reject interpretations that defeat the plain intention of the legislature, even if language is imprecise. A statute must be read as a whole, construing provisions harmoniously to avoid rendering any part otiose or a dead letter.
