AI Drafter 
TaxTMI 
TaxTMI 
2024 (5) TMI 1172
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....gether. Therefore, all the afore-noted six appeals have been heard at length on 16.04.2024 and 18.04.2024 and the judgement has been reserved on 18.04.2024. Although by order dated 17.05.2005 the appeal was admitted on three substantial questions of law, but the learned counsel for the appellant has pressed and argued only on substantial question of law no. (a) which is reproduced below;- "(a) Whether on a true and proper interpretation of the provisions of sections 2 (22A) and 90 of the Income Tax Act, 1961 read with CBDT circular No. 333 dated April 2, 1982 and CBDT letter dated November 21, 1994 and Article 24 (2) of the Double Taxation Avoidance Agreement India and Netherlands, the Tribunal was justified in law in holding that the appellant was liable to income tax at the higher rate applicable to a foreign company and not at the rate of tax applicable to a domestic company;" Particular of Afore-Noted Appeals:- 3. Afore-noted leading Income Tax Appeal No. 155 of 2005 arises from the impugned order of the Income Tax Appellate Tribunal, 'E' Bench, Kolkata (for short ITAT) dated November, 2003 passed in (i) ITA No. 58 (Cal) of 2001 (Assessment year 1992-93), (ii) IT....
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....ome attributable to the PE. By the impugned order the ITAT has held that the appellant/ assessee is liable to Income Tax at the rate specified for company "other than domestic company". Case set up by the appellant is that in terms of Article 24 (2) of DTAA between India and the Netherlands, containing provision of non-discrimination, the appellant/assessee is liable to Income Tax at the rate applicable to a domestic company. The ITAT has held that the rate of Income Tax as provided in the Finance Act applicable to a domestic company shall not apply to the appellant/assessee and instead the appellant/assess is liable to tax at the rate prescribed by the Finance Act for a company other than domestic company. Aggrieved with the order of the ITAT the appellant has filed the present appeal raising the afore-quoted common substantial question of law. 7. Relevant portions of the order of ITAT (subject matter of Income Tax Appeal No. 155 of 2005) dealing with the rate of tax applicable to the appellant/assessee are reproduced below;- "46. We have given our careful consideration to the rival contentions. The issue relating to the applicability of rate of tax in the case of the ....
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....e consider it necessary to examine the effect of the amendment of Section 90 in regard to the application of rate of tax. 48. It will be useful to quote Section 90 as under :- "90.(1) The Central Government may enter into an agreement with the Government of any country outside India - (a) for the granting of relief in respect of income on which have been paid both income-tax under this Act and income-tax in that country, or (b) for the avoidance of double taxation of income under this Act and under the corresponding law in force in that country, or (c) for exchange of information for the prevention of evasion or avoidance of income-tax chargeable under this Act or under the corresponding law in force in that country, or investigation of cases of such evasion of avoidance, or (d) for recovery of income tax under this Act and under the corresponding law in force in that country, and may by notification in the Official Gazette, make such provisions as may be necessary for implementing the agreement. 2. Where the Central Government has entered into an agreement with the Government of any country outside India under sub-sect....
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....law, unless they are in conflict with an Act of Parliament. Comity of nations or no. Municipal Law must prevail in case of conflict. National Courts cannot say "yes" if Parliament has said no to a principle of international law. National Courts will endorse international law but not if it conflicts with national law. National courts being organs of the National State and not organs of international law must perforce apply national law if international law conflicts with it. But the Courts are under an obligation within legitimate limits, to so interpret the Municipal Statute as to avoid confrontation with the comity of Nations or the well-established principles of International law. But if conflict is inevitable, the latter must yield." 50. Section 90 of the Income Tax Act empowers the Central Government to enter into an agreement with the Government of any country outside India for granting of relief or for avoidance of double taxation of income, etc. Thus the source of double taxation avoidance agreement with Nederland is Section 90 of the Income Tax Act, 1961. Section 90 has been quoted in para 48 above. 51. It is note worthy that Sub-Section (2) of Section 90 ....
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....-693(E) dated 30.8.1999. This agreement is available in I.T.R. (St.) 72. The Notification gives the source of the agreement, i.e. Section 90 of the I.T. Act, 1961 and similar provision under the Companies Profits (Sur-tax) Act and Wealth-tax Act. Thus, it is evident that the DTAA derives its source from the Income-tax Act, 1961 itself, overrides the provisions of the Income-Tax Act, 1961 within the limits provided under the said Act. The limit provided under the Act, as pointed out earlier, is that in the event of conflict between the provisions of the DTAA and the provision of the Income Tax Act, the beneficiary provision of the Act shall prevail in regard to the taxation of the subjects. It thus become abundantly clear that when there is no conflict between DTAA and the Income Tax Act, 1961 in regard to any aspect of the matter, the provisions of the Income Tax Act, 1961 shall have to be implemented with full force. Section 90 was amended as pointed out earlier, by the Finance Act, 2001 w.r.e.f. 1.4.1962 incorporation the Explanation which has been quoted in para 48 above. At this stage it will be relevant to refer to Article 24 of the DTAA, which reads as under :- ....
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....any case of the appellant. However, the Tribunal has expressed the view that Article 24 applied in the case of the appellant. However Explanation to Section 90 specifically provides that the charge of tax in respect of the foreign company at the rate higher than the rate at which a domestic company is chargeable shall not be regarded as less favourable charge. In the DTAA, there is no (illegible) of "less favourable charge". Therefore, the Explanation to Section 90 cannot be said to be in conflict with the provisions of the DTAA. On the facts and in the circumstances of this case, there is no escape from the conclusion that there is no conflict between the provisions of the DTAA and the Income Tax Act, 1961 in regard to the non-discrimination. 54. As has been pointed out earlier, the provisions of DTAA incorporation specific provisions contrary to the provisions of the Income Tax Act, 1961 are to prevail in so far as such incorporation is authorised under the Income Tax Act, 1961 itself. However, in regard to the subsequent amendments, the only requirement is to notify the amendments to the respective countries and in the event of there being no conflict, the amended provi....
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.... in so far as there is no doubt about the category of the Foreign company vis-a-vis the Indian company having been specified in the explanation, one need not ascertain as to whether in any case the second category of the companies would at all exist. We, therefore, do not find merit in the contentions advanced on behalf of the assessee in this regard. 59. It is evident from the letter dated 24.11.1994 that the CBDT was of the view that the tax rate applicable in the case of the appellants would be the same as applicable to India companies. However, this opinion was changed before the law was amended vide letter dated 24.3.2000 referred to above. We have referred to the contentions advanced on behalf of the assessee in regard to these two letters issued by the CBDT. It is evident from the content the letters that the opinion of the Board is expressed in the aforementioned letters. If the how were not amended, perhaps we would have no difficulty in holding that the A.O. could not have overlooked the opinion of the Board in regard to the taxation of the appellants. So, however, the law has been amended retrospectively. Therefore, the only issue that requires to be considered ....
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....pectively, the letters issued by the Board, even assuming that they have the effect of circular issued u/s. 419 of the I.T. Act, 1961, are ineffective and they have to give way to the law passed by the supreme legislature. It may be pertinent to mention that their Lordships of the Delhi High Court in the case of National Thermal Power Corpn. of India Ltd. -Vs- Union of India [192 I.T.R. 187 at page 189] held that the opinion of the Board expressed in its administrative capacity can under no circumstances be binding on the appellate authorities or the High Courts on a reference. 61. In the case of C.I.T. -Vs- Swedish Enst. Asia Co. Ltd. [(1981) 127 I.T.R. 148, at page 165], their Lordships of the Calcutta High Court held that when the section is clear, one cannot take aid of the circulars to interpret the law. This view is in consonance with the view expressed by their Lordships of the Supreme Court in the case of State Bank of Travancore (Supra). 62. We may further refer to the observations of Sri K. Srinivasan, author of the book on Double Taxation Avoidance Agreements contained in para 7.2 of the book as under :- "7.2. While a treaty may supersede the e....
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....ation of the action resulting in taxation not in accordance with the provisions of the Convention. 2. The competent authority shall endeavour, if the objection appears to it to be justified and if it is in itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other State, with a view to the avoidance of taxation which is not in accordance with the Convention. Any agreement reached shall be implemented notwithstanding any time limits in the context of Law of the States. 3. The competent authority of the States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases and provided for in that Convention. 4. The competent authorities of the States may communicate with each other directly for the purpose of reaching an agreement in the sense of the preceding paragraphs. When it seems advisable in order to reach agreement to have an oral exchange of opinions, such exchange may take place through a Commission consisting of represen....
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.... 2. Undisputedly in accordance with the provisions of the Act the Appellant would be assessed at the rate provided for in paragraph E as applicable to a company other than a domestic company. However, in view of the undisputed fact that the Appellant is a resident of the Netherlands in terms of the Double Taxation Avoidance Agreement entered into between the Governments of India and the Netherlands it would be liable to tax at the rates applicable to either a domestic company or cooperative society as elaborated herein. Section 90 of the Act empowers the Central Government to enter into Double Taxation Avoidance Agreements (hereinafter referred to as "DTAA/DTAAS"). Sub-Section (2) to Section 90 lays down as under- "(2) Where the Central Government has entered into an agreement with the Government of any country outside India or specified territory outside India, as the case may be, under sub-section (1) for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to that assessee. [Emphasis add....
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....shment of a Netherlands' entity is subjected to a tax treatment that is less favourable enterprise that is carrying on similar activities, the same would than an Indian tantamount to prohibited. The levy discrimination of the Netherlands' entity, an action which is prohibited of tax on the profits of the Appellant's banking activities at a rate higher than the rate applicable to domestic companies is, thus, impermissible. Reliance in this behalf is placed on the following- i. Circular of the Central Board of Direct Taxes dated November 21, 1994 (Pg. 222/509A of the Paper Book). ii. Decision of the Income Tax Appellate Tribunal, Kolkata (hereinafter referred to as "the Tribunal") dated March 30, 2001 in the appellant's own case for the assessment year 1996-97 (Pg. 397 @ Pgs. 426 to 441 of the Paper Book). The said order has become final since the appeal of the Department against the said order, being ITA 217 of 2001, has been dismissed on June 2, 2014 as would appear from the case status records on the website of the Calcutta High Court. iii. Bank of Tokyo Mitsubishi vs. CIT (supra). iv. The Tribunal in para 47 of the impugned orde....
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....nt that the insertion of the said Explanation below section 90 of the Act was thus effected by the Finance Act, 2001 (which was passed subsequently) only with a view to reverse the decision of the Tribunal in the appellant's own case for the assessment year 1996-97 with retrospective effect. Such an action is impermissible in law as held in the following judgment- a. Director of Income Tax v. New Skies Satellite BV (supra), at Para 29 Pg. 134 to Para 38 Pg. 138 of the Reports. 8. It is submitted that where the Legislature wanted to enact a provision that would override a treaty provision specific language to that effect was used. Attention is invited to sub-section (2A) of section 90 of the Act which reads thus:- "(2A) Notwithstanding anything contained in sub-section (2), the provisions of Chapter X-A of the Act shall apply to the assessee even if such provisions not beneficial to him." 9. In the absence of a similar non-obstante clause in the Explanation below section 90, the said Explanation cannot override the provisions of the DTAA. Reliance in this behalf is placed on the following judgment- a. Sanofi Pasteur Holding SA v. Depa....
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.... a compromise regarding their concurrent tax jurisdiction. While on the one hand, India did not re-negotiate with Netherlands for the purposes of amending Article 24 of the DTAA to bring it in consonance with the said Explanation, on the other hand, India incorporated a clause similar to the said Explanation in its DTAAS with other countries, in varied phraseology and methodology, both before as well as after the insertion of the said Explanation. The fact that such amendments in the DTAAS were made even after the insertion of the said Explanation in the Act leads to the inescapable conclusion that even the Government admits that it cannot unilaterally amend the DTAAS by merely amending the Act. Otherwise, negotiations and renegotiations, as the case may be, for incorporation of the said Explanation in other DTAAS would be otiose. On a perusal of the list of dates showing the DTAAS entered into by India, it would be evident that India has taken different stands with different countries with respect to the Article on non-discrimination and the same is illustratively summarised as under- a. DTAAS with non-discrimination clause similar to the India-Netherlands DTAA-Libya (Pg.....
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....a conflict between domestic law and international law, the latter must yield, which judgment has been relied upon by the Tribunal in the impugned order (Pg. 87 of the Paper Book), has no application to the facts of the instant case. Such observation was given with respect to a situation in which an international convention and a bilateral treaty was being given effect to in the absence of any enabling provisions for such convention and bilateral treaty to override the domestic legislation. These observations only lay down the principle that international law may be incorporated in the domestic law even without an express legislative sanction provided they are not in conflict with domestic law but such an accommodation/incorporation does not extend to a scenario in which the provisions of domestic law are clearly contrary to the international law. In the instant case however, it is the Act itself that provides that the provisions of a duly notified DTAA under the scheme of section 90 will override the provisions of the Act. In other words, it is by operation of section 90 (2) of Act and not due to the general principles of extending respect to international conventions and treaties,....
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.... company which, in respect of its income liable to tax under this Act, has made the prescribed arrangements for the declaration and payment, within India, of the dividends (including dividends on preference shares) payable out of such income;" [Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989.] (ii) Section 2 (23A) of the Income Tax Act, 1961 "(23A) "foreign company" means a company which is not a domestic company" [Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989] (iii) Section 2 (26) of the Income Tax Act, 1961 "(26) "Indian company" means a company formed and registered under the Companies Act, 1956 (1 of 1956), and includes- (i) a company formed and registered under any law relating to companies formerly in force in any part of India (other than the State of Jammu and Kashmir [and the Union territories specified in sub-clause (iii) of this clause]); [(ia) a corporation established by or under a Central, State or Provincial Act ; (ib) any institution, association or body which is declared by the Board to be a company under clause (17) ;] (ii) in t....
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....to the provisions of this Act, the total income of any previous year of a person who is a non-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. Explanation 1. - Income accruing or arising outside India shall not be deemed to be received in India within the meaning of this section by reason only of the fact that it is taken into account in a balance sheet prepared in India. Explanation 2. - For the removal of doubts, it is hereby declared that income which has been included in the total income of a person on the basis that it has accrued or arisen or is deemed to have accrued or arisen to him shall not again be so included on the basis that it is received or deemed to be received by him in India." (vi) Section 90 of the Income Tax Act, 1961 "90. [Agreement with foreign countries. (1) The Central Government may enter into an agreement with the Government of any country outside India or specified territory outside India,- ....
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....rgeable, shall not be regarded as less favourable charge or levy of tax in respect of such foreign company.] *[Inserted by the Finance Act, 2001, w.r.e.f. 1-4-1962.] (vii) Explanatory notes number 54, 54.1 and 54.2 in 'Explanatory Notes on the provisions of Finance Act of 2001 F. No. 153/88/2001/-TPL, Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes;- "54. Amendment in Section 90 relating to agreement with foreign countries 54.1 Though Finance Act, 2001 an Explanation has been inserted in Section 90 of the Income Tax Act to clarify that the charge of the tax in respect of a foreign company at a rate higher than the rate at which a domestic company is chargeable, shall not be regarded as less favourable charge or levy of tax in respect of such foreign company, where such foreign company has not made the prescribed arrangement for declaration and payment within India, of the dividends, (including dividends on preference shares) payable out of its income in India. 54.2 This amendment takes effect retrospectively from 1st April, 1962 and accordingly, applies in relation to the assessment year 1962-1....
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....ge of effective date and applicable rate of tax. Therefore, the aforesaid provisions of the Finance Act 2004 have been reproduced for considering whether rate of tax provided in Clause (a) shall be applicable or the rate of tax as provided in clause (b) shall be applicable to the appellant/assessee? 11. In the memorandum of appeal, the appellant had taken only five grounds with regard to the applicable rate of Income Tax, as under;- "GROUNDS (I) The Learned Tribunal erred in holding that your petitioner is chargeable at the Income tax rate applicable to a foreign company as against the rate of tax applicable to a domestic company. (II) The Learned Tribunal erred in confirming the applicability of a higher rate of tax based on the Explanation to section 90 of the Income-tax Act, 1961 ("the Act") (inserted by the Finance Act, 2001 with retrospective effect from 1 April 1962), disregarding the express provisions of Article 24 (2) of the Double Tax Avoidance Agreement between India and Netherlands dated 27 March 1989 (hereinafter referred to as "the DTAA") read with section 90 (2) of the Act and the Central Board of Direct Taxes ("CBDT") Circular No. 333 dated 2....
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....e or rates, income tax at that rate or those rates shall be charged for that year in accordance with and subject to the provisions of this Act in respect of the total income of the previous year of every person. Thus, every year parliament enacts Finance Act which provides for rate of Income Tax to be charged in respect of the total income of the previous year. The Finance Act enacted by parliament relevant for the assessment year involved in these appeals are similar with change of assessment year and rate of income tax. We have reproduced above the relevant portion of the Finance (No. 2) Act, 2004. As per Section 2 (1) of the Finance Act, income tax shall be charged at the rates specified in Part I of the First Schedule. Clause (a) of the Sub-section 12 of Section 2 of the Finance Act also defines the words "domestic company" similar to the definition given in Section 2 (22A) of the Act, 1961. Paragraph (E) of the First Schedule to the Finance Act prescribes rates of income tax for companies. It has classified "companies" in two categories. The first category is "domestic company". The second category is "Company other than a domestic Company". Undisputedly the appellant's compan....
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....truction is more consistent with the alleged object and policy of the Act. 25. At the outset, we must clarify the position of "plain meaning rule or clear and unambiguous rule" with respect to tax law. "The plain meaning rule" suggests that when the language in the statute is plain and unambiguous, the court has to read and understand the plain language as such, and there is no scope for any interpretation. This salutary maxim flows from the phrase "cum inverbis nulla ambiguitas est, non debet admitti voluntatis quaestio". Following such maxim, the courts sometimes have made strict interpretation subordinate to the plain meaning rule [Mangalore Chemicals and Fertilisers Ltd. v. CCT, 1992 Supp (1) SCC 21], though strict interpretation is used in the precise sense. To say that strict interpretation involves plain reading of the statute and to say that one has to utilise strict interpretation in the event of ambiguity is self-contradictory. 29. We are not suggesting that literal rule dehors the strict interpretation nor one should ignore to ascertain the interplay between "strict interpretation" and "literal interpretation". We may reiterate at the cost of repetition....
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.... justified to conclude and also compelled to hold that every statute including, charging, computation and exemption clause (at the threshold stage) should be interpreted strictly. Further, in case of ambiguity in charging provisions, the benefit must necessarily go in favour of subject/assessee, but the same is not true for an exemption notification wherein the benefit of ambiguity must be strictly interpreted in favour of the Revenue/State." 16. In V.O. Tractoro Export, Moscow vs. Tarapore & Company & Anr. (1969) 3 SCC 562 (Para 15 and 16) a Three Judges Bench of Hon'ble Supreme Court held, as under:- "15. Now, as stated in Halsbury's Laws of England, Vol. 36, p. 414, there is a presumption that Parliament does not assert or assume jurisdiction which goes beyond the limits established by the common consent of nations and statutes are to be interpreted provided that their language permits, so as not to be inconsistent with the comity of nations or with the established principles of International law. But this principle applies only where there is an ambiguity and must give way before a clearly expressed intention. If statutory enactments are clear in meaning, they m....
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.... (2) of the DTAA:- 18. Undisputedly the DTAA between India and Netherland was entered into by the government of India in exercise of powers conferred under Section 90 of the Act, 1961 Article 24 (2) of the DTAA between India and Netherlands reproduced below;- "2. Except where the provisions of paragraph 3 of Article 7 apply, the taxation on a permanent establishment which an enterprise of one of the States has in the other State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities." 19. Explanation to Section 90 is part of Section 90. The Explanation itself starts with the words "for the removal of doubts". "Explanatory notes on the provision of the Finance Act of 2001" afore-quoted, states that the explanation has been inserted in Section 90 of the Income Tax Act to clarify that the charge of tax in respect of foreign company at a rate higher than the rate at which a domestic company is chargeable, shall not be regarded as less favourable charge or levy of tax in respect of such foreign company, where such foreign company has not made the prescribed arrangement for declara....
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....sions are retrospective in operation. In Keshawlal jethalal Shah vs. Mohanlal Bhagwandas and Anr. AIR 1968 SC 1336 a Constitution Bench of Hon'ble Supreme Court held that "an Explanatory Act is generally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous Act". 21. Explanation to Section 90 of the Act, 1961 read with "explanatory notes" makes, it absolutely clear that the Explanation to Section 90 is clarificatory. The said Explanation has merely reiterated the clear statutory provision for rate of tax emerging from Section 2 (22A), 2 (23A) of the Act 1961 read with Section 2 (1) and Section 2 (12) (a) of the Finance Act and Paragraph E of Part I of the First Schedule to the Finance Act which we have discussed in earlier paragraphs. That apart even without the said Explanation to Section 90 of the Act 1961, the statutory provision for rate of tax applicable to a company like the appellant which is not a domestic company, it remained clear at all relevant point of time that the appellant company being not a "domestic company" is liable to tax on its income in India at the rate specified for a "company other than a domestic company." 22.....
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....r of law in the findings recorded by the ITAT in the impugned order (in paragraph 52 to 56 of the impugned order) that explanation to Section 90 is not in conflict with the provision of DTAA and that there is no conflict between the provision of the DTAA and the Income Tax Act 1961 in regard to non-discrimination. Effect of circular number 333 dated 02.04.1982 issued by CBDT and the letter of the CBDT dated 21.11.1945;- 26. The Circular No. 333 dated 02.04.1982 has been reproduced by the ITAT in paragraph 51 of the impugned order. We have perused the aforesaid circular of the CBDT. For ready reference para 2-3 of the aforesaid circular no. 333 dated 02.04.1982 issued by CBDT is reproduced below;- "2. The correct legal position is that where a specific provision is made in the double taxation avoidance agreement, that provision will prevail over the general provisions contained in the Income Tax Act, 1961. In fact the Double Taxation Avoidance Agreements which have been entered into by the Central Government under Section 90 of the Income-tax Act, 1961, also provide that the laws in force in either country will continue to govern the assessment and taxation of income ....
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.... issued in exercise of power conferred under Section 119 of the Income Tax Act, 1961. That apart the said letter is in conflict with plain and unambiguous provisions of the Act 1961 and the Finance Act which we have discussed above. That apart the opinion expressed in the aforesaid letter was also changed even before the Explanation was inserted. We also find ourselves in agreement with the reasons recorded by the ITAT in paragraph 59 of the impugned order. Accordingly we hold that the said letter cannot overwride the plain and unambiguous provision of the Act, 1961 and the Finance Act. Some Important judgements on DTAA and Section 90 of the Act of 1961:- 30. In Union of India and Anr. Vs. Azadi Bachao Andolan and Anr. 2004 10 SCC 1 Hon'ble Supreme Court considered various aspects relating to treaties/DTAA, (paragraph 28 & 32) held as under:- "28. A survey of the aforesaid cases makes it clear that the judicial consensus in India has been that Section 90 is specifically intended to enable and empower the Central Government to issue a notification for implementation of the terms of a Double Taxation Avoidance Agreement. When that happens, the provisions of such an agr....
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....ional Taxation) New Delhi VS. Nestle SA 2023 SCC OnLine SC 1372 (paragraph 42 and 49) held as under ;- "42. In the judgment reported as V.O. Tractoroexport v. Tarapore & Co this court underlined that- "16. We may look at another well-recognised principle. In this country, as is the case in England, the treaty or International Protocol or convention does not become effective or operative of its own force as in some of the continental countries unless domestic legislation has been introduced to attain a specified result. Once, Parliament has legislated, the Court must first look at the legislation and construe the language employed in it. If the terms of the legislative enactment do not suffer from any ambiguity or lack of clarity they must be given effect to even if they do not carry out the treaty obligations. But the treaty or the Protocol or the convention becomes important if the meaning of the expressions used by the Parliament is not clear and can be construed in more than one way. The reason is that if one of the meanings which can be properly ascribed is in consonance with the treaty obligations and the other meaning is not so consonant, the meaning which i....
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....te; at the worst, if they cut down the plain meaning of a statute, or fly on the face of their express terms, they are to be ignored." (Emphasis supplied) 33. We further find that Section 2 (17) defining the word "Company", Section 2 (22A) defining the word "Domestic Company", Section 2 (23A) defining the word "Foreign Company" and Section 90 of the Act 1961 read with Explanation and Section 2 (1), Section 2 (12) (a), Paragraph 'E' of the First Schedule to the Finance Act are plain, unambiguous and leads only to one conclusion that two class of companies namely "Domestic Company" and "Company other than a Domestic Company" are liable to tax at the prescribed rates. When the words used in aforesaid provisions are clear, plain and unambiguous and admits only one meaning, the court is bound to give effect to the words used in the aforesaid provisions, in their natural and ordinary sense. Since the words used are capable of one construction, therefore, it is not open for the court to adopt any other construction. It is well settled that in a taxation statute, there is no room for any intendment; that regard must be had to the clear meaning of the words and that the matter s....