085-NLR-NLR-V-73-THE-COMMISSIONER-OF-INLAND-REVENUE-Appellant-and-A.-S.-NAVARATNARAJAH-Respo.pdf
WEERAMAXTRY, J.—Commissioner of Inland Revenue v. Kava rat no rajah 465
Present: Sirimane, J., and Weeramantry, J.
THE ODnilSSIONER OF INLAND REVENUE,Appellant, and A. S. NAVARATNARAJAH,
Respondent
5. C. 1/6S—Income Tax No. BRAJ343
Income Tax Ordinance (Cap. 242)—Section IS (/) (e)—Claim for relief thereunder—Relative maintained by assessee in an educational establishment—Cleaning ofword “ n aintained ”—Whether dependant's physical residence inside theeducational establishment is a pre-condition for relief.
Soction 18 (1) (e) of the Incomo Tax Ordinance provides that “ an individualresident in Coylon shall be entitled to claim for any year of assessment thatt-lio following allowance be deducted from his assessable incotno in arrivingat his taxable incomo :—an allowance of two hundred and fifty rupees in respectof oach such rolativo of his or of his wifo as, throughout the year preceding thoyoar of assessment, either lived with him and was maintained by him or wasmaintained by him in any sanatorium, asylum or educational establishment.”
Held, that an assossoe may bo said to havo maintained a relative of his in aneducational establishment within the moanning of section IS (1) (e) even if thodependant resided physically at a place away from the educational establishmentwhore he received his education.
VOASE stated for the opinion of the Supreme Court under the provisionsof section 78 (1) of the Income Tax Ordinance.
Mervyn Fernando, Crown Counsel, for the Commissioner of InlandRevenue, appellant.
S. Ambalacanar, with K. Nadarajah and W. //. Perera, for the assessee-respondent.
Cur. adv. vult.
July 15, 1969. Weeramantry, J.—
This is a case stated for our opinion under the provisions of section 7S(1) of the Income Tax Ordinance, and involves the construction of sectionIS (1) (e) of that Ordinance. The relevant years of assessment are195S-59, 1959-60, 1960-61, 1961-62 and 1962-63 and the dependants inrespect of whom relief is claimed are two brothers and a sister of theassessee.
These dependants admittedly lived apart from the assessee who duringthese years held office in the service of Government and was stationedat Puttalam and at Galie. One of the brothers, a medical student,lived at Cotta Road, till he completed his medical education in September
4GGWEERAMAXTKV, J.—Commissioner of Inland Jlevcnue v.
Xavarolnarajah
195S. The other brother lived in the ancestral home at Jaffna, wherehe had his schooling, but lived later in Colombo at premises in DavidsonRoad rented out by the assessee, and continued his education atPembrokeAcademy. The sister likewise had her early education at Jaffna butlater came to Colombo and lived at the same address at Davidson R.oad,and was a student at Navalar Hall. All these persons were, duringthe period of their education, supported by the assessee.
Section 18 (1) (e) offers relief in respect of two categories of persons,namely, those who throughout the year preceding the j'car of assessmenteither (a) lived with the assessee and were maintained by him, or(b) were maintained by him in any sanatorium, asylum or educationalestablishment. The problem confronting us arises under the secondhead of relief inasmuch as the dependants concerned did not live withthe assessee. ,
It is submitted for the Crown that since these three dependants residedat a place away from the educational establishment where they receivedtheir education, they failed to satisfy the condition.of being “ maintained… in .. ■ . an educational establishment ”. It is emphasized
that the word “ in ” conveys the idea of residence within the educationalestablishment' in question. Further, the expression “ educationalestablishment ”, occurring as it does in the context of the words" sanatorium ” and “ asylum ”, should, according to the Crown, beconstrued to mean a residential educational establishment in accordancewith the rule noscilur a soclis, on the footing that an essentialcharacteristic of sanatoria and asylums is their residential nature.
The assessee on the other hand maintains that residence at the educa-tional establishment is not a requisite and that what the second limbcontemplates is support at the educational establishment rather thanphysical residence therein.
I have not been able to trace in the English statutes, nor have counselbeen-able to refer me to, any provision corresponding to that we arenow considering. There is indeed a provision in respect of child reliefcorresponding to section IS (1) (d) of our Ordinance1. This provisionentitles a parent to relief in respect of a child receiving full time instructionat a university, college, school or other educational establishment.On reliefs for educational expenses incurred on dependants, however,the English law would appear to afford us no guidance, and we mustapproach this question as one of first impression.
. The provision we are here construing is one which relieves the taxpayer and there would appear to be authority that in such cases neither
– * 3. 212 11) and (2) of the Income. Tax Act, 1952.
I
WEE RAMAN'TR Y, J.—Commiesioncr of Inland Revenue t’.
Xacarutnarajah
467
the tax payer nor the Crown is entitled to the benefit of a doubt in mattersof construction *. I have not, therefore, in reaching the conclusions setout herein, invoked the usual principle that in the construction of taxingstatutes,-that interpretation most beneficial to the subject should, incases of doubt, be adopted*.
It will be observed that the two alternative heads of relief both containthe word “ maintained In the first limb the requisites for the grantof relief ar^ ia) living with the assessce, and (b) being maintained by him.In the second limb, the requisite is maintenance in an educational establish-ment. Since the word “ maintained ” occurs at two points in the samesentence it would be reasonable to give this expression the same meaningat both places. When the word is first- used it is used in a sense whichdoes not include the element of physical residence, for physical residenceis made a specific additional condition. When therefore the word“ maintained ” is repeated in the second limb of this provision it ispresumably used in a similar sense, that is a sense which docs not includethe aspect of physical residence. The word " maintained ” would thusappear to be used in relation to educational establishments in the senseof being supported therein rather than in the sense of living and beingsupported therein.
The word “ maintain ” when used in the sense of sustenance byproviding necessities of life such as food, clothing and shelter does perhapscarry the implication that the place of maintenance is synonymous withthe place of residence. When in this sense, it is said of a person that heis maintained at a particular place, it would invariably mean also thathe lives at the place mentioned. However the word “ maintain ” isalso used in the sense of supporting a person in a particular state, or, nsthe Oxford Dictionary' puts it, of “paying for the keeping up of” or“bearing the expenses of”. In this sense one speaks of maintaininga student at a University ora young advocate at the bar. In such usesof the word the notion of physical residence at the place of support isnot by any means a necessary implication.
It is true the problem we are faced with would have been easier ofsolution had the word used been “at ” rather than “in” an educationalestablishment, but the word “ in ” by itself is not sufficient, having regardto (lie reasons I have mentioned, to carry the implication that what theLegislature contemplated was the element of physical residence.
The Argument of the Crown based on the rule noscittir a xocii? does notcommend itself to iue.forit can scarcely be said that an essentia] charac-teristic of the words sanatorium and asylum is a residential elementimplicit therein. In modern times it is by no means inconceivable thatoutdoor treatment may be accorded to patients at such institutions :
* U'hcatcroft, The Law of Income Tax, Surtax and Profile Tax. 1037.
1 Maxwell, Interpretation of Statute-1, lltk erf., p. 27S.
468WEERA3IA>TTRY, J.—Commissioner of Inland Revenue i>.
Xn rn raJn a rajnh
and rather than any supposed requirement of residence, theircommon feature seems to be that they accord to the persons undertheir care the type of attention which each such establishment is• specially equipped to provide.
It is necessary finally' to have regard also to the principles underlyingthe grant of relief under section IS (I) (e). When the Legislative carvedout this area of relief it was basically attempting to relieve assessceswho were assisting their dependants to obtain an education. The pre-condition for relief was assistance to a dependant in the form of enablinghim to pursue a course of studies at an educational establishment. TheLegislature’s attitude of assistance and approval to assessces pursuingthis laudable course could scarcely have been negatived by the circum-stance, of little or no materiality in this context, that the dependant hadhis .physical residence apart from his place of education.
• To take an illustration that readily comes to mind, it may well bethat owing to pressure upon the residential facilities of an educationalinstitution 6uch as the University of Ceylon, some students, being unableto find a place in a hall of residence, are obliged to live away from thecampus. Or again, while an educational establishment such as theUniversity of Ceylon at Peradeniy'a lias residential facilities, anothersimilar institution, such as a University at Colombo, may have none.An assessee having two dependants in such institutions, one of whom isin residence and the other is not, would then find himself in the positionof being entitled to claim tax relief in respect of one though not. of theother, merely for the fortuitous reason of the latter’s residence away fromthe campus. Indeed it may well be more expensive to support a depend-ant at a place away from an educational institution,* particularly in acase such as the present where the appellant has had to rent out premisesfor his dependants as his official duties compel his residence away fromColombo. ' •
In the absence of compelling words in the provision we are considering,binding us to an interpretation which has so little to commend it, wewould hesitate to construe this clause as the Crown suggests, and therebylose sight of its essential purpose. Had the Legislature desired to makephysical residence at the educational establishment a pre-condition ofrelief, it could quite easily have so stated, as indeed it has done in theparallel provision contained in section 18 (1) (e).
For all these reasons, I am of the view that the assessee qualifies forthe relief provided in section 18 (1) (e) in respect of the two brothers andthe sister who were hiB dependants.
Amaraaekera t». Ounnpald
409
I therefore answer in the affirmative the question oflaw which has beenstated for our opinion. The j-ears for which relief is available in respectof each dependant will be separately determined in accordance with thefacts of each case.
The respondent will have the costs of this reference, fixed at Rs. 315.
Siuimane, J.—I agree.
Appeal dismissed.