What is the significance of inserting “Explanation”?
As will be evident from various amendments carried out through the Finance Bill 2010, off late, in many cases, amendments made in the statutes in the recent past have misfired. The courts have interpreted these amendments in such a way that it does not achieve the desired objective of the Government. According to the Revenue, these rulings are not in tandem with the thinking of the policy-makers. Therefore, as a safeguard, the draftsmen have started making extensive use of Explanation under the main provision with the idea of clarifying the intention behind the statutory provisions. This is done with the idea that the substantial provision in the statute will be interpreted by the Court on the expected line.
