TMI Blog2006 (2) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... . JANARTHANA RAJA. JUDGMENT The judgment of the court was delivered by P.D. Dinakaran J.- The above tax case appeal is directed against the order of the Income-tax Appellate Tribunal in I.T.A. No. 3188/Mds/1992 dated March 27, 2002, raising the following substantial question of law. "Whether, on the facts and in the circumstances of the case the Income-tax Appellate Tribunal was right in law in setting aside the order of the Commissioner of Income-tax passed under section 263 of the Income-tax Act, even though the assessee has not fulfilled the mandatory requirement as per the provisions of section 32AB(5) of the Income-tax Act to get deduction under section 32AB of the Act?" The brief facts of the case are stated as follows: The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be read in, nothing is to be implied. One can only look fairly at the language used: vide Cape Brandy Syndicate v. IRC [1921] 1 KB 64, 71 referred to with approval in CIT v. Ajax Products Ltd. [1965] 55 ITR 741, 747 (SC). It is not every provision of a taxing statute that will fall under the rule of strict interpretation. The question whether a certain provision of law is directory does not fall to be decided on different standards because it is found in a taxing statute. There is no rule that every provision in a taxing statute is mandatory. The strict construction that a citizen does not become liable to tax unless he comes within the specific words of a statute is a different proposition. That a person cannot be taxed on the principle o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of section 32AB as well as corresponding section 80J(6A) of the Act, it is a trite law that: (i) since there is no stipulation as to the time when the audit report should be filed, except that it should be filed along with the return, all that the assessee is required to do is to delay the filing of the return until the audit report is made available. The ground relied on that the preparation of the audit report was beyond the control of the assessee and hence, the assessee could justifiably delay in filing the return itself so that it is accompanied by the audit report, should also be taken care of while construing the statute constitutionally valid. In such event, the Income-tax Officer could not deny the deduction merely because t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and the Assessing Officer has discretion to entertain the audit report, even though it has not been filed with the return and give benefit of the deduction to the assessee in terms of section 32AB(1). The Full Bench, while so holding that the filing of the audit report is not mandatory, has observed that the question as to whether a statute is mandatory or directory depends upon the intent of the Legislature and not upon the language in which the intent is clothed. The meaning and intention of the Legislature must govern not only from the phraseology of the provision, but also by considering its nature, its design and the consequences, which should follow from construing it one way or the other; (iii) the Full Bench of the Punjab and Ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as a sufficient compliance with the condition contemplated under section 80J(6A); (v) again, in a recent decision of this court in CIT v. Jayant Patel [2001] 248 ITR 199, while interpreting the corresponding section, viz. 80J, which also requires the audit report to be filed along with the return, held that the requirement that the audit report should be furnished along with the return is only directory and not mandatory. In view of the well-settled principles uniformly held in the decisions cited supra, we have no hesitation to hold that the filing of the audit report along with the return, as contemplated under section 32AB(5) of the Act, is only directory and not mandatory. Hence, finding no substantial question of law arising for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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