TMI Blog2006 (9) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to claim deduction and the assessee is not liable to pay additional tax under section 143(1)(a). - - - - - Dated:- 12-9-2006 - Judge(s) : P. G. AGARWAL., SMT. A. HAZARIKA. JUDGMENT The judgment of the court was delivered by P.G. Agarwal J.-This is an appeal under section 260A of the Income-tax Act, 1961 (for short "the Act"), preferred by George Williamson (Assam) Ltd. (hereinafter referred to as the "appellant"). The facts The appellant-company filed its return of income on December 31,1990, showing a total income of Rs. 4,95,23,780 for the assessment year 1990-91. The appellant had claimed a development allowance of Rs. 12,27,532 under section 33A. The assessing authority disallowed the said claim of the appellant for lack of certificate from the Tea Board in Form No. 5 as required under section 33A read with rule 8A of the Income-tax Rules. The assessing authority also made an adjustment under section 143(1)(a) of the Act. The appellant preferred an appeal before the Commissioner of Income-tax (Appeals) and the appellate authority granted the relief to the petitioner by deleting the additional tax charged under section 143(1A) of the Act and setting aside the dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a statement of particulars in Form No. 5A." Mr. Bhuyan, learned counsel appearing for the Revenue has submitted that in view of the language used in section 8, clause (d) of rule 8A, the provisions are mandatory in nature and the assessee is required to submit the certificate from the Tea Board in Form No. 5 along with the return and in the case of its failure to do so, the assessing authority can take recourse to the provisions of section 143(1)(a) of the Act. The law is more or less settled by the catena of decision of the apex court that the term "shall" need not in all contexts, circumstances and situations be treated as indicative of a mandatory nature. At times, the word "shall" may be read as "may" whereas in some context, the word "may" may be read as "shall" and it depends on the intention of the Legislature as well as the context in which words are used. A Special Bench of this court in the case of Bijoy Kr. Choudhury v. State of Assam [1992] 2 GLR 283 had the occasion to consider the question raised before us and this court held: "21. The general rules on the basis of which a provision is to be held to be mandatory or directory are beyond controversy. In the ulti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner in which public officials shall exercise the power vested in them will generally be construed as directory. As a general rule a statute specifying a time limit for performance of an official duty will so far as that time for performance is concerned be understood as having done so merely for convenience or orderly procedure. This is particularly so where the performance of the act has nexus with the interests of the public. The importance of the particular provision in relation to the general object intended to be secured and the mischief, if any, sought to be prevented, and the remedy provided by the Act are also to be borne in mind. In final analysis it is the substance which counts and must take precedence over mere from." Dr. Saraf has placed reliance on a decision of the hon'ble Kerala High Court in the case of CIT v. Malayalam Plantations Ltd. [1976] 103 ITR 835, wherein a similar view was taken by the hon'ble Kerala High Court and reference was made to Maxwell's observations at page 364 in his treatise on Interpretation of Statutes. The learned author observed: "A strong line of distinction may be drawn between cases where the prescription of the Act affect the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtificate is not filed along with the return. The matter may be given a liberal approach and the benefit may be extended to the assessee, if he succeeds in producing the required certificate at the time of assessment. Dr. Saraf has also drawn our attention regarding special deduction available to the export unit as provided under section 80HHC wherein supporting documents are required to be filed along with the return of income to claim the deductions. The provisions contained in sub-section (4A) of section 80HHC of the Act, which are identical to rule 8A are held to be directory in nature by the hon'ble Kerala High Court in the case of CIT v. G. Krishnan Nair [2003] 259 ITR 727. In the present case, we find that even the Tribunal had allowed the benefit to the assessee to the extent of the amount mentioned in the certificate furnished later on by the assessee which goes to show that the Tribunal was also of the view that the provisions of rule 8A are directory in nature. We, therefore, hold that the above provisions of rule 8A are directory in nature and the benefit of development allowance cannot be denied to an assessee who had failed to file the required certificate along ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e entire books of account or other documents, and it is not the law that, in support of a claim made in the return for deduction or non-taxability of a receipt, all the proof available and original documents must be filed along with the return. The stage of furnishing of the proof is reached as and when proof is demanded by the Assessing Officer on a notice under section 143(2) being issued. If no proof in support of the claim is available with the Assessing Officer on the return, accounts or documents filed by the assessee, he can issue a notice under section 143(2); but he cannot unilaterally make a disallowance by seeking to invoke the provisions of the first proviso to section 143(1)(a)." We, therefore, hold that an adjustment under section 143(1)(a) can only be made where the claim, prima facie, is inadmissible and not in the cases, where proof is required to establish the claim. Coming to the facts of the case, we find that the required certificate in Form No. 5 from the Tea Board was later on submitted and it was accepted by the Tribunal to the extent of the amount mentioned therein and as such the provisions of the first proviso to section 143(1)(a) were not attracted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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