9911796707
TMI Blog2006 (2) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 relevant assessment year is 1988-89. The assessee is a registered firm. While computing the income for the assessment year 1988-89, the Assessing Officer wrongly allowed the deduction for a sum of Rs. 3 lakhs under section 32AB. But, the Commissioner of Income-tax rectified the mistake under section 263 of the Income-tax Act and directed the Assessing Officer to complete the same after withdrawing the investment allowances granted to the tune of Rs. 3 lakhs. Hence, the assessee preferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 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 of estoppel does not admit of much argument: (vide Director of Inspection of Income-tax (Investigation) v. Pooran Mall and Sons [1974] 96 ITR 390 (SC)). (ii) that the use of the word "shall" in a statutory provision, though generally taken in a mandatory sense, does not necessarily mean in every case it shall have that effect, that is to say that unless the words of the statute are punctiliously followed, the proceeding or the outcome of the proceeding would be invalid. On the other hand, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the report is not filed along with the return, otherwise, the very purpose of section 32AB(5) would be defeated. If that be so, section 32AB(5) cannot be construed to give such an incongruous result. Therefore, to make section 32AB(5) of the Act constitutionally valid, the only alternative or workable solution is that the audit report should be made available before the assessment is made : (vide K.P. Varghese v. ITO [1981] 131 ITR 597 (SC) and followed in CIT v. A.N. Arunachalam [1994] 208 ITR 481 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Haryana Court in Punjab Financial Corporation's case [2002] 254 ITR 6 referred to supra, has thus arrived at the conclusion that filing of audit report is directory, but not mandatory, based on the rule of interpretation, with reference to the fiscal statute in the matter of imposing penalty, formulated by the apex court, in State of U.P. v. Manbodhan Lal Srivastava, AIR 1957 SC 912, wherein it has been held as under: "All the parts of a statute or section must be construed together and every clause o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
