2015 (1) TMI 395

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....owing the deduction especially when the assessee has not filed audit report in Form 10CCB along with the return nor before the date of completion of the assessment? 2. The learned counsel for the respondent entered appearance and pointed out that the question of law raised in this appeal has been considered by this Court in a catena of decisions and it was held that filing of of audit report in Form 10 CCB is not mandatory and only directory. 3. An identical issue was considered by this Court in Commissioner of Income Tax v. AKS Alloys (P) Ltd., (2012) 18 Taxmann.com 25 (Mad), wherein this Court after referring to a number of judicial precedents held that filing of audit report along with the return was not mandatory, but directory, and t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....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 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....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....on 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 Haryana Court in Punjab Financial Corporations 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 9....