TaxTMI 
TaxTMI 
2006 (9) TMI 120
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....petitioner by deleting the additional tax charged under section 143(1A) of the Act and setting aside the disallowance of development allowance. The Revenue, thereafter, preferred an appeal before the Income-tax Appellate Tribunal in I.T.A. No. 217 (Gau) of 1996 and vide impugned order, the Tribunal held that the appellant is entitled to development allowance for the amount for which certificate in Form No. 5 is subsequently furnished. The Tribunal, however, held that the assessing authority was right in resorting to the provisions of rule 143(1)(a) to levy additional tax. The substantial questions of law raised before us are: "(1) Whether the provisions of section 33A read with rule 8A are mandatory or directory in nature? (2) Whether, on the facts and circumstances of the present case, the assessing authority was justified in invoking the provisions of sections 143(1)(a) and 143(1A) of the Act?" Dr. Saraf, learned senior counsel appearing for the appellant, has submitted that the impugned order passed by the Tribunal is contradictory. The appellant had filed the certificate in Form No. 5 at the time of assessment wherein the required certificate was given by the Tea Board for ....
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....f which a provision is to be held to be mandatory or directory are beyond controversy. In the ultimate analysis it is the intention of the Legislature or the rule-making authority which has to prevail. The language used in the provision is important but may not be decisive. For example, use of the word 'shall' though ordinarily taken in a mandatory sense, does not necessarily mean that in every case it shall have that effect and the word 'may' cannot always be taken to have been used in the directory sense. The object and the scheme of the statute or the statutory rules must be taken in the consideration. The interpretation must be such as to carry forward the object of the statute; of course, to the extent it is reflected in a particular provision. No provision is to be regarded in isolation. Every provision must be considered in its setting as part of the scheme. A statute is ordinarily enacted to avoid a mischief or to secure benefit. The court must have regard to the mischief sought to be overcome by the State. A statutory provision must ordinarily be interpreted in a manner so as to help the avoidance of the mischief. Regard must be had to the object of the particular provisio....
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....g line of distinction may be drawn between cases where the prescription of the Act affect the performance of a duty and where they relate to a privilege or power. Where powers, rights or immunities are granted with a direction that certain regulations, formalities or conditions shall be complied with, it seems neither unjust nor inconvenient to exact a rigorous observance of them as essential to the acquisition of the right or authority conferred, and it is therefore, probable that such was the intention of the Legislature. But when a public duty is imposed and the statute requires that it shall be performed in a certain manner, or within a certain time, or under other specified conditions, such prescriptions may well be regarded as intended to be directory only in cases when injustice or inconvenience to others who have no control over those exercising the duty would result if such requirements were essential and imperative." In the case of Khub Chand v. State of Rajasthan, AIR 1967 SC 1074, the apex court observed: "The provision is mandatory in terms. Doubtless, under certain circumstances, the expression 'shall' is construed as 'may'. The term 'shall' in its ordinary signific....
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....ance cannot be denied to an assessee who had failed to file the required certificate along with the return but it filed the same at the time of assessment. There cannot be, however any scope for doubt that filing of the certificate in Form No. 5 is a must for getting the benefit under section 33A in view of the provisions of rule 8A. Now, coming to the second question raised before us we find that in the instant case, the assessing authority invoked the provisions of section 143 as the assessee failed to produce the certificate in Form No. 5. Clause (iii) of the first proviso to section 143(1)(a) of the Act provides that the Assessing Officer can make an adjustment to the income or loss declared, if on the basis of the information available, the deduction, allowance or relief claimed prima facie is admissible. In the case of R.K. Gyankishore Singh v. Asst. CIT [2003] 261 ITR 107 (Gauhati); [2003] 2 GLR 86, the matter related to claim of deduction in respect of interest payable/paid. The deductions were disallowed by the assessing authority on the ground that though interest was payable, it is not paid by the assessee. This court observed that the question whether interest was pai....