RAJESH BALIA, J. - (1.) HEARD learned counsel for the parties.
(2.) THE substantial question of law which arises for consideration in this case as suggested by the appellant is as under : "Whether, on the facts and circumstances of the case, the Tribunal was right in holding that filing of the audit report under s. 32AB(5) during the assessment proceedings and not along with the return of income would satisfy the requirements of the aforesaid section -
(3.) THE brief facts of the case are that the respondent -assessee had submitted his return declaring total income of Rs. ,67,010. In the return, the assessee had claimed a relief under s. 32AB of the Act of 1961 in respect of Rs. 1,00,000 deposited by him with Development Bank during the previous year relevant to the asst. yr. 1988 -89. The assessee's not furnished along with the return but was furnished later on during the course of assessment proceedings. As the audit report has not been submitted along with the return, the assessee was disallowed the claim to deduction of Rs. 1,00,000 deposited in Development Bank. On appeal, the CIT(A) relying on the decision in CIT vs. Malayalam Plantations Ltd. 1976 CTR (Ker) 81 : (1976) 103 ITR 835 (Ker) which was rendered while considering like provisions under s. 32A regarding deductions in respect of profits and gains from the business of tea and other decisions of the Tribunal, allowed the claim of the assessee for deduction under s. 32AB in respect of deposits made in Development Bank by holding that analogy of the cases under ss. 80J and 33A of the Act of 1961 shows that filing of audit report along with the report has been held to be directory and not mandatory and the benefit was allowed even if the report was filed subsequently. Aggrieved with the aforesaid order, the Asstt. CIT has preferred appeal before the Tribunal and the Tribunal had affirmed the order of the CIT(A), hence, this appeal under s. 260A of the IT Act, 1961. inserting second proviso to sub -s. (1) of s. 32AB vide Finance Act, 1990. Sub -ss. (1) and (5) of s. 32AB laid down the procedure for claiming the deduction under s. 32AB which reads as under : "Sec. 32AB. Subject to the other provisions of this section, where an assessee, whose total income includes income chargeable to tax under the head 'Profits and gains of business or profession', has, out of such income, - - (a) deposited any amount in an account (hereinafter in this section referred to as deposit account) maintained by him with the Development Bank before the expiry of six months from the end of the previous year of before furnishing the return of his income, whichever is earlier; or (b) utilised any amount during the previous year for the purchase of any new ship, new aircraft, new machinery or plant, without depositing any amount in the deposit account under cl. (a), in accordance with, and for the purposes specified in, a scheme (hereinafter in this section referred to as the scheme) to be framed by the Central Government, or if the assessee is carrying on the business of growing and manufacturing tea in India, to be approved in this behalf by the Tea Board, the assessee, shall be allowed a deduction (such deduction being allowed before the loss, if any, brought forward from earlier years is set off under s. 72) of - - (i) a sum equal to the amount, or the aggregate of the amount, so deposited and any amount so utilised; or (ii) a sum equal to twenty per cent of the profits of business or profession as computed in the accounts of the assessee audited in accordance with sub -s. (5), whichever is less : Provided that where such assessee is a firm, or any AOP or any BOI, the deduction under this section shall not be allowed in the computation of the income of any partner, or as the case may be, any member of such firm, AOP or BOI : Provided further that no such deduction shall be allowed in relation to the assessment year commencing on the 1st day (2) xxxxx (3) xxxxx (4) xxxxx (5) The deduction under sub -s. (1) shall not be admissible unless the accounts of the business or profession of the assessee for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant as defined in the Explanation below sub -s. (2) of s. 288 and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form duly signed and verified by such accountant : Provided that in a case where the assessee is required by or under any other law to get his accounts audited, it shall be sufficient compliance with the provisions of this sub -section if such assessee gets the accounts of such business or profession audited under such law and furnishes the report of the audit as required under such other law and a further report in the form prescribed under this sub -section." ;