DR. B.P. Saraf, J.

1. By this reference under section 256(1) of the Income Tax Act, 1961, made at the instance of the Revenue, the Income Tax Appellate Tribunal has referred the following question of law to this court for the opinion :

"Whether, on the facts and in the circumstances of the case, the non-compliance with condition of filing of audit report is fatal to given relief to the assessee under section 80J(6A) "

2. The facts of the case, relevant for the purpose of determination of the controversy raised in the above question, are as under :

The assessee is a registered partnership firm. The business of the firm is of "manufacture of electronics and electrical equipment, etc." In its return for the assessment year 1976-77, it claimed deduction of a sum of Rs. 2,272 under section 80J of the Income Tax Act, 1961 ("the Act"). A similar deduction of an amount of Rs. 9,096 was claimed during the assessment year 1977-78. This claim of the assessee was allowed by the Income Tax Officer for both the assessment years. However, on a perusal of the records of assessment, the Commissioner of Income Tax ("the Commissioner"), being of the opinion that the order of the Income Tax Officer was erroneous and prejudicial to the interests of the Revenue in so far as it related to the allowance of deduction under section 80J of the Act, initiated suo motu revision proceedings under section 263 of the Act and on hearing the assessee, set side the orders of the Income Tax Officer for both the assessment years in so far as they pertained to the allowance of the claim of the assessee under section 80J. Against the order of the Commissioner, the assessee appealed to the Income Tax Appellate Tribunal ("the Tribunal"). The Tribunal considered the contentions of the assessee in regard to its claim for deduction under section 80J from various angles. The Tribunal took note of the admitted position that no audit report in Form No. 10-D, as required by section 80J(6A) of the Act, had been filed by the assessee. It was, however, of the opinion that if an assessee fails to the assessee. It was, however, of the opinion that if an assessee fails to file an audit report as required by section 80J, the Income Tax Officer should give him an opportunity to file the same. The Tribunal was also of the opinion that in compliance with the requirements of the principles of natural justice and fairness, the Commissioner of Income Tax ought to have given an opportunity to the assessee to file the audit report as required under section 80J. Accordingly, the case was remitted to the Commissioner with a direction to give an opportunity to the assessee to file the audit report and consider the claim for deduction under section 80J on the basis thereof. Hence, this reference at the instance of the Revenue.

3. Sub-section (6A) of section 80 of the Act, as it stood at the material time, reads :

"(6A) Where the assessee is a person other than a company or a co-operative society, the deduction under sub-section (1) from profits and gains derived from in industrial undertaking shall not be admissible unless the accounts of the industrial undertaking 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-section (2) of section 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."

4. This sub-section was inserted by the Finance Act, 1975, with effect from April 1, 1976, and applies to the case of the assessee which pertains to the assessment years 1976-77 and 1977-78. This sub-section makes the admissibility of deduction under sub-section (1) of section 80J of the Act subject to the fulfilment of the conditions mentioned therein. These conditions are :

(i) the accounts of the industrial undertaking for the previous year relevant to the assessment year for which the deduction is claimed by the assessee are audited by an accountant, as defined in the Explanation below sub-section (2) of section 288 of the Act, and

(ii) 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.

5. There is no dispute about these two conditions. The only controversy is in regard to the nature of these conditions - whether these are mandatory or directory. So far as the first condition of "audit" is concerned, we do not find any difficulty in holding that this condition, on the face of it, is mandatory, i.e., unless the accounts are audited by an accountant as defined in this sub-section, no deduction under sub-section (1) would be admissible. Difficulty, however, does arise in deciding the true nature of the second condition which requires the assessee to furnish such audit report in the prescribed form "along with the return of income". The question that falls for determination is whether it is mandatory or directory. We have carefully considered the controversy. The legislative intention appears to be clear. It was the desire of the Legislature that the audit report should be filed along with the return of income. There is no doubt in that regard. But no consequence of non-filing of the same along with the return in the prescribed manner has been specified. The question that arises is whether non-filing of the audit report along with the return is fatal to the claim of the assessee for deduction or whether the audit report can be filed even after filing of the return and accepted by the Income Tax Officer for the purpose of consideration of the claim of the assessee for deduction under section 80J(1) of the Act. It is well-settled that the question whether a statute is mandatory or directory depends upon the intent of the Legislature and not upon the language in which the intent is clothed. The intent of the Legislature also has to be gathered not merely from the words used by the Legislature but from a variety of other circumstances and conditions. One of the tests often adopted is to ascertain whether the object of the Legislature will be defeated or furthered by holding it directory. If the object of the enactment will be defeated by holding it directory, it should be construed as mandatory whereas if by holding it mandatory, serious general inconvenience will be created to innocent persons without very much furthering the object of the enactment, it should be construed as directory. In other words, a balance has to be struck between the inconvenience of rigidly adhering to the requirements and the convenience of sometimes departing from its terms. There are also cases where two or more requirements are lumped together at one place in the same provision. In such a case, it would have to be decided which of the conditions is mandatory and which is directory. If one of the two conditions is found to be mandatory and the other directory, strict compliance with the mandatory requirement would amount to compliance with the provision notwithstanding the non-compliance with the directory requirement in the particular manner or form or within the specified time, provided, however, that there is substantial compliance therewith. It is not possible to lay down any rule of universal application to decide such a controversy. It will have to be decided in each case by looking at the subject-matter, the importance of the provision that has not been strictly complied with and the relation of that provision to the general object intended to be secured by the Act.

6. We may now examine the requirements of sub-section (6A) of section 80J in the light of the above discussion. As earlier stated, sub-section (6A) lays down two conditions which should be fulfilled in order to get the benefit of deduction under section 80J. The first condition is that the accounts should be audited by an accountant. His condition, as stated earlier, is mandatory. So far as the second condition which requires the assessee to furnish the report along with the return to the Income Tax Officer is concerned, we feel that for the purpose of determining whether it is mandatory or directory, it can be further sub-divided into two : (i) the assessee should furnish to the Income Tax Officer a report of the accountant who had audited the accounts in the prescribed form, duly signed and verified by such accountant; (ii) such report should be filed along with the return of income. The first requirement of filing of the report again appears to be mandatory. Failure to file the same is fatal. But that is not so in so far as the requirement of filing it along with he return is concerned. If, in a given case, an assessee fails to file such report along with he return and files it subsequently but before completion of the assessment, it would not be fatal to the claim of the assessee and he Income Tax Officer will have the power to accept the same if he is satisfied that the delay in filing the same was for good and sufficient reasons. This, however, does not mean that an assessee, as a matter of right, can submit such report at any time before the completion of assessment and if it is so submitted, the Income Tax Officer is bound to accept the same. Such an interpretation, in our opinion, will amount to substituting the words "along with the return" in sub-section (6A) by the words "at any time before he completion of the assessment" which is not a permissible mode of interpretation of statutes. We are, therefore, of the opinion that the requirement of filing of the audit report "along with the return" is not mandatory in the strict sense of the term. It is directory in the sense that even if it is not submitted along with the return but subsequently before the completion of assessment, the Income Tax Officer will have the power to accept the same if he is satisfied with the explanation of the assessee for non-filing of the same along with the return. In that view of the matter, we hold that the requirement of filing the report "along with the return" is directory and if the assessee submits such report even after filing of the return but before completion of the assessment, he Income Tax Officer may accept he same if he is satisfied that there was sufficient cause for non-filing of the same along with the return.

7. The contention of the learned advocate for the Revenue is that in the instant case, it is admitted the position that the audit report was neither filed by the assessee along with the return nor at any time thereafter even at the time of assessment. There is even nothing to show that the accounts were audited as required by sub-section (6A). There was, thus, a total non-compliance with all the requirements of sub-section (6A). In such a situation, the Income Tax Officer could not have allowed the claim of the assessee for relief under section 80J of the Act which he did in complete disregard of the requirements of sub-section (6A). The Commissioner, in exercise of his power of suo motu revision under section 263 of the Act, rightly revised the order of the Income Tax Officer as, in his opinion, it was erroneous and prejudicial to the interests of the Revenue. We find force in the above submission. We do not find any error in the action of the Commissioner. The Commissioner did peruse the record of the case to see whether, on the basis of the records, the order of the Income Tax Officer was erroneous or not. He found it to be erroneous. This finding of the Commissioner, in any view of the matter, cannot be said to be wrong having regard to the admitted position that no audit report had been filed even at the time of completion of the assessment. The allowance of rebate under section 80J of the Act by the Income Tax Officer was patently wrong and in complete disregard of the requirements of sub-section (6A) of section 80J of the Act. The Tribunal was, therefore, not justified in such a case in interfering with the order of the Commissioner and sending the matter back to the Commissioner with a direction to give an opportunity to the assessee to file the audit report in the name of the principles of natural justice. Learned counsel for the assessee submits that if the assessee had failed to submit the audit report, it was only a mistake on his part and it was the duty of the Income Tax Officer to point out the same to the assessee and give him an opportunity of rectifying it by filing the same which the Income Tax Officer failed to do. In such a case, the Commissioner, acting in exercise of the powers under section 263 of the Act, while setting aside the order should have directed the Income Tax Officer to give such an opportunity to the assessee. According to counsel for the assessee, in such a situation, the Tribunal was justified in directing the Commissioner to do so. Reliance is placed in support of this contention on the decision of the Calcutta High Court in CIT v. Hardeodas Agarwalla Trust : [1992]198ITR511(Cal) and CIT v. Rai Bahadur Bissesswarlal Motilal Malwasie Trust : [1992]195ITR825(Cal) . We have carefully considered the submission of learned counsel for the assessee. We find it difficult to accept the same because, in our opinion, doing so will amount to exonerating the assessee from the obligation cast on him by the statute and imposing a duty on the Income Tax Officer which has not been imposed by the statute to ask the assessee to do something which he is obliged to do if he wants to avail of a certain benefit granted by the statute. When the Legislature casts a duty on the assessee claiming a certain benefit, to comply with requirements which are associated with such benefit, the assessee cannot get the benefit without doing his part of the duty. He cannot be allowed to say that it was for the Income Tax Officer to ask him to do so. If the assessee does not do his part of the statutory duty, the Income Tax Officer may proceed to decide the allowability or otherwise of the relief on the basis of the facts and material available before him. It will be contrary to the language of sub-section (6A) of section 80J to cast an obligation on the Income Tax Officer to ask the assessee to do his duty and to comply with the statutory requirements, whether directory or mandatory on the pretext of complying with the principles of natural justice. The principles of natural justice cannot be stretched that far to lead to such absurd results. The position may, however, be different where an assessee does a particular act not within the specified time but after the expiry thereof and makes an application for condonation of delay. In such cases, depending on the language of the statute and the object sought to be achieved by prescribing the time limit, it would be the duty of the Officer to consider the documents submitted even belatedly, if there is reasonable explanation for the delay. We are, therefore, of the clear opinion that no duty is cast on the Income Tax Officer to ask an assessee, who has failed to file the report of the audit, to do so before rejecting his claim for relief under section 80J of the Act.

8. Learned counsel for the assessee referred to the decision of the Gujarat High Court in CIT v. Gujarat Oil and Allied Industries : [1993]201ITR325(Guj) . In that case, the audit report was filed by the assessee not before the Income Tax Officer but before the appellate authority, who refused to admit the same. But, on further appeal, the Tribunal directed that the same be considered as an additional evidence. The ratio of the above decision has no application to the facts of the present case. Here there is nothing on record even to show that the accounts of the assessee were audited.

9. Learned counsel for the Revenue, Mr. Jetley, relied on a decision of the High Court of Punjab and Haryana in CIT v. Jaideep Industries : [1989] 180 ITR 81 [LQ/PunjHC/1989/383] , in support of his contention that the requirement is mandatory and non-filing of the audit report along with the return will be fatal to the claim of the assessee. For the reasons set out above, we respectfully disagree with the above decision.

10. In the result, we answer the question referred to us as follows :

The requirement of filing the audit report along with the return of income" is directory and if the assessee complies with the same before completion of the assessment and offers a satisfactory explanation for his failure to submit the same in time, the Income Tax Officer may consider the same and examine the claim of the assessee for deduction under section 80J on the basis of such report. We, however, do not subscribe to the view taken by the Tribunal that it is the duty of the Income Tax Officer to tell the assessee that as he had not submitted the report of audit required by sub-section (6A), his claim would not be allowed and to give him an opportunity to the file the same.

11. The question referred to us by the Tribunal is accordingly answered in the above terms i.e. against the assessee and in favour of the Revenue

12. There shall be no order as to costs.