Subramonian Poti, J.
1. The question referred to this court under Section 256(1) of the Income-tax Act, 1961, by the Income-tax Appellate Tribunal, Cochin Bench, is :
' Whether, on the facts and, circumstances of the case, the Tribunal was right in holding that in order to be entitled to claim development allowance provided in Section 33A of the Income-tax Act, 1961, it is not mandatory, within the meaning of Rule 8A(d) of the Income-tax Rules, 1962, that the assesses should furnish to the Income-tax Officer the certificate from the Tea Board in Form No. 5 along with its return of income itself for the year for which the allowance is claimed '
2. This question arises on the following facts. The reference relates to the assessment for the year 1967-68. The assessee is a plantation company owning tea, coffee and rubber plantations in the States of Tamil Nadu and Kerala. The claim for development allowance was made for the assessment year under Section 33A of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'). Such allowance is permissible only 6n compliance with certain conditions, specified in Sub-section (3) of Section 33A of the Act. Clause (iii) of Sub-section (3) of Section 33A refers to the conditions to be fulfilled in order to claim deduction under Sub-section (1) of Section 33A as-
' such other conditions as may be prescribed '.
3. Rule 8A of the Income-tax Rules, 1962 (in short, ' the Rules ') prescribes those conditions. Rule 8A of the Rules runs :
' 8A. The other conditions referred to in Clause (iii) of Sub-section (3) of Section 33A shall be the following, namely :
(a) the assessee shall, at least three months before commencing the operations for planting or, as the case may be, replanting tea bushes, give notice of his intention to do so to the Tea Board in writing in Form No. 4 : Provided that in a case where such operations have commenced before the 1st day of January, 1968, this condition shall be deemed to have been fulfilled if notice of such commencement is given by the assessee before the 1st day of February, 1968 ;
(b) the assessee shall afford the Tea Board or such other person or agency as may be authorised in writing by the Tea Board in this behalf, every reasonable facility to enter upon and inspect the area under planting or, as the case may be, replanting ;
(c) the assessee shall furnish to the Tea Board such particulars, documents or statements in relation to the planting or replanting of tea, as the Tea Board may require him to furnish;
(d) the assessee shall furnish to the Income-tax Officer along with his return of income for the previous year for which the deduction is claimed, a certificate from the Tea Board in Form No. 5 and a statement of particulars in Form No. 5A.
Explanation.--For the purpose of this rule, ' Tea Board ' means the Tea Board established under Section 4 of the Tea Act, 1953 (29 of 1953).'
4. The Income-tax Officer disallowed the claim for development allowance on the ground that the requisite particulars regarding extent of acreage developed after April 1, 19,65, had not been filed and a certificate from the Tea Board was not produced. For the purpose of this reference, we are only concerned with the latter reason. The disallowance was confirmed by the Appellate Assistant Commissioner in appeal. The Appellate Assistant Commissioner found that since the certificate in Form No. 5 prescribed tinder Rule 8 A of the Rules had not been filed by the assessee along with the return, he was not entitled to the development allowance. The assessee obtained the said certificate from the Tea Board only on November 25, 1968, the date on which the assessment was completed. Evidently that was the reason why that was not produced before the assessing authority. The certificate was produced before the Appellate Assistant Commissioner. But that was not found sufficient to entitle the claim for development allowance under Section 33A of the Act. The assessee took up the matter to the Appellate Tribunal. The Tribunal found that as a matter of fact the certificate was issued only after the completion of assessment. It also found that it had been produced before the Appellate Assistant Commissioner but he had refused to admit it. The Income-tax Officer objected to a remit of the case by the Tribunal to the Income-tax Officer for decision afresh on the ground that the certificate should have been furnished along with the return as provided under Rule 8A(d) of the Rules. But the Tribunal found that though the relevant rule reads :
'shall furnish to the Income-tax Officer along with his return of income '
the term ' shall ' was not to be taken as mandatory in nature, that it was only directory and, therefore, non-presentation of the certificate in Form No. 5 along with the return should not lead to a loss of relief to the assessee. It was said that it being only directory in nature the Income-tax Officer had discretion to receive, this certificate after the date of the filing of the return and grant appropriate relief. In this view the Tribunal referred the case back to the Income-tax Officer. It is on thase facts that the question formulated for reference has arisen.
5. Sub-section (1) of Section 33A provides for allowing a deduction of development allowance in respect of planting of tea bushes on any land in India owned by an assessee who carries on business of growing and manufacturing tea in India. Where tea bushes have been planted on any land not planted at any time with tea bushes or on any land, which had been previously abandoned, fifty per cent. of the actual cost of planting is permissible as development allowance. Where tea bushes are planted in replacement of tea bushes that have died or have, become permanently useless on any land already planted, the development allowance was to be 30 per cent. of the actual cost of planting. Further, provisions are made in the sub-section as to the manner of allowing the deduction. It may not be necessary to advert to this for the purpose of this case. Allowance to be made under Sub-section (1) of Section 33A is mentioned as subject to the provisions of this section, namely Section 33A, Sub-section (3) provides the condition to be fulfilled in order to enable a person to claim the development allowance. There are three conditions so prescribed. The first of them calls for furnishing of the prescribed particulars. The second concerns the debiting to the profit and loss account of the relevant previous year a portion of the development allowance allowed. The third provides that the person claiming the allowance must comply with ' other conditions as may be prescribed '. We are concerned only with the last of these for the purpose of this case. The conditions are prescribed by the Rules and it is agreed that Rule 8A is the relevant rule. The requirement that a certificate obtained from the Tea Board should be furnished in Form No. 5 is to be found in Clause (d) of Rule 8A. Since the requirement is that the certificate in Form No. 5 from the Tea Board is to be furnished along with the return of income for the previous year, it is said that later production would not be sufficient. Though on the facts of this case it is seen that the certificate was not produced at any time before the Income-tax Officer, but was furnished only before the Appellate Assistant Commissioner, the question referred to is not whether that would be sufficient but whether the rule requiring the production of the certificate along with the return is mandatory. In other words, if the certificate is not produced along with the return, would the assesses forfeit the claim for development allowance irrespective of the reasons for such belated production That is the question that we are called upon to answer.
6. That the term ' shall' need not in all contexts, circumstances and situations be treated as indicating a mandatory rule is a proposition by now well-settled. Normally it may be taken to be mandatory, for, in plain language it indicates a positive duty. But the legislative practice of using ' shall ' even where the consequence of non-compliance is not to be one of invalidation is well recognised. The question requires examination when there is a plea that notwithstanding the use of the term ' shall ' in any provision it should be read as directory. It is termed directory only in the sense that the consequence of failure to comply with it would not result in the loss or forfeiture of the right or invalidity of the action. Several tests have been evolved by courts to determine whether the term ' shall ' in any particular context is to be read as mandatory or otherwise. Though it is generally correct to say that nullification is the natural and usual consequence of disobedience, the question is one governed mainly by considerations of justice. When the result of construing the provision as mandatory would involve injustice to innocent persons without promoting the aim or object of the Act the legislature may not be taken to have intended such a construction. Maxwell observes at page 364 in his treatise on Interpretation of Statutes (11th edition) thus :
' A strong 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'.
7. The rule under construction is not any provision of a statute but a provision in a subordinate legislation. The question would then be what might be the intention of such rule making authority in making Rule 8A. In such cases if the intention is evident from the parent statute and such statute gives guidance that may also be noticed in construing the rule. The aim and object of the provision, how such object is to be promoted by construing the provision in the particular manner and what consequences would follow from such construction must necessarily govern the interpretation of the rule. There are cases where the provision gives no indication of the intention regarding the effect of non-compliance and the question of construction may then become difficult. In such cases the rule above mentioned, as to whether the provision concerns one of performance of a duty may give guidance.
8. The Supreme Court, dealing with the question of distinction between the terms ' shall ' and ' may ', observed thus in Khub Chand v. State of Rajasthan, AIR 1967 SC 1074, 1077 :
' The provision is mandatory in terms. Doubtless, under certain circumstances, the expression 'shall' is construed as 'may'. The term 'shall' in its ordinary significance is mandatory and the court shall ordinarily give that interpretation to that term unless such an interpretation leads to some absurd or inconvenient consequence or be at variance with the intent of the legislature, to be collected from other parts of the Act. The construction of the said expression depends on the provisions of a particular Act, the setting in which the expression appears, the object for which the direction is given, the consequences that would flow from the infringement of the direction and such other considerations.'
9. The Supreme Court had adverted to the rule of interpretation in regard to the term ' shall ' in the decision in State of U.P. v. Babu Ram, AIR 1961 SC 751. At page 765 of the decision the Supreme Court said thus :
' The relevant rules of interpretation may be briefly stated thus:When a statute uses the word 'shall', prima facie, it is mandatory, butthe court may ascertain the real intention of the legislature by carefullyattending to the whole scope of the statute. For ascertaining the realintention of the legislature the court may consider, inter alia, the natureand the design of the statute, and the consequences which would followfrom construing it one way or the other, the impact of other provisionswhereby the necessity of complying; with the provisions in question isavoided, the circumstance, namely, that the statute provides for a contingency of the non-compliance with the provisions, the fact that the non-compliance with the provisions is or is not visited by some penalty, theserious or trivial consequences that flow therefrom, and, above all, whetherthe object of the legislation will be defeated or furthered. '
10. That in every case where the question is one of consequence of non-observance of a provision the court has to decide the legislative intent and todecide this the court has to consider not only the actual words used butalso the scheme of the statute, the intended benefit to public of what isenjoined by the provisions and the material danger to the public by thecontravention of the scheme, was observed by the Supreme Court inBanwarilal Agarwalla v. State of Bihar, AIR 1961 SC 849.
11. The examination of the provision, therefore, must be with a view to ascertain the intent of the legislature where it is the provision of a statute that arises for consideration and that of the rule making authority when it is a rule that calls for consideration. The grant of development allowance is provided by Section 33A of the Act. Such allowance is to be granted to persons who had developed tea estates in the manner provided in the section. That is subject to certain conditions prescribed. The conditions mentioned in Rule 8A indicate that the object of the provision is to ensure that the assessee has really developed the tea estate by planting tea bushes as contemplated in Section 33A. It may not be possible for the Income-tax Officer to examine every case of a claim in detail and evidently the provision for certificate from the Tea Board is envisaged as evidence of the petitioner's entitlement to the development allowance. If the object of the provision is to secure the benefit of the de'velopment allowance provided under Section 33A on proof of the circumstances justifying such allowance and the certificate is a material to prove such a case, it goes without saying that it appears to be unreasonable to think that this claim for allowance should be forfeited by the production of the certificate otherwise than along with the return. It is particularly so when the production of the certificates along with the return of the income is not a matter entirely within the volition of the assessee. Even when he applies for the certificate in time, so long as there is no statutory duty cast upon the Tea Board to furnish it within any particular period of time, it may be that the certificate is not issued in time for production along! with the return. The return has to be filed within the time envisaged under the provisions of the Income-tax Act and cannot be delayed for the reason that the certificate had not been obtained. In such cases an assessee may not be able to file the certificate along with the return and that for no fault of his. When the certificate, though filed later, is available to the Income-tax Officer for the purpose of determining the development allowance, the object of Section 33A of the Act would be defeated by the construction that the provision in Rule 8-A requiring the certificate to be filed along with the return is a mandatory provision, non-compliance of which will disentitle the assessee to claim development allowance under Section 33A(1) of the Act. The object of the Act being one to enable an assessee to claim development allowance on proof of circumstances justifying such claim such object would be defeated by the construction that failure to file the certificate along with the return would disentitle the assessee to claim development allowance. In this view we need not go into the argument advanced by learned counsel for the assessee before us that the term ' along with ' may be read as ' in addition to ' as indicated in Stroud's Judicial Dictionary, volume I, page 118.
12. Though we have indicated that the requirement that the certificate should be produced along with the return is not mandatory we may not be taken to mean that the furnishing of the certificate is not mandatory. The only controversy is whether there is an obligation to file the certificate simultaneously with the filing of the return with the necessary consequence that non-compliance will result in forfeiture of the claim to development allowance.
13. We answer the question referred to us in the affirmative, that is, in favour of the assessee and against the revenue.
14. A copy of this judgment will be sent to the Income-tax Appellate Tribunal, Cochin Bench, under the signature of the Registrar and the seal of this court as required under Section 260(1) of the Act.