Sabyasachi Mukharji, J.
1. This reference under Section 256(1) of the I.T. Act, 1961, arises out of an appeal for the assessment year 1969-70. In the assessment proceedings for the assessment year, the assessee claimed relief under Section 80-O of the I.T. Act, 1961, in respect of a sum of Rs. 4,66,858 received by it during the relevant previous year from a foreign company known as M/s. Indo-Ethiopian Textile Share Company under a managing agency agreement dated 27th January, 1958. It was not in dispute that the said amount was received by the assessee in consideration of the industrial, commercial or scientific knowledge, experience and skill made available or provided to the foreign company in consideration of technical service rendered or agreed to be rendered to the foreign company by the assessee under the agreement approved by the Central Govt. It was also not in dispute that the assessee-company applied to the Central Govt. as early as 22nd August, 1969, for approval of its agreement with the foreign company so as to qualify itself for relief under Section 80-O of the I.T. Act, 1961, for the assessment year under consideration. The Central Govt. in the Ministry of Foreign Trade accorded its approval by a letter dated 2lst of May, 1971, to the assessee. In that letter of the Govt. of India, it was stated that the approval would take effect from the assessment year 1969-70. The ITO held that, in view of the language of Section 80-O, the assessee-company was not entitled to the relief under the section since the approval of the Central Govt, was not accorded before the 1st of October of the relevant assessment year. He, accordingly, denied relief under Section 80-O to the assessee. However, in view of the letter of the Govt. of India stating that the approval would take effect from the assessment year 1969-70, he sought clarification so that he could later rectify the assessment suitably in the light of the clarification.
2. There was an appeal before the AAC. The AAC held that under Section 80-O, as it stood prior to its amendment, by the Finance (No. 2) Act of 1971, the approval of the Central Govt. should have been accorded before the 1st of October of the relevant assessment year to be entitled to relief and that the ITO was, therefore, justified in not granting relief under Section 80-O for the relevent assessment year as the approval of the Central Govt. was not accorded prior to 1st of October, 1969, In that view of the matter, he confirmed the order of the ITO.
3. There was a further appeal before the Tribunal. The Tribunal, after considering the rival contentions, held that the reference in Section 80-O requiring the approval of the Central Govt. for the agreement with the foreign company before the 1st of October of the relevant assessment year should be construed merely as a directory provision and not as a mandatory provision. The Tribunal observed that Parliament wanted to give relief and, as such, the subsequent amendment was merely clarificatory or declaratory in character of what was the law prior to the amendment and held that, in the facts and circumstances of the case, which we have mentioned hereinbefore, the assessee was entitled to relief and, therefore, reversed the decisions of the ITO as well as the AAC. In the premises, under Section 256(1) of the I.T. Act, 1961, the Tribunal has referred to this court the following questions :
' 1. Whether, on a correct interpretation of the provisions of Section 80-O of the Income-tax Act, 1961, and on the facts and in the circumstances of the case, the Tribunal was correct in holding that the provisions of Section 80-O of the Income-tax Act, 1961, requiring that the approval of the Central Government for the agreement with the foreign company shall be obtained before the 1st of October of the relevant assessment year were merely directory in character and the approval accorded by the Central Government in the present case subsequent to that date on the application filed by the assessee prior to that date was sufficient compliance with the requirements of the statutory provision ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that the assessee was entitled to the relief under Section 80-O of the Income-tax Act, 1961, although the approval of the Central Government for the agreement between the assessee-company and the foreign company was not accorded before the 1st day of October of the relevant assessment year '
4. We have noted the facts. It would be instructive in this connection to bear in mind the provision of Section 80-O as the same was before its substitution by the Finance (No. 2) Act of 197J, with effect from 1st of April, 1972. The said provision was as follows :
'80-0. Deduction in respect of royalties, etc., received from certain foreign companies--Where the gross total income of an assessee being an Indian company includes any income by way of royalty, commission, fees or any similar payment received by it from a foreign company in consideration for the use of any patent, invention, model, design, secret formula or process, or similar property right, or information concerning industrial, commercial or scientific knowledge, experience or skill made available or provided or agreed to be made available or provided to the foreign company by the assessee, or in consideration of technical services rendered or agreed to be rendered to the foreign company by the assessee, under an agreement approved by the Central Government in this behalf before the 1st day of October of the relevant assessment year, there shall be allowed a deduction of the whole of such income in computing the total income of the assessee.'
5. We are concerned with the section as stated above for the relevant assessment year. In the Finance (No. 2) Act of 1971 after the first condition was mentioned, the expression was ' under an agreement approved by the Board in this behalf ' and two provisos were added, which were as follows:
' Provided that the application for the approval of the agreement referred to in this sub-section is made to the Board before the 1st day of October of the assessment year in relation to which the approval is first sought: Provided further that approval of the Board shall not be necessary in the case of any such agreement which has been approved for the purposes of the deduction under this section by the Central Government before the 1st day of April, 1972, and every application for such approval of any such agreement pending with the Central Government immediately before that day shall stand transferred to the Board for disposal.'
6. On behalf of the revenue, it was contended that prior to its amendment the relief granted to the assessee was a conditional relief in terms of Section 80-O and the assessee was entitled only to the said relief if the condition precedent for the enjoyment of such relief had been fulfilled. On behalf of the revenue, it was emphasised that in fiscal law strict interpretation should be resorted to and if a strict interpretation of the provision was made, unless the approval of the Central Govt. was accorded before the 1st of October of the relevant assessment year, the assessee, even if other conditions were fulfilled, was not entitled to the relief contemplated under Section 80-O of the Act. It is quite true and well settled that fiscal laws should be strictly construed but it is also fundamental that all provisions should be so construed as to fulfil the purpose of the provisions. We have to make a balance of these two fundamental principles of construction. The object of Section 80-O is quite manifest. Indeed, the entire object of Chap. VI-A of the I.T. Act, 1961, was to afford relief to the assessee in certain contingencies. The object of Section 80-O prior to the amendment by the Finance (No. 2) Act of 1971, was to grant relief to certain incomes generated from certain types of transactions mentioned in Section 80-O but there was one condition imposed that such transaction should have the approval of the Central Govt. so that relief in respect of this income was not misused or misapplied in certain cases, that is to say, in order to be entitled to the relief, the agreements generating income should be such which would have the approval of the Central Govt.--in so far as that requirement is met, that is to say, that the agreements generating the income which are contemplated by the Act for the purpose of relief should have the approval of the Central Govt., that provision, in our opinion, is mandatory but the question is, whether the time at which the approval is to be given is also mandatory or not. In this case, admittedly, the approval of the Central Govt. had been accorded with effect from the assessment year 1969-70. Therefore, for the relevant assessment year, the approval will be effective but the approval was actually granted on a date subsequent to the 1st day of October, 1969, which is the relevant date mentioned in the section. Now, the construction which the learned advocate for the revenue is asking us to make would entail reading the section in the manner following : 'approved by the Central Government in this behalf which was accorded before 1st day of October of the relevant assessment year'.
7. Now, the expression which we have underlined* 'accorded before 1st day of October' was not there in the section. What was there in the section was that there should be an approval before the 1st of October of the relevant assessment year. The approval given by the Government is effective from a prior year, i. e., from the beginning of the relevant assessment year. Therefore, even on a very strict construction or literal construction of the section, in our opinion, the approval was in accord with the condition enjoined by the section and if that is so, and as has been found other conditions have been fulfilled, the assessee was also entitled to relief under the provisions of this section. But, quite apart from the same, having regard to the purpose of the section, it is quite manifest that the section, in so far as the approval portion is concerned, was not mandatory. As a matter of fact, the assessee could not compel the Central Govt. to accord the approval before a particular date. The assessee in this case had indisputably applied for the approval long before the appropriate date. The government machinery moves slowly and the actual factum of approval was communicated to the assessee subsequently. In that background, it cannot be said that the requirement of the approval, so far as the relevant provision is concerned, was mandatory. In this connection, learned, advocate for the revenue drew our attention to certain observations from Craies on Statute Law, 6th Edn, p. 262, where the learned editor referring to the observations of Mr. Justice Grove in the case of Barker v. Palmer  8 QBD 9 noted that provisions with respect to time were always obligatory, unless a power of extending the time was given to the court. In our opinion, the said observations were not quite apposite to the facts and circumstances of the case. The true principle is that there is no general rule which can be laid down whether a particular provision is mandatory or directory. It is always the duty of the courts of justice to try to get at the real intention of the Legislature by carefully construing the whole scope of the statute. In this connection, reference may be made to the observations of the learned editors of Craies on Statute Law, at p. 250, where reference was made to the observations of Sir Arthur Channell in the case of Montreal Street Railway Co. v. Normandin  AC 170, where it was observed that the question whether the provisions in a statute were directory or imperative had frequently arisen in that country, but it had been said that no general rule could be laid down and that in every case the object of the statute must be looked at. When the provisions of a statute related to the performance of a public duty and the case was such that to hold null and void acts done in respect of this duty would work serious general inconvenience or injustice to persons who had no control over those entrusted with the duty, and at the same time would not promote the main object of the Legislature, it had been the practice to hold such provisions to be directory only, the neglect of them, though punishable, not affecting the validity of acts done.
8. These views were also echoed in Maxwell on the Interpretation of Statutes 11th Edn., p. 364, where it was observed as follows :
' It has been said that no rule can be laid down for determining whether the command is to be considered as a mere direction or instruction involving no invalidating consequence in its disregard, or as imperative, with an implied nullification for disobedience, beyond the fundamental one that it depends on the scope and object of the enactment. It may, perhaps, be found generally correct to say that nullification is the natural and usual consequence of disobedience, but the question is in the main governed by considerations of convenience and justice, and, when that result would involve general inconvenience or injustice to innocent persons, or advantage to those guilty of the neglect, without promoting the real aim and object of the enactment, such an intention is not to be attributed to the legislature. The whole scope and purpose of the statute under consideration must be regarded. The general rule is, that an absolute enactment must be obeyed or fulfilled exactly, but it is sufficient if a directory enactment be obeyed or fulfilled substantially.'
9. In this connection, we may also refer to the observations of this court in the case of CIT v. Duncan Brothers & Co. Ltd. : 28ITR427(Cal) , where dealing with the provision contained in Section 66(1)of the Indian I.T. Act, 1922, which provided, inter alia, that 'the Appellate Tribunal shall within ninety days of the receipt of such application draw up a statement of the case and refer it to the High Court', it was held not to be mandatory and a reference made by the Tribunal to the High Court was not incompetent merely because it was made after the expiry of the ninety days from the date of receipt of an application by the assessee or the Commissioner requiring the Tribunal to make a reference to the High Court. The court noted that the true distinction between a provision which was directory and the provision which was mandatory was that, in the former case, disregard of the provision did not by itself invalidate the act done, whereas, in the latter case, it would do. The rule of conduct expected to be followed by a public authority addressed by the provision was, however, not different in the two cases. The difference lay in the consequences of a breach. Where the provisions of a statute related to the performance of a public duty and the case was such that to hold null and void acts done in neglect of that duty would work serious general inconvenience or injustice to persons who had no control over those entrusted with the duty, and at the same time would not promote the main object of the Legislature, such provisions should be construed as being directory only and not imperative.
10. The same principle was reiterated by the Supreme Court in the case of L. Hazarimal Kuthiala v. ITO : 41ITR12(SC) . See also in this connection, the observations of the Supreme Court in the case of State of U.P. v. Maribodhan Lal Srivastava, : (1958)IILLJ273SC . In the context of the provisions of the W.T. Act, the said Bench decision was reiterated by the Orissa High Court in the case of Subhas Chandra Ghosh v. State of Orissa  26 STC 211. Our attention was also drawn to the observations of the Division Bench of this court in the case of CIT v. Clive Insurance Co. Ltd. : 85ITR531(Cal) , the court observed as follows:
'To us, however, it appears that Section 49D which has been enacted for the purpose of granting relief to an assessee should be so construed as will serve the object and purpose of the said section and the said section should be construed liberally in favour of an assessee and necessary relief should be granted whenever the requisite conditions are fully satisfied. It is to be noted that in the decision of the Supreme Court in the case of Commissioner of Income-tax v. Raja Benoy Kumar Sahas Roy : 32ITR466(SC) , the Supreme Court has referred to the other decisions which take a similar view without any disapproval and the Supreme Court has made no mention of the decision of the Orissa High Court. '
11. In the case of Vithaldas v. ITO : 71ITR204(All) , the Allahabad High Court held that a mandamus would lie to compel the performance of a public duty by a public officer although the time prescribed by. statute for the' performance of it had passed. The context in which these observations were made was slightly different but there the court was concerned with a situation where the assessee had made an application for rectification of an order passed by the ITO which could have been rectified only within the period of four years. But the ITO allowed the four years to lapse and then took up the plea that he had no jurisdiction to pass the order. The High Court compelled the ITO to perform the duty and it was held that in such a case the limitation of four years would not be a deterrent in making the order.
12. Having regard to the object of the Act, in our opinion, the subsequent amendment by the Finance (No. 2) Act of 1971, would be in the nature of a clarification and explanatory of what was the law before. It was because the assessee normally would have no control over the delay in the discharge of the functions by the Government that the proviso was added. The assessee could not do anything more but to apply within the time and if in a case the conditions were fulfilled and sanction was accorded subsequent to the period with retrospective effect, then, in our opinion, the conditions should be fulfilled. In any event, having regard to the purpose of the section, both on a strict construction as well as on the well-settled principles of construction of a statute as we have mentioned hereinbefore, in our opinion, the Tribunal came to the correct conclusion to give effect to the purpose of the legislation in this connection. In that view of the matter, both the questions are answered in the affirmative and in favour of the assessee.
13. In the facts and circumstances of the case, the parties will pay and bear their own costs.
Sudhindra Mohan Guha, J.
14. I agree.