Law: Income Tax Act, 1961

Section: 32,32A(2B)(ii)

Income-tax-.... Investment allowance---Higher rate---Condition that certificate from prescribed authority under S.32A(2B)(ii) to be filed alongwith return--­Certificate can be furnished before completion of assessment with satisfactory explanation for failure to file alongwith return---Indian Income Tax Act, 1961, S.32A(2B)(ii). The assessee claimed investment allowance at the higher rate of 35 per cent under section 32A(2B)(ii) of the Income Tax Act, .1961, in respect of the machinery and plant installed by it in its industrial undertaking, but failed to submit alongwith its return of income the certificate from the prescribed authority as stipulated by that section. However, the assessee had submitted alongwith the return a copy of the application made by it to the prescribed authority for issuance of the necessary certificate. Later, on receipt of the certificate, the assessee furnished the same to the Income-tax Officer in the course of assessment proceedings. The Income-tax Officer However, held that since clause (ii) of section 32A(2B) of the Act required the assessee to furnish the certificate alongwith the return, the requirement of that clause was not fulfilled and hence the assessee was not entitled to investment allowance at the higher rate, The Tribunal allowed the higher rate if investment allowance. On a reference: Held, that furnishing of the certificate from the prescribed authority as contemplated by clause (ii) is mandatory. But the requirement of furnishing the certificate alongwith the return of income is directory. If the assessee furnishes the same to the Assessing Officer before the completion of he assessment and offers a satisfactory explanation for his failure to furnish the same alongwith his return of income, the Income-tax Officer may consider the same and if he is satisfied with the explanation, he may accept the same and allow the claim of the assessee to investment allowance at the higher rate under section 32A(2B) of the Act. The Tribunal was justified in directing the Income-tax Officer to consider the claim of the assessee for investment allowance at a higher rate under section 32A(2B)(ii) of the Act on the basis of the…

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