G.S.Singhvi, J.

1. This case has been placed before the Full Bench along with I. T. A. No. 83 of 2001 -- CIT v. Punjab Financial Corporation, Section 17-B, Chandigarh, for determination of the following question of law :

"Whether Section 32AB(5) of the Income-tax Act, 1961, is mandatory or directory and delayed filing of audit report would disentitle an assessee from claiming the benefit of deduction under Section 32AB(1) ?"

The background facts : The income-tax returns filed by the assessee -- Punjab Financial Corporation for the years 1988-89 and 1989-90 were accepted by the Assessing Officer under Section 143(1) of the Income-tax Act, 1961 (for short, "the Act"), and deductions claimed under Section 32AB(1) were allowed. Subsequently, he issued notices under Section 154 of the Act proposing withdrawal of the deductions on the ground that the assessee had failed to file the audit report with the returns as required by Section 32AB(5). On receipt of the notices, the assessee furnished the audit report in the prescribed form but the Assessing Officer declined to accept the same and ordered withdrawal of the deductions. The Commissioner of Income-tax (Appeals), (for short "the CIT(A)") dismissed the appeal of the assessee, but the Income-tax Appellate Tribunal (hereinafter described as "the Tribunal"), reversed the orders of the Assessing Officer and the Commissioner of Income-tax (Appeals) and restored the deductions by making the following observations : "We have carefully considered the submissions made by both the parties and have perused the order of the tax authorities. It is observed that the Assessing Officer has mentioned in the order made under Section 154 in relation to both the assessment years that the assessee in its reply stated that the accounts of the Corporation were duly audited by S. C. Dewan and Co., and copy of the audit report was submitted along with the return and that tax audit report was also enclosed therewith. It has also mentioned that the copies of receipts relating to deposits with the Industrial Development Bank of India were also submitted along with the return. It is also mentioned in the order that the assessee-Corporation filed copies of the audit report under Section 32AB along with the reply. It is observed that on the basis of the said information filed by the assessee along with the return, the Assessing Officer allowed deduction under Section 32AB in proceedings under Section 143(1). It is also not controverted by the learned Departmental Representative that no deficiency letter was issued by the Assessing Officer under Section 139(9). The Explanation below Section 139(9) clearly provides in clause (e) that a return of income shall be regarded as defective unless it is accompanied by copies of the audited profit and loss account and balance-sheet and the auditors report. It is further observed that under the provisions of Section 32AB(1), the assessee is entitled to deduction in relation to the amounts deposited in an account maintained with the Development Bank where the amount is deposited before the expiry of six months from the end of the previous year or before furnishing the return of income, whichever is earlier. The provisions of Section 32AB(5) further impose a condition that the said deduction under Sub-section (1) shall not be admissible unless the accounts 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 the report of such audit in the prescribed form, i.e., Form No. 3AA, duly signed and verified by such accountant. The proviso to Section 32AB(5) stipulates that it shall be sufficient compliance with the above provisions if the assessee gets the accounts audited under any other law and furnishes the report of the audit as required under such other law and a further report in the form prescribed under the sub-section. We may mention that the first proviso is of no he