How To: allow null values for certain fields in a record of the Biztalk schema

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I got this interesting issue the other day when I was troubleshooting a Biztalk issue with one of my customers.

The customer had created a schema using BizTalk 2004 and was using a text file as the input for this schema. The records in this input file contained many fields and certain fields might have NULL values. He had also made sure that these elements had NILLABLE value set to TRUE in the schema. Still the schema was not being validated successfully and he was getting errors.

RESOLUTION
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To fix the issue we made sure that we have the following setting done as well,
Suppress Empty Nodes = False --> at the schema root node

CAUSE
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Suppress Empty Nodes was set to TRUE and thus the fields which had NULL values were suppressed and the control went to the next node, failing the schema validation.