1990 (9) TMI 40 - HC - Income Tax

Summary

Issues:
1. Appealability of the order passed by the Income-tax Officer under section 185(3) of the Income-tax Act, 1961.
2. Interpretation of the order under section 185(3) as an order under section 184(4).

Analysis:

Issue 1:
The case involved a firm that failed to file a declaration within the specified time under section 139(1) of the Income-tax Act for the assessment year 1978-79. The Income-tax Officer rejected the declaration due to the delay, leading to the firm losing its registered status. The Appellate Assistant Commissioner allowed the registration, but the Income-tax Appellate Tribunal reversed the decision, stating that the appeal before the Appellate Assistant Commissioner was not maintainable under section 246 of the Act. The Tribunal relied on previous court decisions and held that the appeal was not valid. The assessee argued that the order was appealable under section 246(1)(j) of the Act. The counsel cited various court decisions to support the appealability of the order, emphasizing that an appeal lies against an order decided on merits, including issues like limitation.

Issue 2:
The primary question raised was whether the order of the Income-tax Officer, labeled under section 185(3), was, in fact, an order under section 184(4). The counsel for the assessee contended that the order was appealable under section 246(1)(j) of the Act. The argument was supported by citing the decision of the Supreme Court in Mela Ram and Sons v. CIT, emphasizing that an order rejecting a declaration due to delay is appealable as it involves a defect that could be rectified. The counsel further argued that the order under section 185(3) should have allowed the assessee to rectify the defect in the declaration before losing the registered status. The court analyzed various decisions and concluded that the order was not appealable as it pertained to a delayed declaration, which did not fall under the scope of appealable orders under section 246(1)(j) of the Act.

In conclusion, the court ruled against the assessee on both issues, emphasizing that the settled legal position should not be disturbed, and no appeal lies against an order rejecting a delayed declaration under section 185(3) of the Income-tax Act.