1981 (8) TMI 116 - AT - Income Tax

Summary

Issues:
Delay in filing the declaration in Form No. 12 for assessment year 1976-77 leading to the assessment of the assessee as an unregistered firm.

Analysis:
The assessee appealed against the order of the AAC of Income-tax, confirming the ITO's decision to not condone the delay in filing the declaration in Form No. 12, resulting in the assessment of the assessee as an unregistered firm for the assessment year 1976-77. The firm had a history of registration for certain years, but for 1975-76 and 1976-77, the declaration in Form No. 12 was filed late, along with the return of income on 6th Nov., 1978. The ITO refused to condone the delay, citing that the managing partner's father's illness, leading to his death, did not constitute a sufficient cause for the delay. The AAC upheld the ITO's decision, prompting the assessee to appeal further.

The crux of the matter revolved around whether the assessee firm, previously registered, was entitled to continuation of registration under section 184(7) of the IT Act, 1961 for the assessment year 1976-77. Section 184(7) stipulates conditions for continuation of registration, including no change in the firm's constitution or partners' shares, and timely submission of the declaration in Form No. 12. The ITO can condone delays if satisfied with sufficient cause. In this case, the declaration was filed late due to the managing partner's father's illness and subsequent misunderstandings among partners. All partners were related, and the declarations for multiple years were filed together on 6th Nov., 1978. The ITAT accepted the explanation, considering it a sufficient cause for the delay, especially given the genuine nature of the firm. Consequently, the ITAT directed the continuation of registration for the assessee firm for the relevant assessment year.

In conclusion, the ITAT allowed the appeal, overturning the previous decisions and directing the continuation of registration for the assessee firm for the assessment year 1976-77.