1969 (8) TMI 26 - HC - Income Tax

Summary

Issues: Assessment of a partnership firm as an unregistered firm for the assessment year 1963-64, validity of registration granted for the assessment year 1962-63 for the subsequent year.

Analysis:
The judgment pertains to a reference under section 256(1) of the Income-tax Act, 1961, addressing the correct assessment of an assessee-firm for the assessment year 1963-64 in the status of an unregistered firm. The primary issue revolves around whether the registration granted to the firm for the assessment year 1962-63 should have effect for the subsequent assessment year 1963-64 under sub-section (7) of section 184 of the Act. The Income-tax Officer assessed the firm as an unregistered firm for the year in question due to the firm's failure to file a return of income within the specified timeframe, leading to an order of assessment under section 144. The Appellate Assistant Commissioner later directed the assessment to be made in the status of a registered firm, a decision challenged by the Income-tax Officer in an appeal to the Income-tax Appellate Tribunal.

The Tribunal ruled that the assessee was not entitled to the benefit of registration for the assessment year 1963-64 as the firm had not filed its return of income with a declaration confirming no change in the firm's constitution or partners' shares, as required by the proviso to sub-section (7) of section 184 of the Act. The court highlighted the statutory provision that registration granted to a firm for any assessment year continues for subsequent years if the firm submits the necessary declaration along with its income tax return for the relevant year. However, in this case, the assessee-firm failed to meet the conditions specified in the proviso, thereby leading to the denial of the registration benefit for the subsequent year.

Ultimately, the court concurred with the Tribunal's decision, emphasizing that the registration granted to the assessee-firm for the assessment year 1962-63 would not extend to the assessment year 1963-64 due to the firm's non-compliance with the statutory requirements. As a result, the court ordered the assessee to bear the costs of the reference, including the advocate's fee of Rs. 250. The judgment underscores the significance of adhering to the prescribed procedures and conditions for maintaining the benefits of registration under the Income-tax Act, ensuring compliance with the statutory provisions governing partnership firms' assessments and registrations.