TMI Blog1965 (12) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... s follows: The business that the assessee is carrying on now was previously carried on by a registered firm known as Bela Singh Daulat Singh consisting of five partners. The firm was dissolved on November 27, 1953, and the assessee-firm is said to have been constituted and to have continued the business. A deed of partnership, however, was said to have been executed on November 25, 1954, and come into effect on November 28, 1954. The assessee-firm has not been registered under the Partnership Act and the deed of partnership also has not been registered under the Registration Act. The assessee has selected the year commencing on November 28 and expiring on November 27 of the next year as its accounting year. The first assessment year in which the assessee-firm became liable to be assessed to income-tax was 1955-56 and it was assessed on November 16, 1955, but not as a registered partnership. For that assessment year it could not and did not apply for registration at all. For the next assessment year 1956-57, it applied for registration on July 2, 1956, but the application was not accompanied by the deed of partnership, though said to be in existence, and a copy of it. The applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal dismissed a second appeal. The contentions advanced before it were that rule 2 applies to the first application under section 26A for any assessment year and not to any subsequent application even if for a subsequent assessment year, that no period of limitation is prescribed for a subsequent application for a subsequent assessment year, that there was sufficient cause within the meaning of the proviso to rule 2, because the application for the assessment year 1957-58 was made while the earlier application for the assessment year 1956-57 was still pending, that under a circular letter issued by the Central Board of Revenue, registration should have been ordered on the second application made during the pendency of the first application and that the assessee-firm really existed during the accounting year. All these contentions were rejected by the Tribunal. The assessee applied under section 66(1) for referring the case to this court but the Tribunal rejected the application. Then this court called for the reference. Question No. 1 not only is a pure question of fact but also does not arise out of the Tribunal's order. The Tribunal never held that the deed of partne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to have the certificate... renewed for a subsequent year and that the application must be made before the 30th day of June of the assessment year unless the Income-tax Officer extends the time on being satisfied that the firm was prevented by sufficient cause from making it before that date. It is clear that an application for renewal referred to in clause (c) of rule 2 is an application by a firm to whom a certificate of registration has already been granted. So long as no certificate of registration has been granted to a firm, it cannot apply for renewal even if its application for a certificate of registration is pending before the Income-tax Officer. The question of renewal arises only after the firm has actually been registered. Now, rule 2 deals with an application made for the first time under the Act for registration and with an application for renewal, i.e., by a firm to which a certificate of registration has previously been granted, and not with any other application. It is thus incomplete and does not deal with all possible circumstances. For instance, it does not deal with a firm whose first application under the Act for registration has been rejected or is pendi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether an application is made for the first time under the Act or not has to be decided with reference to each assessment year. The plain meaning of clause (a) is that there is only one application made for the first time out of several applications made for several assessment years. After the very first application is made (regardless of the assessment year for which it is made), every subsequent application, whether for the same assessment year or a subsequent assessment year, is other than an application made for the first time under the Act. There is nothing in the clause to suggest that the question is to be considered with reference to each assessment year separately, forgetting what happened in the past. There was no reason for the Central Board of Revenue to contemplate more than one application for registration for one assessment year. There is no provision for the limitation of a second application for the same assessment year. If clause (2) prescribed the period of limitation for the first application for an assessment year and not merely for the first application in a series of applications for a series of assessment years, one would have expected a provision for the lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and if clause (a)(ii) applies, it must be made before the end of the previous year. What is meant by a firm being constituted is its being constituted under a deed of partnership. The question of registration under section 26A arises only when a firm is constituted under an instrument of partnership . The assessee-firm in the instant case came into existence prior to November 25, 1954, but under the deed of partnership it was constituted with effect from November 28, 1954, i.e., in the previous year relating to the assessment year 1956-57 and we are concerned with an application made for the assessment year 1957-58; if it can be said to be a first application under the Act, it was governed by clause (a)(ii) and should have been made before November 28, 1956. It was, however made on March 23, 1957, and was, therefore, barred by time even according to clause (a)(ii). The assessee relied upon a circular said to have been issued by the Central Board of Revenue. The circular is not a law; it may bind the income-tax authorities but cannot be said to be law merely because it does so. A party is bound by a decree passed against him and a Government is bound by a mandamus issued again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has jurisdiction to find facts for itself. What seems to have been meant by the Supreme Court by the facts being on the record is that they exist on the record and are admitted or are not disputed. In any case, the decisions do not help the petitioner, because the circular is not on the record at all; it has not been produced in the assessment proceedings. Parimisetti Seetharamamma v. Commissioner of Income-tax [1965] 57 I.T.R. 532 (S.C.) laying down that a finding of fact reached by the Tribunal after placing the burden of proof upon a wrong party is not binding on the High Court is irrelevant because there is no scope for applying this principle in the instant case. Under section 5(8) all officers and persons employed in the execution of this Act shall observe and follow the orders, instructions and directions of the Central Board of Revenue provided that they do not interfere with the discretion of the Appellate Assistant Commissioner in the exercise of his appellate functions. The proviso to rule 2 confers discretion upon an Income-tax Officer to entertain an application for registration or renewal which is time-barred, on his being satisfied that there was sufficient cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular, however, is not applicable to the facts of the instant case because the assessee had filed a separate application for registration for the assessment year 1957-58. Had it filed only the application for renewal, the circular would have applied and the Income-tax Officer would have called upon it to apply for registration within 7-10 days. The application for renewal was made before the 30th day of June of 1957. Since an application for registration also had been filed, there was no necessity for the Income-tax Officer's giving 7-10 days' time to the assessee to file an application for registration before rejecting his application for renewal. It may, however, be said, and be said with much force, that the assessee should not be in a worse position on account of his taking the precaution of applying for registration simultaneously with applying for renewal and that his application for registration should not be rejected as time-barred if an application for registration made subsequently and within the time allowed by the Income-tax Officer under the circular would have been treated as made within time. If an application for registration made within 7-10 days allowed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rule 3 was not complied with. These facts were the material for the finding that the deed did not exist prior to February 20, 1957, and that, consequently, there was no firm in existence as constituted by a deed of partnership prior to that date. There is no inconsistency in the Income-tax Officer's refusing registration on the ground that the firm was not genuine at the same time assessing the assessee as a firm. The firm, of which registration was sought, was a firm claimed to have been constituted under a partnership deed dated November 25, 1954. The Income-tax Officer, upon the material before him, came to the conclusion that the coming into existence of such firm had not been established. But that does not mean that no other firm at all could have come into existence. The Income-tax Officer, when he made the assessment order, must be taken to have considered that the assessee was a firm, although not the firm, registration of which had been applied for. We are not called upon to find in this reference whether the firm which has been assessed existed or not. Nor are we called upon to weigh the material in support of the finding that the firm as alleged to be constituted by ..... 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