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TMI Blog1969 (10) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... and constitution of the firm, and, on the same day, they applied for registration of the firm for the assessment year 1964-65, the accounting year being from 1st April, 1963, to 31st March, 1964. Since the application for registration was not filed before the close of the previous year, an application for condoning delay was filed, the reason for the delay being that the senior partner of the firm was ill. The Income-tax Officer was satisfied about the reason; and he consequently excused the delay. But he did not register the firm, as, in his opinion, the document of partnership was not in force during the relevant accounting year. The assessee-firm took up the matter in appeal before the Appellate Assistant Commissioner, and he took a diff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion has not been changed by the amendment of the law by the Income-tax Act of 1961. On the other hand, Mr. Varghese Kalliath argues on behalf of the assessee that the decision in Mitter's case was under the Income-tax Act of 1922, the relevant provisions of which have been substantially modified by the Act of 1961, so that that decision is no more good law and not applicable to registration of firms under the new Act. The counsel elaborates his argument saying that the decision in Mitter's case was based on the wording of section 26A of the Income-tax Act of 1922, and since the language has been substantially modified by the Act of 1961, the decision does not apply ; according to him, the decision " stemmed from the language " of the earlie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artnership constituted under a document need not necessarily have its origin in the document itself, while Chakravartti C.J. took a different view in the Calcutta case. Considering these two lines of cases, the Supreme Court came to the conclusion that the expression " under the document " was different from the expression " by the document" and that the former meant that the partnership need not have been constituted or created by the document itself. The argument of the counsel for the assessee may now be scrutinised. The counsel argues that the change in the language of the section [section 184(1)(i)] is clear that the legislature wanted to change the effect of the decision of the Supreme Court in Mitter's case ; that is why the languag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, and not on the language of section 26A. In this decision itself, Hidayatullah J. (as he then was) wrote a separate but concurring judgment which may also be relevant in this connection. The learned judge said : " I entertain, however, some doubt as to whether the instrument sought to be registered should be in existence in the accounting year, before registration can be claimed. There is nothing in the Act which says this specifically. My brother has reasoned from the contents of the Act and the rules that such a condition is implied." We are extracting this passage from the judgment of Hydayatullah J. not for agreeing with the doubt expressed by his Lordship in preference to the majority opinion, but only to confirm that the conclusio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the previous year. Thus, sub-section (4) of section 184 now embodies the relevant provisions of rules 2 and 3 framed under the old Act ; and these provisions are still intact with equal force, if not more force as they are now in the Act itself. Therefore, the observation of the Supreme Court first extracted hereinbefore is still good ; and we may add that the change in the language of section 184(1)(i) of the new Act must obviously have been to use clearer and uncontroversial language to accord with the ruling of the Supreme Court in Mitter's case. Now, the Supreme Court held in Mitter's case that the document should be operative during the accounting year. However, the Supreme Court did not consider further whether the document should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in our opinion, the law does not contemplate. The error committed by the Appellate Assistant Commissioner and the Appellate Tribunal in this case lies in not properly appreciating the power of the Income-tax Officer to excuse delay. We reiterate that the power is only to excuse the delay in filing the application for registration and not to excuse the delay in drawing up the document of partnership itself. Therefore, our answer to the question referred is in the negative, namely, that the Appellate Tribunal was not right in law in directing registration of the assessee-firm for the assessment year 1964-65 ; the answer is thus against the assessee. However, we do not pass any order regarding costs. A copy of this judgment will be sent to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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