TMI Blog2005 (2) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the case, the Tribunal was right in holding that the assessee-firm was entitled to continuation of registration under section 184(7) of the Income-tax Act, 1961?" The present reference relates to the assessment year 1982-83. Briefly stated the facts giving rise to the present reference are as follows: The respondent is a partnership firm which had been granted registration under the Act in the preceding year. For the assessment year in question it had filed a declaration in terms of section 184(7) of the Act seeking continuation of the registration of the firm. The Assessing Officer had declined to grant registration on the ground that the profits were not divided amongst the partners in accordance with the partnership de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the order dated March 30, 1985, passed under section 184(7) the Assessing Officer has not cancelled the registration. What he says is that continuation of registration under section 184(7) is not allowed. This could not be done because the Income-tax Officer is nobody to allow or not to allow continuation of registration under section 184(7). Once a declaration has been filed under section 184(7) and the firm was registered for an earlier year, the registration will have effect for every subsequent year for which declaration is filed. Therefore, on its very face the order passed by the Assessing Officer was untenable in law. Further on the merits, the mere fact that the assessee had certain income, which he did not disclose, does not m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assumption that the amount of cash credit surrendered by the assessee-firm as its income was not properly distributed amongst the partners. In my view, therefore, the Assessing Officer had no material to hold that the assessee-firm was not a genuine firm. For the above reasons the appeal is allowed and the order passed by the Assessing Officer purporting to decline continuation of registration is hereby annulled." We have heard Sri A.N. Mahajan, learned standing counsel for the Revenue. Learned standing counsel submitted that as the amount of cash credit had been surrendered by the respondent itself in the course of the assessment proceedings it was incumbent upon the firm to distribute the said amount by treating it as profit a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished the declaration in the prescribed form for claiming continuation of registration. Also there was no finding either by the Income-tax Officer or by the Appellate Assistant Commissioner that there was change in the constitution of the firm or change in the profit-sharing ratio, as evidenced by the partnership deed on the basis of which registration was granted for the preceding year. As there was no change in the constitution of the firm or in the profit-sharing ratio amongst the partners of the firm, the Tribunal was justified in annulling the order declining the continuation of registration. We, therefore, answer the question referred to us in the affirmative, i.e., in favour of the assessee and against the Revenue. There sha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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