TMI Blog1996 (2) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... rm was granted registration in prior years. For the assessment year 1977-78 corresponding to the previous year ended August 15, 1976, an application for continuation of registration was filed on June 30, 1977, in Form No. 12. It was not signed by all the three partners. Since the partner, Shri Chidambarathanu, died on March 17, 1977, his widow, Smt. Rajammal, had signed the declaration as his legal heir. Partner No. 2, Smt. J. Parvathy, had also signed the declaration. But the third partner, Shri C. Sivarajan, had not signed it since his whereabouts were not known and he was absconding. Smt. Parvathy, had, therefore, signed the declaration on his behalf also. On enquiry, the Income-tax Officer was satisfied that Chidambarathanu had died and that Sri Sivarajan, was not to be found. He held that the declaration in Form No. 12 was not in order since it was not signed by the three partners and, therefore, registration could not be continued. On appeal, the Appellate Assistant Commissioner accepted the declaration and directed the continuance of the registration. Aggrieved, the Revenue filed an appeal before the Tribunal. The Appellate Tribunal found that the firm had been dissolved at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onditions prescribed under rule 22(5) should be strictly complied with. The erstwhile firm came to an end on August 15, 1976, as per clause 13 of the partnership deed. Form No. 12 was filed on June 30, 1977. Therefore, on the date of submission of Form No. 12, for continuation of registration, one of the partners was dead and the other partner was absconding. In fact, the form was signed by one of the partners, namely, Smt. J. Parvathy, for herself on behalf of her brother, C. Sivarajan, who is also another partner said to be absconding. On behalf of the deceased partner Chidambarathanu, his wife signed Form No. 12 as his legal heir. Therefore, it was submitted by learned standing counsel that on the basis of Form No. 12 filed on June 30, 1977, the continuation of registration is not possible. According to learned standing counsel when the Income-tax Officer noticed the deficiencies in Form No. 12, an opportunity was given to the persons who filed Form No. 12 to rectify the mistake, but the mistake was not rectified. Therefore, it was submitted that inasmuch as Form No. 12 filed for continuation of registration was not in accordance with rule 22(5) of the Income-tax Rules, continua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the assessee, the decision of the Karnataka High Court in CIT (Addl.) v. S. V. Ratnaswamy and Sons [1977] 106 ITR 154 applied on focus to the facts of this case. For these reasons, it was submitted that the Tribunal was correct in confirming the order of the Appellate Assistant Commissioner in granting continuation of registration. The fact remains that for the assessment year 1977-78, the return was filed on July 1, 1977, signed by Shri C. Durairaj and Form No. 12 was filed on June 30, 1977, signed by Smt. S. Rajammal, legal heir of her late husband Shri Chidambarathanu, and by J. Parvathy, who is another partner signing Form No. 12 for herself and on behalf of her absconding brother. Fresh return was said to be filed on December 21, 1977, with the signature of Smt. J. Parvathy, the second partner. Shri Chidambarathanu died on March 17, 1977. Sivarajan, who is the third partner in the erstwhile firm, left the place and he was said to be absconding. His profits are credited in his account. It was seen that the account of this partner was not operated throughout the accounting year except for an entry for income-tax payment. Therefore, Form No. 12 was not signed by one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irm is provided under section 184 of the Income-tax Act, 1961. The registration once granted would continue provided certain conditions are fulfilled. Those conditions are stated in sub-section (7) to section 184. Sub-section (7) of section 184 runs as under : " (7) Where registration is granted to any firm for any assessment year, it shall have effect for every subsequent assessment year : Provided that--- (i) there is no change in the constitution of the firm or the shares of the partners as evidenced by the instrument of partnership on the basis of which the registration was granted ; and (ii) the firm furnishes, before the expiry of the time allowed under sub-section (1) or sub-section (2) of section 139 (whether fixed originally or on extension) for furnishing the return of income for such subsequent assessment year, a declaration to that effect, in the prescribed form and verified in the prescribed manner, so, however, that where the Income-tax Officer is satisfied that the firm was prevented by sufficient cause from furnishing the declaration within the time so allowed, he may allow the firm to furnish the declaration at any time before the assessment is made. " Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 154. According to the facts arising in that case during the relevant year there were six partners. After the end of the relevant previous year and on July 1, 1969, a fresh partnership deed is said to have been drawn up by five of the said six partners, excluding S. R. Ramachandra, one amongst the original six partners, whose whereabouts had not been known since November 1, 1968. The firm as originally constituted had been granted registration under section 184 of the Act for the earlier years. On August 10, 1970, the firm filed along with its return of income for the assessment year 1970-71 a declaration envisaged in the proviso (ii) to sub-section (7) of section 184 of the Act in the prescribed form signed by the said continuing partners who constituted the firm as on that date and also by one Parvathamma, claiming to be the legal representative and mother of the said S. R. Ramachandra, whose whereabouts were not known. On the basis of this declaration, the Income-tax Officer, granted continuance of registration of the firm for the assessment year 1970-71. In the said case, the Tribunal accepting the contention of the assessee took the view that the declaration in Form No. 12 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 184(3), which specifically provides for the requirement of signature of all the partners personally. This being the position, any provision made in this behalf in the Rules, namely, rule 22(5) read with rule 24, cannot prevail. He submits that rule 24 also does not in clear terms enjoin that a declaration should be signed by all the partners personally. It is also argued that the words 'persons concerned' occurring in rule 24 will have to be construed as referring to 'persons who are authorised' to act on behalf of a firm, meaning that, in the absence of such authorisation, any partner could so act. Therefore, it is only such 'persons concerned' who will have to comply with the requirements of rule 22(5) as enjoined by rule 24 of the Rules. (2) While sub-sections (1) to (6) of section 184 of the Act provide for the making of an application for registration of a firm for the purpose of the Act, sub-section (7) of that section merely provides that where registration is granted to any firm for any assessment year, it shall have effect for every subsequent assessment year, provided the conditions specified therein are satisfied. It is, therefore, urged that the provisions of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of a declaration is more or less a formal matter. This will nevertheless be so, even if the rule provides for an additional requirement to be fulfilled, as any such additional requirement will also be directory in nature. " Thus, the arguments advanced before us by learned counsel for the assessee are answered in the above said decision of the Mysore High Court cited supra. Our attention was also drawn to the decision of the Supreme Court reported in Khanjan Lal Sewak Ram v. CIT [1972] 83 ITR 175, wherein while considering the provisions of section 26A, rules 6, para 3, 6A of the Indian Income-tax Rules, 1922, the Supreme Court held that the application for renewal of registration made by the assessee did not comply with the conditions prescribed in paragraph 3 of rule 6 of the Indian Income-tax Rules, 1922, and the firm was not entitled to renewal of registration for the assessment year 1948-49. So also, the Supreme Court, in Sri Ramamohan Motor Service v. CIT [1973] 89 ITR 274 while, considering the provisions of sections 26A and 59 of the Indian Income-tax Act, 1922, and the Indian Partnership Act, 1932, section 30, held that "before a person can claim the benefit of se ..... 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