TMI Blog1992 (2) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... ly be considered under section 186(2) ?" The facts as indicated in the statement of case drawn up by the Tribunal are as follows : M/s. Builders Union (hereinafter referred to as " the assessee ") is a partnership firm which was granted registration in terms of section 185 of the Act for the assessment year 1963-64. Since the assessee complied with the requirements of section 184(7) for continuance of the grant, such registration was effective for the subsequent assessment years, i.e., 1964-65 to 1976-77. For the assessment years 1977-78 and 1978-79, it was held by the Income-tax Officer, Special Investigation Ward 'A', Bhubaneswar, that the registration shall have no effect, primarily on the ground that the assessments were completed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income-tax (Appeals) found that no such notice had been issued. The views of the Commissioner of Income-tax (Appeals) were upheld by the Tribunal in appeals preferred by the Revenue. It came to hold that the order of the Commissioner of Income-tax (Appeals) was irreversible and did not warrant any interference. It specifically noticed that the orders were passed by the Income-tax Officer under section 185 and there was no scope for acceptance of the Revenue's stand that the mention of section 185 was a mistake. The Tribunal observed that even if it is accepted that the mention of section 185 in place of section 186 was a mistake, yet, in view of want of notice and grant of opportunity as postulated in section 186(2), the orders of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the Assessing 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 . . . " "185. Procedure on receipt of application. - (1) On receipt of an application for the registration of a firm, the Assessing Officer shall inquire into the genuineness of the firm and its constitution as specified in the instrument of partnership, and (a) if he is satisfied that there is or was during the previous year in existence a genuine firm with the constitution so specified, he shall pass an order in writing registering the firm for the assessment year ; (b) if he is not so satisfied, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... days' notice intimating his intention to cancel its registration and after giving it reasonable opportunity of being heard. " Section 184 of the Act deals with application for registration. In respect of the assessment year relating to which the assessee seeks registration for the first time, an application has to be made before the end of the previous year relevant to the assessment year in terms of sub-section (4) of section 184. The proviso to the said sub-section, however, permits entertainment of an application after the stipulated time, if the Assessing Officer is satisfied that the applicant was prevented by sufficient cause from making the application before the stipulated time. The formalities to be complied with before the regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment year referred to relates to the first assessment year for which the application for registration has been made. The provisions have no application to a case where the assessee seeks continuance of benefit of registration granted for the previous assessment year. In section 185, the Income-tax Officer has two powers to refuse registration. The said section deals with the procedure on receipt of an application for initial registration. The refusal may be made in terms of either section 185(1)(b) or 185(5) or both. The powers are distinct and independent, the scope is different and the conditions envisaged are also different. Under the former, refusal can be made if the Income-tax Officer is of the opinion that the application h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any assessment year, and there has been any such failure as is mentioned in section 144, the Assessing Officer may cancel the registration for the assessment year. The alternative stand of the Department is that, even if the nomenclature of the order in question was section 185, in effect and in essence that was one under section 186. This stand is untenable. Cancellation of registration authorised under section 186(2) is hedged in by the conditions laid down therein. It is fairly accepted that, where there is any such failure in respect of the assessment year as mentioned in section 144, the Assessing Officer can cancel the registration for the assessment year after giving the firm not less than fourteen days' notice intimating his inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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