TMI Blog1982 (12) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... on 30th June, 1971. Hence, the ITO took the status of the assessee as an unregistered firm. A copy of the order of the ITO has been marked annex. A forming part of the statement of the case. Aggrieved by the assessment order, the assessee preferred an appeal to the AAC disputing, amongst others, the status taken by the assessing officer as an unregistered firm on the ground that the ITO was wrong in observing that no application in Form No. 6 was filed for extension of time though it was filed and Form No. 12 was duly filed within the time prayed for. The AAC by his order dated 3rd October, 1972, confirmed the assessment. With regard to the objection regarding the status taken as an unregistered firm, the first appellate court held that the registration was not a matter of status and, accordingly, he was not competent to hear the appeal on this point and the appeal against the order under s. 143(3) of the Act was not maintainable against that part of the order treating the assessee as an unregistered firm. A copy of the appellate order of the AAC has been annexed as annex. B to the statement of the case. The petitioner, being aggrieved by the appellate order, preferred a furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson; but the firm may be a registered firm or an unregistered firm. That will be of no consequence in so far as this statutory provision is concerned. We are, therefore, to examine the question of status for the purpose of maintainability of an appeal keeping , n view the only two other relevant provisions of the Act, namely , (i) the Explanation as appended to s. 246 of the Act dealing, inter alia, with the right of appeal, and (ii) Expln. (2) to s. 143 of the Act, which was inserted at a point of time which we shall hereinafter refer to and which shall be, in OUT opinion, a conclusive factor in this case. The learned members of the Tribunal have held that the Explanation as appended to s. 246 of the Act dealing with the appeal and revision lays down, inter alia, in cl. (c) that an assessee aggrieved may appeal to the AAC against such " an order against the assessee, where the assessee denies his liability to be assessed under this Act or any order of assessment under sub-section (3) of section 143 or section 144, where the assessee objects to the amount of income assessed, or to the amount of tax determined, or to the amount of loss computed, or to the status under which he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation (2) to s. 143 came into existence for the first time on the statute book in the year 1971 having been made effective from the 1st of April, 1971. The present case relates to the year 1971-72 which means that Expln. (2) to s. 143 was already in force on that date, although people in general may have been ignorant of that provision of the law. Mr. K.N. Jain, learned counsel for the assessee, however, contends that he had specifically brought it to the notice of the Tribunal since he had himself argued the case before that appellate authority and yet the Tribunal has not taken any note of it. There is no reason to disbelieve the statement at the Bar specially in view of any demurrer (sic) on the part of the learned senior standing counsel for the Revenue. Proceeding upon the assumption, however, that such an argument was not advanced on the basis of the law as it stood with effect from April 1, 1971, the Tribunal as in duty bound, was obliged under the law to take notice of this amended provision and then to construe in this context the provision as contained in the Explanation appended to s. 246 of the Act. It is, therefore, in the fitness of things necessary for us to reproduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssary or expedient to verify the correctness or completeness of the return by requiring the presence of the assessee or the production of evidence in this behalf, the ITO shall be obliged in law to serve on the assessee a notice requiring him on a date to be specified therein either to attend the ITO's office or to produce or to cause to be there produced, any evidence on which the assessee may rely in support of the return and so on. Sub-section (3) of s. 143 lays down that on the date specified in the notice issued under sub-s. (2) or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the ITO may require on specified points and after taking into account all relevant material which he has gathered, in a case where no assessment has been made under sub-s. (1), the ITO shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refundable to him on the basis of such assessment or in case where an assessment has been made under sub-s. (1), if either such assessment hits been objected to by the assessee by an application under cl. (a) of sub-s. (2) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t upon " status " of a firm being treated as a registered firm or an unregistered firm, for the simple reason that it has been admitted on all hands that so far as s. 2(31) is concerned, the firm has been equated at a par-be it a registered firm or an unregistered firm. Section 2(31) may be said to be capable of some ambiguity, but the Explanation to s. 246 cannot be said to be ambiguous at all for the simple reason that the later statutory provision is merely illustrative. So also, in our opinion, the definition of the term " person " as given out in s. 2(31) is not an exhaustive definition and is merely an inclusive one and not an all pervasive one. To crown all, we have already noticed before that s. 2 begins with the parenthesis-" In this Act, unless the context otherwise requires,-". Keeping in view the parenthesis to s. 2 as extracted above, the non exhaustive nature of the definition of the term " person " in s. 2(31) of the Act and the same being in the nature of the Explanation appended to s. 246 of the Act, nothing could be said for or against, the view that the term "status" included within its sweep a distinction between a registered-firm and an unregistered firm. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, reads as saying that any assessee aggrieved by any order of an ITO may appeal to the AAC against " an order under clause (b) of sub-section (1) or under sub-section (2) or subsection (3) or sub-section (5) of section 185 ". The Tribunal has taken the view that since the question of status was not involved at all because no declaration in proper form was filed in time either prescribed by law or as extended at any time by the ITO, it merely resulted in a failure on the part of the ITO to have decided the matter of registration of the assessee as a firm within the meaning of s. 184 read with s. l85 of the Act. That being so, the Tribunal has further gone on to hold in its appellate order (annex. C), inferentially and for all practical purposes, that it was a matter which was specifically covered by the provisions of cl. (j) of s. 246 of the Act and, therefore, could not fall within the appellate right conferred on the assessee by s. 246(c). We are afraid the Tribunal has completely misdirected itself on pure question of law. As we have already pointed out earlier, the language of s. 246(c) is very clear and unequivocal conferring a right of appeal on an assessee being aggriev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mind has been made very plain and there is no scope for any further construction of the term " status " having regard only to the language either or s. 2(31) or the Explanation to s. 246. That, however, is not the end of the matter. Mr. B. P. Rajgarhia, learned senior standing counsel for the Revenue, strenuously contended that any subject-matter falling with the compass of a refusal of registration of a firm or a refusal to renew it or the matter of condonation of delay in filing a declaration in proper form beyond the period of time prescribed by law or extended by the ITO was a matter directly covered by s. 246(j) of the Act and, therefore, could not be brought within the ambit of s. 246(c). He relied mainly on the plain juristic principle of generalia specialibus non derogant or specialia generalibus derogant. We are afraid the argument is fallacious. As we have repeatedly held above and extracted the relevant provision of s. 246(c), an assessee has been conferred upon a substantive right of appeal against an order if he feels aggrieved by " the status under which he is assessed ". If the argument of Mr. Rajgarhia be accepted then we have to impute to the Legislature an inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for creating any disharmony between the different provisions contained therein. As we have already given an illustrative example hereinbefore, there is no disharmony to be harmonised; there is no ambiguity to be resolved-we have merely to act in accordance with the mandate of the Legislature. And, one fact which is very clear to us is that cl. (c) gives a mandate to the court to entertain an appeal of an assessee in the case of a composite order wherein, while rejecting its claim as being registered firm it is simultaneously assessed as such, to go into the question as to whether the determination of the question of status has been rightly decided or not. Where is the ambiguity ? What is there to be harmonised ? On the contrary, it would bear repetition to say that the language of the two provisions as contained in cls. (c) and (j) of s. 246 are wholly harmonious by themselves, there being no ambiguity about them and, specially in view of the fact that even if it be assumed that there may be any ambiguity previously for the purpose of the question of determining the status of a firm being a registered or an unregistered one within the meaning of a " person " as defined in s. 2(31) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lready discussed above, there is nothing to be harmonised. There is no special provision as contained in cl. (j) of s. 246. It is a special provision only where an assessment order has not been simultaneously passed along with the decision on the question of status. The second fallacy which stares us in our face is that the learned judges have taken the Explanation to s. 246 as being exhaustive and not merely illustrative. We, therefore, do not think it meet and proper to detain ourselves upon this decision of the Orissa High Court. Mr. K. N. Jain, learned counsel for the assessee, however, placed great reliance upon the decision of the Allahabad High Court in the case of ITO v. Vinod Krishna Som Prakash [1979] 117 ITR 594. In our view, learned counsel has rightly pressed that decision into service. The facts of that case and the principle involved in the instant case are on all fours with the ratio of the decision of the Allahabad High Court. That was a case relating to the year 1971-72. For the assessment year 1970-71, the firm was granted registration under the Act. For the year in question, namely, 1971-72, it filed a declaration in Form No. 12 for renewal of registration on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade though no order granting extension was received and he, therefore, did not think that this dispute related to the status as claiming of the registration was not a matter of status but of an additional privilege (vide para. 5 at p. 3 of the printed brief). Be that as it may, that would be a question of fact which evidently will have to be gone into in detail by the appellate authority if the appeal is held to be entertainable as we have already held it to be so. We, therefore, do not propose to say anything either way as to whether any application in Form No. 6 for extension of time was filed by the assessee or not. That would be borne out by the records of the case before the appellate authority, once the appeal is entertainable. We, thus, find that the case at hand stands at a higher footing in favour of the assessee and against the Revenue in so far as the question involved in this case is concerned. We respectfully agree with, and endorse, all that has been said by the Allahabad High Court in the case of Vinod Krishna Som Prakash [1979] 117 ITR 594. We thus, therefore, feel reinforced in what we have already held on the question as a matter of first impression by the aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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