TMI Blog1975 (12) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... Act was issued and served on the assessee on July 17, 1971. The return of income, therefore, had to be filed within one month therefrom, viz., before August 16, 1971. The declaration also under section 184(7) of the Act ought to have been filed before August 16, 1971, but, as stated above, the assessee filed it on September 27, 1971. The assessee was called upon to explain the reasons for the delay in filing this declaration. Its explanation was that it had not received the notice under section 139(2) of the Act, but when the service of the notice was brought to the knowledge of the assessee, it accepted the same. The Income-tax Officer, therefore, found that there is no convincing explanation behalf of the assessee for the late filing of the declaration. He, therefore, refused " to allow continuation of registration to the assessee-firm ". The assessee went in appeal to the Appellate Assistant Commissioner who held that since the order of the Income-tax Officer was passed under section 184(7) of the Act, no appeal was maintainable as section 184(7) is not included in section 246 of the Act. The assessee filed an appeal before the Income-tax Appellate Tribunal which held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent, contends that the proviso to section 184(7) of the Act only gives discretion to the Income-tax Officer to condone the delay if the circumstances so permit. He submits that he is not contending that the Income-tax Officer has no power to refuse to condone the delay, but what he submits in that if the Income-tax Officer finds that there are circumstances to condone the delay, he will have to pass an order under section 185(1)(b) or section 185(3) of the Act. Mr. Anjaneyulu submits that what the Income-tax Officer had done in this case is that he had refused " to allow continuation of registration to the assessee-firm ", and, therefore, it would mean that this order was an order under section 185(1)(b) of the Act. Therefore, considering the order of the Income-tax Officer either under section 185(1)(b) or under section 185(3), an appeal was maintainable under section 246(j) of the Act. In support of this contention, Mr. Anjaneyulu cited Commissioner of Income-tax v. Dineshchandra Industries [1975] 100 ITR 660 (Guj) and Sir Hukumchand and Mannalal Co. v. Commissioner of Income-tax [1966] 60 ITR 99 (SC). In order to appreciate the respective contentions advanced by the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 184 of the Act provides that the application should be made in the prescribed form and should contain the particulars as prescribed by the rules. Sub-section (7) of section 184 which is relevant for purposes of this case deals with the effect with regard to registration in respect of a firm to which registration has already been granted for any assessment year, and it provides that such a registration granted to a firm for any assessment year should leave effect for every subsequent assessment year. Two provisos are added to this sub-section. Proviso (i) is to the effect that there should be 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 for any assessment year. Proviso (ii) gives discretion to the Income-tax Officer and it provides that where under sub-section (1) or sub-section (2) of section 139 time is allowed for furnishing the return of income for such subsequent assessment year, the firm has to file a declaration to that effect in the prescribed form and verified in the prescribed manner, and if the Income-tax Officer is satisfied that the firm wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed within that period, the Income-tax Officer would, by an order in writing, declare that the registration granted to the firm in any assessment year would have no effect for the relevant assessment year. Sub-section (4) of section 185 provides that where a firm is registered for any assessment year as envisaged in section 184(7) of the Act, and if the declaration is in order, the Income-tax Officer should record a certificate on the instrument of partnership on the certified copy submitted in lieu of the original instrument, as the case may be, to the effect that the firm has been registered under the Act for that assessment year. Section 246 of the Act deals with appeals to the Appellate Assistant Commissioner against orders of the Income-tax Officer. A perusal of this section would show that the orders against which appeals could be filed before the Appellate Assistant Commissioner are given in section-wise manner, and clause (j) is relevant for purposes of this case. It provides that any assesee aggrieved by the order of an Income-tax Officer under clause (b) of sub-section (1) or sub-section (2) or sub-section (3) or sub-section (5) of section 185, may appeal to the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an appealable order under section 246(j) of the Act. A close reading of section 184(7), proviso (ii), in conjunction with section 185(4) would show that, notwithstanding the condonation of delay by the Income-tax Officer when he is satisfied that the firm was prevented by sufficient cause from filing the declaration within the time allowed, nevertheless, he would have to pass an order under section 185(4) to the effect that the firm has been registered under the Act for that assessment year ; similarly, if the Income-tax Officer does not condone the delay under section 184(7), proviso (ii), he would, nevertheless, have to pass an order under section 185(3) declaring that the registration granted to the firm in any assessment year would have no effect for the relevant assessment year. In other words, mere condoning of the delay under section 184(7), proviso (ii), would not by itself have the effect that the firm has been registered under the Act for that assessment year. The Income-tax Officer would have to go further and pass a specific order under section 185(4) ; similarly, mere non-condoning of the delay by the Income-tax Officer under section 184(7), proviso (ii) cannot abso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er discussing the relevant provisions of the Indian Income-tax Act, 1922, it was observed by the Supreme Court [1966] 60 ITR 99, 102 (SC) : " The crucial point to be noticed is that the said three kinds of orders, having regard to the circumstances of each case, will be made only in the application for renewed registration. The rules do not provide for independent proceedings for the cancellation of the renewal certificate. In effect, the Income-tax Officer, after setting aside his earlier wrong order made under a misapprehension, refuses renewal of the certificate of registration. If so, it follows that the order cancelling registration is nothing more than refusing to renew the certificate of registration. If that be the construction of an order made cancelling the certificate renewed such an order directly attracts the appellate jurisdiction conferred on the Appellate Assistant Commissioner under section 30 of the Act. " The Supreme Court interpreted the words " refusal to register a firm " in section 30 of the Indian Income-tax Act, 1922, to include " refusing to renew the registration and also cancelling the certificate so renewed ". We do not see why such an interpretati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing order : " The registration of the firm granted in the assessment year 1964-65 is not allowed to be continued for the assessment year 1965-66 and the firm is treated as unregistered for the purpose of tax. " The Allahabad High Court observed that an appeal lay only against an order refusing to register the firm, and since under section 184(7) all that the law required was a declaration that there was no change in the constitution of the firm or the shares of the partners as evidenced by the instrument of partnership, therefore, those considerations are not identical with the considerations under section 185(1) of the Act. The Allahabad High Court thought that section 185(1) applies only to a situation where the firm was being registered for the first time for an assessment year, and that an order under section 184(7) applies to a situation where the effect of registration already granted is sought to be continued for the subsequent assessment year. Therefore, after discussing the provisions of section 185(1) and section 184(7) of the Act, the High Court held that section 185(1) does not bring within its purview the provisions of section 184(7) of the Act. Moreover, the S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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