TMI Blog1975 (1) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment of the assessee was made by the assessing officer by treating it as an unregistered firm and not allowing renewal to it on the belated submission of the declaration in due form. The assessee preferred an appeal before the Appellate Assistant Commissioner who refused to interfere holding that no appeal lay before him against the order of refusal passed by the Income-tax Officer. The Appellate Assistant Commissioner also held that the word "status" did not cover this aspect of the matter and that, therefore, keeping in view the provisions of section 246 of the Act, the appeal before him could not be entertained. The assessee then preferred a second appeal before the Appellate Tribunal. The Tribunal while deciding in favour of the assessee held that the appeal was maintainable also in the matter concerning the status of the assessee and further that renewal could not be refused merely because the declaration in due form had not been literally submitted along with the return filed by the assessee. The Tribunal held: " Therefore, even though the necessary declaration under section 184(7) was filed much after the filing of the return but before the assessment was taken up, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the prescribed manner should be filed "along with its return of income for the assessment year concerned", it must be so construed as to give full effect to all the words used by Parliament in the words quoted above. That means, a strict literal adherence to the statutory provision must be shown by submitting the declaration along with the return ; both returns and the required declaration must be simultaneous and stitched up together so as to enable an assessee to the benefits of recurring renewal so long as the constitution of the firm and the shares of the partners were not changed under the provisions of section 184(7). Although the matter is one of first impression, having considered the point involved carefully, I think there is not much substance in the contention of learned standing counsel for the department. In this context I shall first refer to the necessary legislative changes in the provision with regard to the renewal of registration as it stood before the 1961 Act came into force and as it stood in the Act before the Amendment Act, 1970. Under section 26A of the Indian Income-tax Act, 1922, registration of a firm was a ceremony to be performed every year. Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he declaration in due form at any time before the assessment is made. For, giving too literal a construction to the provision would lead to absurdities. For example, if an assessee-firm files a declaration in due form, say on the 29th of June in any particular year, for the previous accounting year, but files the return for the same previous year on the 30th of June, that is, the day which is the next succeeding, can it be held that the legislature has intended to deprive the assessee of the benefits of section 184(7)? It would be putting a premium upon technicality and would be piling unreason thereon to hold that the legislature had so intended the consequences to ensue. It is for this reason that in my view the provisions of proviso (ii) to sub-section (7) of section 184 cannot be so read to mean that a physical accompaniment of the return and the declaration in the prescribed form must be held to be a necessary concomitant before an order of automatic renewal can be passed. All that the legislature intended was that the return should be duly filed and that the declaration should be duly made and both the documents must be before the assessing authority at the time when he is ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppropriate cases on his being satisfied that the firm was prevented by sufficient cause from complying with the statutory requirements within the time specified. For example, sub-section (4) of section 184 lays down that the application for registration of a firm shall be made before the end of the previous year for the assessment year in respect of which registration is sought but at the same time the proviso to that sub-section empowers the Income-tax Officer to entertain an application made even after the end of the previous year on his being satisfied that there was sufficient cause preventing the firm from making the application before the time specified. So also when sub-section (5) of section 184 has made it mandatory that the application shall be accompanied by the original instrument evidencing the partnership, the proviso to that sub-section also gave the corresponding power to the Income-tax Officer in appropriate cases to accept a certified copy of the instrument with a duplicate copy of the original instrument being accompanied with the application. If, therefore, in my view, any rigid time limit were to be laid down or specified by the legislature, merely by inserting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lding that the term "along with its return of income" used in proviso (ii.) to section 184(7) is merely directory and all that is necessary, as I have stated earlier, is that at the time when the Income-tax Officer is applying his mind for the purpose of assessment to the return of the firm there must also be before him a declaration in the prescribed form and verified in the prescribed manner stating that there has been 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. The Tribunal, I should say, has rightly taken the view that in the absence of any specific provision having been provided in Section 184, either in sub-section (7) or in other sub-sections for refusal to continue the registration of the assessee-firm for its failure to file the declaration along with the return in the absence of any punitive results following the non-compliance of the statutory provisions regarding the filing of the declaration along with the return literally, it could not be held that the aforesaid provision was mandatory in nature. Learned standing counsel for the department n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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