2004 (7) TMI 54 - HC - Income Tax

Firm - Continuance Of Registration - assessee-firm filed a return of income for the assessment year 1990-91 in the status of URF. During the course of assessment proceedings under section 143(3), the assessee filed an application for registration with the partnership deed on December 17, 1992, and requested for condonation of delay stating the reasons that the deed could not be filed on March 31, 1990 as it remained with the authorised representative - Whether, Tribunal is justified in law in allowing registration to the assessee-firm whereas the assessee-firm itself had filed a return in the status of URF, and this case was of fresh registration of the firm? - assessee has contended that the partnership has equal share. He has contended that the shares of the partners have been computed accordingly in four equal shares and for this he has referred to computation of profits - There is no dispute on the fact that the power is there, for condonation of delay in case the application allowing the partnership deed has not been filed along with the return filed. - when the firm is genuine and reasons are there for delay, we see no reason to interfere with the impugned order of the Tribunal.

Summary

Issues:
1. Allowance of registration to the assessee-firm despite filing a return in the status of URF.
2. Condonation of delay in filing the partnership deed for registration.

Issue 1: Allowance of Registration
The assessee-firm initially filed a return of income for the assessment year as URF. Subsequently, during assessment proceedings, the firm applied for registration with the partnership deed, citing reasons for the delay in filing the deed. The Assessing Officer rejected the application, a decision upheld by the Commissioner of Appeals. However, the Tribunal allowed the appeal, emphasizing reasonable grounds for condonation of delay and granting registration to the firm. The Tribunal considered the firm's establishment date, submission of requisite forms during assessment proceedings, and the firm's registration with relevant authorities as contractor.

Issue 2: Condonation of Delay
The delay in filing the partnership deed was attributed to the deed being inadvertently retained by the authorized representative of the assessee. The authorized representative confirmed this delay before the Assessing Officer. The firm's counsel argued that the delay was due to the forms being with the authorized representative and that the firm's genuine existence through a valid partnership deed, registered with appropriate authorities, should be considered. The Departmental Representative supported the lower authorities' decisions, citing profit allocation discrepancies and challenging the equal profit share claimed by the firm.

The judgment emphasized the discretionary power to condone delay if the partnership deed was not filed with the return. It acknowledged the firm's genuineness and the existence of valid reasons for the delay. The court found no reason to interfere with the Tribunal's decision to allow registration to the genuine firm. Consequently, the appeal was dismissed, affirming the Tribunal's order in favor of the assessee-firm.