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Issues Involved:
1. Whether the Appellate Tribunal was correct in law in directing the Income-tax Officer to grant continuation of registration, even though Form No. 12 was not really signed by all the partners. Detailed Analysis: Issue 1: Validity of Continuation of Registration Without All Partners' Signatures Facts: The assessee-firm was originally constituted under a deed of partnership dated January 1, 1964, and reconstituted on August 16, 1973. The firm consisted of three partners. For the assessment year 1977-78, an application for continuation of registration was filed on June 30, 1977, in Form No. 12. The form was not signed by all three partners: one partner had died, another was absconding, and the form was signed by the deceased partner's widow and the second partner, who also signed on behalf of her absconding brother. Income-tax Officer's Decision: The Income-tax Officer held that the declaration in Form No. 12 was not in order since it was not signed by all the three partners, thus registration could not be continued. Appellate Assistant Commissioner's Decision: The Appellate Assistant Commissioner accepted the declaration and directed the continuance of the registration. Appellate Tribunal's Decision: The Appellate Tribunal found that the firm had dissolved at the close of the accounting year and the business was continued as a proprietary concern of one partner until his death. The Tribunal concluded that the declaration should be signed by the partners available on the date of declaration, thus confirming the order of the Appellate Assistant Commissioner. Department's Argument: The Department argued that under rule 22(5), all partners should sign Form No. 12 for seeking continuation of registration. The rules applicable for seeking fresh registration should also apply for renewal. The Department cited several judgments to support the argument that strict compliance with the rules is necessary. Assessee's Argument: The assessee contended that for continuation of registration under section 184(7), it is sufficient if the declaration is signed by the partners available on the date of filing Form No. 12. The assessee argued that the conditions for obtaining fresh registration under section 184(1) need not be strictly followed for continuation under section 184(7). The genuineness of the firm was not disputed by the Department. Court's Analysis: The court examined the provisions of section 184(7) and rule 22(5) of the Income-tax Rules. It was noted that registration is a privilege granted upon satisfying certain conditions. The court referred to several judgments, including those of the Supreme Court, emphasizing strict compliance with the rules for registration and continuation. Key Judgments Referenced: - J. Subba Rao and Sons v. CIT [1970] 77 ITR 241 (Mys): The Mysore High Court held that all partners must sign the declaration personally for continuation of registration. - Sri Ramamohan Motor Service v. CIT [1973] 89 ITR 274 (SC): The Supreme Court held that strict compliance with the requirements of section 26A and the relevant rules is necessary. - Khanjan Lal Sewak Ram v. CIT [1972] 83 ITR 175 (SC): The Supreme Court held that an application for renewal of registration must comply with the conditions prescribed. Conclusion: The court concluded that Form No. 12 filed by the assessee was not in strict compliance with the provisions of rule 24 read with rule 22(5) since it was not signed by all partners. The court preferred to follow the judgments of the Supreme Court and the Mysore High Court over the Karnataka High Court's decision in CIT (Addl.) v. S. V. Ratnaswamy and Sons. Therefore, the court answered the question in the negative and in favor of the Department, denying the continuation of registration. Final Judgment: The court ruled that the Appellate Tribunal was not correct in law in directing the Income-tax Officer to grant continuation of registration without all partners signing Form No. 12. The judgment was in favor of the Department, with no costs awarded.
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