1990 (10) TMI 28 - HC - Income Tax

Summary

Issues Involved:
1. Maintainability of the appeal before the Appellate Assistant Commissioner against the Income-tax Officer's refusal to allow continuation of registration under section 184(7) of the Income-tax Act, 1961.
2. Justification of the Appellate Assistant Commissioner in entertaining the appeal against the Income-tax Officer's refusal to condone the delay in filing the statutory declaration under section 184(7) of the Income-tax Act, 1961.

Issue-wise Detailed Analysis:

1. Maintainability of the Appeal:
The primary issue was whether the appeal was maintainable before the Appellate Assistant Commissioner against the order of the Income-tax Officer refusing to allow continuation of registration to the assessee-firm for the assessment year 1974-75 under section 184(7) of the Income-tax Act, 1961. The Tribunal held that the appeal was maintainable. The court referred to section 246 of the Act, specifically clauses (c) and (j), which allow an assessee aggrieved by certain orders of an Income-tax Officer to appeal to the Appellate Assistant Commissioner. The court noted that the majority of High Courts, including this court, have consistently held that an order refusing to condone the delay in filing the declaration under section 184(7) and thereby disentitling the firm to continuation of registration is appealable under section 246(c) or 246(j) or both.

2. Justification of the Appellate Assistant Commissioner:
The second issue was whether the Appellate Assistant Commissioner was justified in entertaining the appeal against the Income-tax Officer's refusal to condone the delay. The Income-tax Officer had refused to condone the delay despite the assessee's explanation of a partner's serious illness, supported by a medical prescription. The Appellate Assistant Commissioner found the explanation reasonable and allowed the appeal, granting continuation of registration. The Department contended that the refusal to condone the delay did not amount to an order under section 185(3) and thus was not appealable under section 246(j). However, the court emphasized that an order affecting the status of the firm, such as refusal to condone the delay in filing Form No. 12, is appealable under section 246(c). The court further clarified that the term "status" includes the classification of a firm as registered or unregistered, impacting its rights and liabilities under the Income-tax Act.

Conclusion:
The court affirmed that both questions were answered in the affirmative, in favor of the assessee and against the Revenue. The appeal was maintainable, and the Appellate Assistant Commissioner was justified in entertaining the appeal. The court transmitted a copy of the judgment to the Assistant Registrar, Income-tax Appellate Tribunal, 'B' Bench, Patna, as per section 260 of the Act.