1987 (3) TMI 76 - HC - Income Tax

Summary

Issues:
1. Appealability of the question of registration under section 184(7) before the Appellate Assistant Commissioner.
2. Rectifiability of a defect in the declaration filed in Form No. 12 by the partners of the firm.

Analysis:

Issue 1:
The case involved a partnership firm seeking registration under section 184(7) of the Income-tax Act for the assessment year 1973-74. The original application for registration was signed by only one partner, leading the Income-tax Officer to reject the registration. The Appellate Assistant Commissioner, however, accepted the explanation that all partners were not available to sign the application simultaneously. The Department appealed to the Tribunal, arguing that the appeal on the status of the firm was not maintainable. The Tribunal rejected the appeal, leading to the Revenue filing for reference to the High Court. The High Court, citing precedents, held that the question of registration under section 184(7) was indeed appealable before the Appellate Assistant Commissioner. The court emphasized that the rejection of a registration request along with an assessment order is appealable, as it pertains to the status of the assessee.

Issue 2:
The second issue revolved around the rectifiability of a defect in the declaration filed in Form No. 12 by the partners of the firm. Citing previous judgments, the High Court highlighted that if a defect in the application for registration is intimated by the Income-tax Officer and rectified within one month, registration cannot be refused. In this case, the defect was the absence of signatures from all partners, which was rectified before the assessment order. The High Court upheld the decisions of the Appellate Assistant Commissioner and the Tribunal, stating that the partners were entitled to rectify the defect in the declaration. Consequently, the High Court ruled in favor of the assessee, affirming that the defect in Form No. 12 could be corrected subsequently by the partners of the firm. The court concluded by answering both questions in favor of the assessee and awarded costs to the assessee, directing the Revenue to pay a hearing fee.

In conclusion, the High Court's judgment clarified the appealability of the registration question and affirmed the rectifiability of the defect in the declaration filed by the partners of the firm, ultimately ruling in favor of the assessee on both issues.