1981 (3) TMI 39 - HC - Income Tax

Summary

Issues:
1. Delay in filing registration applications for assessment years 1963-64 and 1964-65.
2. Justifiability of the refusal of registration to the assessee-firm for the years in question.

Analysis:
The case involved a reference under section 256(1) of the Income Tax Act by the Income-tax Appellate Tribunal, Indore Bench, regarding the delay in filing registration applications for the assessment years 1963-64 and 1964-65. The primary questions referred for opinion were whether the Tribunal was correct in stating that the applications were not filed within a reasonable time and whether the refusal of registration by the authorities was justified for both years. The material facts revealed that the applications for registration were belatedly filed on January 20, 1968, and January 3, 1974, respectively, for the two assessment years. The Income Tax Officer (ITO) refused registration citing the delay and lack of reasonable cause for the delay.

The Appellate Tribunal upheld the refusal of registration based on the fact that registration had been previously refused for the years 1960-61, 1961-62, and 1962-63, with no grounds shown for condonation of the delay. Furthermore, the Tribunal noted that no fresh grounds for granting registration were presented, and the assessee had not maintained proper account books. The Tribunal emphasized that even if the delay was condoned, registration could not be granted on merits.

The court analyzed Section 184(4) of the Income Tax Act, which mandates that registration applications should be filed before the end of the previous year for the assessment year in question. The court noted that the applications were significantly delayed and no explanation or condonation of the delay was sought under the proviso to Section 184(4). The court agreed with the Tribunal that the applications were not filed within a reasonable time, considering the lack of justifiable cause for the delay.

Regarding the argument raised by the assessee's counsel about the rejection of the application for the preceding year, the court rejected it, stating that the explanation was not raised before the ITO for condonation of the delay and was irrelevant to the delay in filing the registration applications. The court affirmed the Tribunal's decision on both the delay and the refusal of registration on merits, emphasizing that the Tribunal's findings on the application's merits were factual and not challenged by the assessee.

In conclusion, the court answered all three questions in favor of the revenue and against the assessee, upholding the refusal of registration for the assessment years in question and attributing the costs of the reference to the assessee.