1975 (11) TMI 12 - HC - Income Tax

Summary

Issues:
1. Interpretation of section 184(7) of the Income-tax Act, 1961 regarding the timing of declaration by the assessee.
2. Application of Central Board of Direct Taxes Circular No. 3P (XXV-22 of 1964) in registration renewal for the assessment year 1963-64.
3. Whether a declaration under section 184(7)(ii) can be considered as an application under section 184(1) for registration of a firm.

Analysis:
The case involved a reference under section 256(1) of the Income-tax Act, 1961, regarding the timing of a declaration made by the assessee under section 184(7) for the assessment year 1963-64. The firm in question had filed its return of income on January 25, 1964, and later furnished the declaration under section 184(7)(ii) on February 2, 1964. The Central Board of Direct Taxes issued Circular No. 3P on July 29, 1964. The firm's application for registration for the assessment year 1962-63 was rejected in 1966, leading to a dispute over the renewal of registration for the subsequent year.

The counsel for the assessee argued that the declaration should have been treated as an original application for registration, citing a judgment from the Allahabad High Court. However, the court disagreed, stating that the declaration under section 184(7)(ii) cannot be equated to an application under section 184(1) of the Act. The court emphasized that the firm must furnish a declaration along with its return of income for the concerned assessment year to enjoy the benefit of earlier registration, which was not done in this case.

Furthermore, the court highlighted the distinction between the prescribed forms for registration under section 184(1) (Forms 11 and 11A) and section 184(7) (Form 12), indicating that a declaration under section 184(7)(ii) cannot substitute an application for registration. The court also noted that the Income-tax Officer cannot extend the time prescribed for furnishing the declaration, as it is mandatory and must be done along with the return of income for the relevant assessment year.

Ultimately, the court rejected the contentions of the assessee's counsel, ruling in favor of the department. The judgment emphasized the importance of complying with the statutory requirements for registration renewal and the mandatory nature of furnishing the declaration under section 184(7)(ii) within the specified timeframe. No costs were awarded in this case.

Overall, the judgment clarified the interpretation of relevant provisions under the Income-tax Act, 1961, and emphasized the significance of adhering to statutory timelines and procedures for registration renewal of firms.