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Issues:
1. Interpretation of section 184(7) of the Income-tax Act regarding the requirement of filing a declaration in the prescribed form for registration renewal. 2. Applicability of the amended form for declaration post-April 1, 1971, to firms registered before that date. 3. The impact of the Explanation added to section 185 on the registration process for firms. Analysis: The judgment addressed the issue of whether a firm, registered prior to April 1, 1971, was required to file a declaration in the amended form for registration renewal under section 184(7) of the Income-tax Act. The firm, consisting of 19 partners, had filed a declaration in the old form along with the return of income for the assessment year 1971-72. The Income-tax Officer rejected the registration for that year due to the declaration not being in the latest prescribed form. However, the Tribunal held that firms registered before April 1, 1971, were not obligated to file the declaration in the amended form introduced post that date. The court emphasized that the declaration under section 184(7) only pertains to confirming no change in the firm's constitution or partners' shares as per the partnership instrument. The court clarified that the amended form requiring a declaration on benamidar partners was not mandatory for firms registered before April 1, 1971. The judgment further delved into the procedural aspects of firm registration under sections 185 and 186 of the Income-tax Act. It highlighted that section 185 deals with the initial registration process, while section 186 pertains to cancellation of registration in case of non-existence of a genuine firm. The court noted that the addition of an Explanation to section 185 from April 1, 1971, regarding benamidar partners did not alter the fundamental requirement of the declaration under section 184(7) for registration renewal. The court clarified that any need for a specific declaration on benamidar partners was relevant for post-April 1, 1971, registrations, and the old Form No. 12 sufficed for firms registered before that date. In conclusion, the court held that the continuation of registration granted to a firm before April 1, 1971, should not be denied solely based on the use of the old declaration form. The judgment favored the assessee, emphasizing that the prescribed declaration form under section 184(7) primarily concerns confirming the stability of the firm's structure, and any additional requirements introduced post-April 1, 1971, do not apply retroactively. The court's decision affirmed that the registration renewal process for firms registered before April 1, 1971, should adhere to the requirements in place at the time of initial registration, thereby resolving the ambiguity surrounding the declaration forms for such firms.
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