1986 (7) TMI 159 - AT - Income Tax

Summary

Issues:
Continuance of registration under s. 184(7) allowed by AAC but rejected by ITO.

Analysis:
The dispute in this case revolves around the continuation of registration for a partnership firm for the assessment year 1981-82. The firm, consisting of two partners with equal shares, had a history of accepted registration claims in the past. However, for the year in question, the Form No. 12 required for registration was not initially filed along with the return. Despite multiple reminders from the ITO, the form was only submitted after the assessment was framed under s. 143(1) with a status of URF. The ITO rejected the claim for registration continuation citing the delay and the apparent disregard of the assessee to comply with the requirements.

The AAC, on the other hand, accepted the assessee's claim for continuation of registration based on the argument that the Form No. 12 was filed before the assessment under s. 143(3). The counsel for the assessee contended that the assessment under s. 143(1) was essentially nullified due to subsequent proceedings and that the filing of Form No. 12 was not mandatory but directory. The counsel relied on a case law to support this argument.

The departmental representative argued against the AAC's decision, emphasizing that registration continuation is not an absolute right and should not be granted if the assessee displays carelessness. However, the Tribunal upheld the AAC's decision, noting that the delay in filing Form No. 12 was condoned based on the affidavits provided by the partners and the accountant. The Tribunal found that the delay did not outweigh the consistent history of registration for the firm and the partners, especially since the ITO had granted registration in the past and subsequent years.

Ultimately, the Tribunal confirmed the AAC's decision, dismissing the revenue's appeal. The judgment highlights the importance of procedural compliance while also considering the factual background and the consistency of past practices in determining the continuation of registration for a partnership firm.