1989 (3) TMI 163 - AT - Income Tax

Summary

Issues:
1. Refusal of continuation of registration to the assessee firm by the ITO for the assessment year.
2. Validity of form No. 12 filed by the assessee firm for continuation of registration.
3. Interpretation of rules regarding filing of declaration for continuation of registration.

Analysis:
The appeal was against the order of the AAC confirming the refusal of continuation of registration to the assessee firm by the ITO for the assessment year 1981-82. The firm was constituted with four partners, and registration was granted for the previous year. However, a change in the firm's constitution occurred before the assessment year under appeal. The ITO raised concerns about the authenticity of the form No. 12 filed by the assessee firm, specifically regarding the signatures of one of the partners. The ITO concluded that the form was false and fabricated, leading to the refusal of continuation of registration.

Upon review, the Tribunal analyzed the rules governing the filing of declaration for continuation of registration. It was noted that the form No. 12 filed on 25th July, 1981, was in accordance with the rules and signed by the partners constituting the firm at that time. The subsequent form filed on 15th Sept., 1983, was deemed non-est in law due to discrepancies in signatures. The Tribunal emphasized the importance of the partners' signatures on the form at the time of application, as per the relevant rules.

The Tribunal referred to a judgment of the Karnataka High Court, which clarified that the declaration in form No. 12 should reflect the partners of the firm as existing at the time of making the declaration. The Tribunal concluded that the authorities erred in refusing continuation of registration based on the form filed in 1983, as the valid form filed in 1981 met the requirements. The Tribunal highlighted that the firm was genuinely constituted, as previously determined by the AAC for the assessment year 1980-81, and the ITO should have granted registration based on the valid form filed in 1981.

In light of the above analysis, the Tribunal allowed the appeal, setting aside the orders of the authorities and directing the ITO to consider the form No. 12 filed on 25th July, 1981, for granting continuation of registration to the firm for the assessment year 1981-82.