1990 (7) TMI 160 - AT - Income Tax

Issues Involved:
1. Delay in filing Form No. 12 for continuation of registration.
2. Jurisdiction of the Appellate Assistant Commissioner (AAC) to hear the appeal.
3. Interpretation of Section 185 and Section 184(7) of the Income-tax Act.
4. Applicability of the Kerala High Court's decision in CIT v. Pushpaka Travels.

Detailed Analysis:

1. Delay in Filing Form No. 12 for Continuation of Registration:
The assessee, a firm of four partners engaged in the manufacture of corrugated cartons, failed to file Form No. 12 for the continuation of registration within the stipulated time. The Income-tax Officer (ITO) noted that the form was filed on 3-8-1983, significantly past the deadline of 31-7-1981, and rejected the application for continuation of registration. The ITO emphasized that registration is a privilege, not a right, and must adhere strictly to the requirements of the Act and Rules. The ITO found no sufficient justification for the delay and was not satisfied that the firm was prevented by sufficient cause from making the application within the prescribed time.

2. Jurisdiction of the Appellate Assistant Commissioner (AAC) to Hear the Appeal:
The AAC directed the grant of registration, noting that the declaration seeking continuation of registration under Section 184(7) could be filed before the assessment is made. The AAC criticized the ITO for not clearly stating the reasons for rejecting the assessee's explanation for the delay. The revenue's representative argued that, based on the Kerala High Court's decision in CIT v. Pushpaka Travels, an appeal against the ITO's order was not maintainable under Section 246(1)(j). However, the assessee's counsel contended that the appeal was valid as the ITO's order was explicitly described as being under Section 185.

3. Interpretation of Section 185 and Section 184(7) of the Income-tax Act:
The Tribunal examined the provisions of Section 246(1)(j) and the Kerala High Court's principles. The order by the ITO was styled as "Order under section 185," making it appealable under Section 246(1)(j), despite the argument that it should have been passed under Section 184(7). The principle that the right to appeal depends on what the court or Tribunal actually does, and not what it should have done, was upheld. Therefore, the order was considered appealable, and the AAC had the jurisdiction to hear the appeal.

4. Applicability of the Kerala High Court's Decision in CIT v. Pushpaka Travels:
The Tribunal referred to the Kerala High Court's decision, which emphasized that an appeal is maintainable if the order is passed under an appealable provision, even if it should not have been passed under that provision. The Tribunal concluded that the ITO's order, although mislabelled under Section 185, was appealable. The Tribunal further noted that once an appeal is competent, the appellate authority must examine whether the powers exercised under Section 184(7) were correctly exercised.

The Tribunal found that the ITO did not adequately investigate the assessee's claim of filing Form No. 6 for an extension of time. The reason for the delay, i.e., the preparation of statements and necessary particulars, was not proven incorrect. The Tribunal highlighted the legislative intent behind the amendment to Section 184(7), which aimed to avoid hardship to taxpayers. Given the circumstances, the AAC's decision to condone the delay and direct the ITO to grant registration was upheld.

Conclusion:
The appeal by the revenue was dismissed, and the AAC's order to grant registration to the assessee was affirmed. The Tribunal emphasized the importance of adhering to the legislative intent and the principles of law established by the Kerala High Court.

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