1977 (6) TMI 46 - AT - Income Tax

Summary

Issues Involved:
1. Jurisdiction of the Appellate Assistant Commissioner (AAC) to entertain the question of status in a quantum appeal.
2. Validity of the partnership deed and registration.
3. Justification for condonation of delay in filing Form No. 11A.

Detailed Analysis:

1. Jurisdiction of the AAC to Entertain the Question of Status in a Quantum Appeal:
The Revenue contended that the AAC had no jurisdiction to allow the assessee to raise the question of status in the quantum appeal when registration had been refused due to the delay in filing the application. The AAC, however, dealt with the objection on merits, concluding that the Income-tax Officer (ITO) erred in not condoning the delay. The AAC directed the ITO to allow registration for the firm for the assessment year.

The tribunal upheld the AAC's jurisdiction, citing that the AAC acted validly in entertaining the assessee's objection to being assessed as an unregistered firm and in disposing of the objection on merits. The tribunal referenced previous orders and legal precedents, noting that the AAC could adjudicate on refusal of registration in an appeal from an order u/s 143(3).

2. Validity of the Partnership Deed and Registration:
The ITO had concluded that there was "no proper deed of partnership during the accounting year," citing the absence of a duly executed and stamped partnership deed. The AAC, however, referred to the decision in the case of Commissioner of Income-tax vs. R. Dwarkadas & Co., interpreting "instrument of partnership" in a collective sense. The AAC considered both the original partnership deed and the supplementary agreement dated 25th Jan, 1971, concluding that there was a valid deed of partnership operative during the relevant previous year.

The tribunal agreed with the AAC's conclusion, affirming that the documents collectively constituted a valid partnership deed, thus granting registration to the assessee firm.

3. Justification for Condonation of Delay in Filing Form No. 11A:
The ITO refused to condone the delay in filing Form No. 11A, which was filed 1091 days late. The AAC, however, held that the delay should have been condoned, considering the assessee's genuine belief that only a declaration in Form No. 12 was necessary. The AAC referenced the Andhra Pradesh High Court decision in Maganti Ramachandra Rao & Co. vs. Commissioner of Income-tax, which emphasized that technical delays should be condoned when a litigant is diligently pursuing their claim.

The tribunal upheld the AAC's decision to condone the delay, noting that the assessee had acted in good faith and filed the necessary documents as soon as the ITO's different point of view was brought to their attention.

Conclusion:
The tribunal dismissed both appeals by the Revenue, affirming the AAC's jurisdiction to entertain the question of status in the quantum appeal, the validity of the partnership deed, and the justification for condoning the delay in filing Form No. 11A.