1982 (12) TMI 81 - AT - Income Tax

Summary

Issues:
1. Refusal of registration to the assessee's firm by the ITO.
2. Determination of the genuineness of the assessee-firm for the assessment year 1978-79.
3. Non-submission of Form No. 12A within the prescribed time.
4. Interpretation of the time-limit prescribed under rule 24A in relation to section 185(1), Explanation.
5. Compliance with the law by the ITO in considering the belated submission of Form No. 12A.
6. Jurisdiction of the ITO in granting permission to file Form No. 12A post the due date.

Detailed Analysis:
The appeal before the Appellate Tribunal ITAT Hyderabad-A challenged the refusal of registration to the assessee's firm by the ITO for the assessment year 1978-79, based on the finding that the firm was not genuine. The firm comprised 5 partners, including individuals acting as benamidars for their family members. The firm applied for registration under section 185 of the Income-tax Act, 1961, but failed to submit Form No. 12A within the prescribed time, as required by rule 24A. The assessee later requested to file Form No. 12A after the deadline, citing misunderstanding and seeking condonation of the delay. The ITO completed the assessment before considering this request, leading to the appeal (para 1-2).

The primary issue revolved around the interpretation of the time-limit prescribed under rule 24A in relation to section 185(1), Explanation of the Income-tax Act. The Tribunal referred to previous judgments by the Supreme Court and High Courts, emphasizing that the expression 'in the prescribed manner' does not inherently include a time element. Relying on the decisions, the Tribunal concluded that the time element specified in rule 24A exceeded the mandate of section 185(1), Explanation. The ITO's reliance on rule 24A to reject the belated submission of Form No. 12A was deemed contrary to the law and the established legal principles (para 3).

The Tribunal criticized the ITO's refusal to allow the assessee to file Form No. 12A post the due date, despite the timely request made by the firm. By denying this request, the ITO was seen as failing to exercise lawful jurisdiction and infringing upon the legal rights of the assessee-firm. Consequently, the Tribunal set aside the orders of the lower authorities and directed the ITO to permit the filing of Form No. 12A in accordance with the assessee's request, emphasizing the importance of following the law in determining the registration of the firm (para 4-5).

In conclusion, the Appellate Tribunal allowed the appeal, highlighting the necessity for the ITO to provide a fair opportunity for the assessee-firm to submit Form No. 12A as requested. The decision aimed to uphold the legal rights of the firm and ensure compliance with the statutory provisions governing registration under the Income-tax Act, 1961 (para 6).