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TMI Blog1982 (2) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... led the declaration in Form No. 12 for the continuation of the registration for the assessment year 1976-77 along with the return under section 139(1) of the Act on 16-8-1976. The delay of 16 days in filing the declaration was explained in an application for condoning the delay. The ITO considered the explanation as not satisfactory and rejected the petition. In completing the assessment the firm was treated as unregistered. The ITO also noticed a peak credit of Rs. 29,800 as on 31-7-1975 in the books of account. The assessee stated that these credits represented credit purchases from farmers and dealers and that the dealers, being unregistered under the Sales Tax Act, had given bogus addresses. The books as on 31-7-1975 were credited with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stration was not justified. Accepting this contention, the AAC condoned the delay and directed the ITO to grant registration to the firm. 4. We shall first deal with the status of the assessee, before going to the quantum appeal. The assessee had been assessed as a registered firm in the assessment year 1975-76. There was no change in the constitution of the firm in the previous year relevant to the assessment year 1976-77. The declaration filed on 16-8-1976 was, however, delayed by 16 days and the application for condoning the delay was rejected by the ITO and the assessee was refused continuation of registration. According to the revenue, the order of the ITO, thus, rejecting the application for condonation of the delay, is one based un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income and in fact the declaration was filed along with the return of income for 1976-77 and that there was sufficient cause for the delay. Reference was made to the decisions reported in New Orissa Traders v. CIT [1977] 107 ITR 553 (Ori.), CIT v. New India Restaurant [1978] 111 ITR 197 (Gauhati), Indo Traders v. CIT [1978] 111 ITR 355 (Cal.), Excel Motors v. CIT [1980] 122 ITR 379 (Ker.), CIT v. Tirur Medical Hall [1980] 126 ITR 395 (Ker.), CIT v. Dineshchandra Industries [1975] 100 ITR 660 (Guj.) and Addl. CIT v. Chekka Ayyanna [1977] 106 ITR 313 (AP). 6. Under section 246(j) any assessee aggrieved by an order of the ITO under clause (b) of sub-section (1) or under sub-section (2) or sub-section (3) or sub-section (5) of section 185 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a declaration to that effect in the prescribed form within the time allowed. The sub-section clearly states that where registration is granted to a firm in any assessment year, it shall have the effect for every succeeding assessment year and the proviso only deals with the conditions to be satisfied for that purpose. It would mean that if the conditions are satisfied, the effect is the grant of registration for the assessment year in which the declaration is filed. It is only when a change has taken place in any previous year that the firm has to apply for any fresh registration. Thus, if the ITO accepts the declaration filed by the assessee and allows continuation of registration, it has the effect of registration for that assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 185(1)(b) and, hence, such an order is appealable under section 246(j) either from the view point of section 185(1)(b) or section 185(3). The Court held that an order passed by the ITO under section 184(7) refusing to allow continuation of registration to the firm is appealable to the AAC under section 246(j) since it amounts to refusal to grant registration. The decision of the Gujarat High Court reported in Dineshchandra Industries and that of the Allahabad High Court in Ashwani Kumar Maksudan Lal v. Addl. CIT [1972] 83 ITR 854 were referred to. It is to be noted that sub-section (7) of section 184 was amended with effect from 1-4-1971 and the decisions relied on by the departmental representative, i.e., New India Restaurant, Indo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ITO in his order of assessment and, therefore, the appeal preferred by the assessee to the AAC against the order of the ITO was competent. In the light of what has been thus stated in these decisions, we find no merit in the contention of the revenue that the appeal before the AAC was incompetent. The explanation offered by the assessee has been accepted by the AAC as satisfactory in the circumstances of the case. The conclusion does not call for any interference by us. The departmental appeal relating to the status of the assessee must, therefore, fail. 8. The other appeal relating to the quantum has also to be dismissed. The AAC in setting aside the assessment has directed the ITO to make necessary enquiries before coming to any concl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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