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TMI Blog2002 (9) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... s status could not be taken as a registered firm but only as an AOP as contemplated under section 184(5). 4. The Commissioner of Income-tax did not accept the contention that section 148(1) contemplates that once the Assessee files the return in response to section 148 notice, the return should be treated as one filed under section 139 and assessment should be completed as such. He held that section 148(1) does not stipulate that return filed in response to section 148(1) should be treated as one furnished under section 139 and it can only be treated as a return required to be furnished under section 139. He negatived the argument of the assessee that the continuity of the registration given to the firm is automatic and as such, the status cannot be changed holding that section 184(1) is subservient to section 184(5) which starts with the wording "notwithstanding anything contained in the foregoing provisions of the section". He also rejected the contention of the assessee that the assessment was completed under section 143(3) and not under section 144, and hence section 184(5) had no application. He held that if there is failure on the part of the assessee an mentioned in sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised under section 263 on the ground that the status of the assessee has not been determined correctly because under section 143, the Assessing Officer was not required to determine the status of the assessee, following decisions were also relied on: (a) Addl. CIT v. J.K. D'Costa [1982] 133 ITR 7 (Delhi) (b) CIT v. Nihal Chand Rekyan [2000] 242 ITR 45 (Delhi) (c) CIT v. C.R.K. Swamy [2002] 254 ITR 158 (Mad.) (d) P.P. Dinwala v. CIT [1995] 78 Taxman 421 (Cal.) 6. The next contention advanced by the assessee's representative is with regard to section 184(5) of the I.T Act, whether it is applicable in the instant case of the assessee and whether the status of the assessee should have been taken as 'AOP'. It is true, assessee's representative submitted that as per section 184(5) where in respect of any assessment year if there is a failure on the part of the assessee as contemplated u/s. 144(1)(a) the firm shall not and cannot be assessed as a firm but only the status can be treated as AOP. The failure mentioned in section 144(1)(a) is the omission to file a return under sections 139(1), 139(4) or 139(5) or non-compliance with the notice u/s. 142(1) or 142(2A) or 143(2). Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because of delay in filing the return the benefit of continuation of registration need not be denied to the assessee unless the assessment is made ex parts. Relying on the decision of the Madras High Court in the case of Special Steel Products v. CIT [2001] 249 ITR 504 assessee's representative contented that even in the case of return filed in pursuance of notice u/s 148, if no ex parte assessment is made, the above circular applies and the firm is entitled for registration. He submitted that the above Circular is binding on the officers of the department and it is valid even after the amendments made in the Income-tax Act regarding assessments of firms with effect from the assessment year 1993-94 onwards. Hence, the assessee's representative submitted that there is no justification for the Commissioner to hold that it is not necessary that for section 185(5) to be invoked, the assessment itself should been completed u/s. 144. The additional argument advanced for the assessment year is that there was appeal for this year and hence the assessment order completely merged with the order of the Commissioner (Appeals), and therefore, Commissioner's jurisdiction under section 263 is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 1961 Act, prior to the changes brought in section 185 as mentioned above with effect from 1-4-1993 by virtue of section 185(6), the registration once granted or deemed to have been granted under section 185(6) has effect and under section 184 for every subsequent year, provided that the firm furnishes an application before the expiry of the time for filing the return of income under section 139. After the changes brought in section 184 by virtue of section 184(3), assessee is entitled to the same capacity (as a registered firm) every subsequent year provided there is no change in the constitution of the firm or in the shares of the partners as evidenced in the partnership on the basis of which the firm was first granted registration. It is the argument of the Assessee's representative that only if there are changes, the firm needs to furnish a certified copy of the revised partnership deed along with the return of income and in such cases all the conditions are to be satisfied. We have no quarrel with this proposition put forward by the assessee's representative. 11. However, if there is a failure on the part of the assessee (a registered firm) as mentioned under section 144, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operate with the department cannot escape the consequences. Against such assessees, section 184(5) is intended. The contention that the assessee that he is excused as the assessment is not completed under section 144 has no much meaning. The assessee knew the consequences of its failure to file the return in time as contemplated under section 144(1)(a). 12. If we accept the assessee's plea that since the assessment is not completed under section 144 but under section 143(3), then as we noted above, section 184(5) becomes redundant. It is well established principle of interpretation of law that such interpretation should be avoided. A harmonious reading of the sections will lead us to the conclusion that in case of an assessee who fails to file the return under section 139 cannot have the same privilege and same status of an assessee who was prudent and discharged the duty cast upon him by the law promptly. What section 148 contemplates is that, if an assessee files the return, then for all procedural purposes, assessee's return should be treated as one filed under section 139 but not for any privileges like registration etc. 13. The decision relied on by the assessee in Badri N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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