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TMI Blog1977 (6) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... ration, the assessee firm filed an application in Form No. 12 for continuation of registration under s. 187(7) of the IT Act, 1961. The ITO held as follows: (i) That since the assessee firm was treated as unregistered firm in the immediately preceding year i.e., the asst. yr. 1971-72, it should have filed an application in Form No. 11 for grant of registration for the asst. yr. 1972-73. (ii) That since the assessment for the assessment year under consideration was completed under s. 144 for non-compliance with the notice under s. 142(1), the assessee was not entitled to registration. (iii) That the assessee had failed to prove the distribution of profits amongst the partners in accordance with the terms of the partnership deed. The IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of the appellant firm, a failure as mentioned in s. 144 namely, the non-compliance with the terms of a notice issued by the ITO under sub-s. (1) of s. 142, the ITO, was fully justified in refusing to register the firm on the basis of the declaration filed by the latter in form No. 12. The refusal of registration by the ITO to the appellant firm is, therefore, in accordance with the provisions of s. 185(5) of the IT Act, and I, therefore, decline to interfere". 5. Aggrieved by the order of the AAC, the assessee has filed the present appeal. 6. After going through the record and hearing the Representatives of the parties, we are inclined to accept this appeal. 7. The first question for consideration is whether the assessee was justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee filed the declaration in Form 12 within the time allowed by law. In these circumstances, the assessee was entitled to continuation of registration under s. 184(7) of the IT Act, 1961. 8. The second question for consideration is whether the ITO could refuse registration to the assessee firm under s. 185(5). This section reads as follows: "Notwithstanding anything contained in this section where, in respect of any assessment year there is, on the part of a firm, any such failure as is mentioned in s. 144, the ITO may refuse to register the firm for the assessment year." The condition of Representative of the assessee before us is that this being a case of "continuation of registration", the ITO could, if at all, resort to s. 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the provisions of that sub-section would be attracted "notwithstanding anything contained in the section". Thus, the sub-section overrides the other provisions of s. 185. By virtue of provisions of sub-s. (5) of s. 185, an ITO can refuse registration to a firm only where an application for initial registration has been made s. 184 makes distinction between initial registration and mere continuation of registration for subsequent years. It seems that the provisions of sub-s. (5) are not attracted where a declaration for continuation of registration under s. 184(7) has been furnished." 10. We are, therefore, of the opinion that the ITO wrongly refused continuation of registration to the assessee firm under s. 185(5). It is not the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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