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TMI Blog1982 (5) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... artners, the declaration could not be got signed by all of them and, therefore, could not be presented in time. The ITO recorded the statement wherein he mentioned that there was some dispute about the statement of accounts, and, therefore, the partners did not sign the declaration. However, the ITO concluded that nothing had been brought on record to show that there was actually any such dispute which prevented the partners from filing the declaration. He, therefore, did not allow continuation of registration and treated the status of the assessee as URF. This decision was endorsed by the AAC on appeal and this is the first dispute that the assessee has raised in this second appeal before us. 2. The other dispute relates to the amount on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elated return would constitute sufficient compliance with the provisions of sec. 184(7). "Sec. 185(2) of the IT Act, already provided that the ITO shall not reject an application for registration merely on the ground that the application is not in order but shall intimate the defect to the firm and give it an opportunity to rectify the defect within a period of one month from the date of such intimation. Although a specific provision to this effect has not been made in sub. sec. (7) of sec. 184 in regard to declaration filed for continuance of registration, the Board are of the view that in consonance with the spirit of the provision in sec. 185(2) a declaration u/s 184(7) should not be rejected merely on the ground that it is technically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied that the firm was prevented by sufficient cause from making the application before the end of the previous year. The power available to the ITO under the proviso is discretionary and in the interest of natural justice, it is necessary that the firm should be given a reasonable opportunity of being heard before the application is rejected as time -barred. After giving a hearing as aforesaid, the ITO should pass in every case, whether he allows or refused to entertain, an application which is time barred. In this connection, it may be mentioned that the ITO can pass an order u/s 185(1)(b) of the Act only in cases where he is satisfied that there was no genuine firm in existence during the previous year; the provisions of that section sil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fusal to grant registration in the two cases are somewhat different and, therefore, the decision in that case cannot govern the decision in this case. The ground is, therefore, accepted and it is ordered that the assessee is entitled to continuation of registration for this year u/s 184(7) of the IT Act, 1961. 6. So far as the other ground is concerned the counsel for the assessee drew our attention to the computation of total income filed by the assessee along with his return in which the amount of Rs.1,07,693 is shown to be the net amount received from the Executive Engineer, B R, Indore Div. on account of cost of the work done for the Government, The amount of Rs. 13,650 has been specifically mentioned and deducted from the total amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing used, fixed or incorporated in the works on the terms that they would remain the property of the Government and any surplus should be returned to the Government, the real total value of the entire contract would be the value minus the cost of such materials so supplied. Since no element for profit was involved in the turnover represented by the cost of the materials supplied by the Government of the appellant, the income or profit derived by the appellant from such contracts had to be determined on the basis of the value of the contracts represented by the cash payments received by the appellant from the Government exclusive of the cost of the materials received for being used, fixed or incorporated in the works. This being the law of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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