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TMI Blog1987 (6) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... ranting of registration, return of income is necessary while the reading of the section does not indicate such requirement. Further it was pleaded that the return could not be filed as the firm suffered a loss and thereby dispute between the firm. He pleaded that up to assessment year 1971-72 the requirement under sec. 184(7) was to file form no. 12 along with the return of income while for and from assessment year 1972-73 the requirement has been modified to filing of such request for continuation of registration at any time before the return of income is filed or within the extended time as allowed under the Act for filing of the return. He further pleaded that under sec. 186 the requirement is that there must have been registration origi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rescribed manner." After the amendment, the proviso reads as under--- " The firm furnishes before the expiry of the time allowed u/s 139(1) or (2) (whether originally fixed or on extension) for furnishing the return of income for such subsequent assessment year, a declaration to that effect, in the prescribed form and verified in the prescribed manner, so however, that, where the ITO is satisfied that the firm was prevented by sufficient cause from furnishing the declaration within the time so allowed, he may allow the firm to furnish the declaration at any time before the assessment is made." 4. The plea of the assessee is that since in the amended proviso, the words " along with its return of income " are not there, form 12 filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clause under which the declaration for continuation of registration may be furnished, not necessarily along with the return of income, but before the expiry of the time allowed for furnishing the return, whether fixed originally or on extension. Further, where the Income -tax Officer is satisfied that the firm was prevented by sufficient cause from furnishing the declaration within the said period, he may allow the declaration to be furnished at any time before the assessment is made." 6. The reading of the abovementioned circular clearly indicates that the amended provision has only stated that form no. 12 could be filed separately and not necessarily along with the return of income. Also the words in the amended proviso only goes to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the provisions of sections 70 to 75. (3) When any of the partners of a registered firm is a non-resident, the tax on his share in the income of the firm shall be assessed on the firm at the rate or rates which would be applicable if it were assessed on him personally, and the tax so assessed shall be paid by the firm. (4) A registered firm may retain out of the share of each partner in the income of the firm a sum not exceeding thirty per cent thereof until such time as the tax which may be levied on the partner in respect of that share is paid by him ; and where the tax so levied cannot be recovered from the partner, whether wholly or in part, the firm shall be liable to pay the tax, to the extent of the amount retained or could hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the prescribed form and verified in the prescribed manner, so, however, that where the Income-tax Officer is satisfied that the firm was prevented by sufficient cause from furnishing the declaration within the time so allowed, he may allow the firm to furnish the declaration at any time before the assessment is made." " 186. (2) If, where a firm has been registered or its registration has effect under sub-section (7) of section 184 for any assessment year, there is, on the part of the firm, any such failure in respect of the assessment year as is mentioned in section 144, the Income-tax Officer may cancel the registration of the firm for the assessment year, after giving the firm not less than fourteen days' notice intimating his intenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r charge of tax at a lower rate. It is for this reason, it is observed above that the grant of registration is not a matter of a right but of a privilege which could be enjoyed only when full compliance of the statute exists. 9. This has been so provided in sec. 186(2), which empowers an ITO to cancel the registration to a firm which could be effective for the subsequent years as provided in sec. 184(7), in a case where the firm files no return even under sec. 139(4) i.e. a belated return at any time before the expiry of time for making of an assessment. The action of the ITO is therefore well within law in invoking sec. 186 and cancelling of the registration to the firm and has been rightly upheld by the AAC. We confirm the same. 10. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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