9911796707
TMI Blog1990 (7) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... to a typographical error). According to the Income-tax Officer, declarations under section 184(7) were filed stating that there was no change in the constitution of the firm, but from the statements accompanying the return, it was seen that there was a change in the profit-sharing ratio of the partners. He, therefore, declined to grant registration on the ground that no application in Form 11A had been made for either of the assessment years. 2. In appeal, the AAC upheld the action of the Income-tax Officer after duly considering the plea of the assessee that it was by mistake that the Accountant had changed the ratio of the shares in the case of two of the partners. 3. In the appeal before us, the learned counsel submitted that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first assessment year and Rs. 3,504 for the latter assessment year. In making the assessments in the status of unregistered firm, the ITO had made the share allocations on the basis of 35% in the case of Ashok Kumar K. Jogani and 15% in the case of SML Bindu P. Jogani instead of 30% and 20% respectively according to the partnership deed. The plea of the assessee that the allocated share of profits were on the low side is borne out from the figures set out. The declaration for continuation of registration under section 184(7) is to be made in Form No. 12. This form reads as under " FORM NO. 12 [See rule 24] Declaration under section 184(7) of the Income-tax Act, 1961, for continuation of registration. TO The Income-tax Officer, ....... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was the change to which we have referred. The point for consideration is whether this change which took place in the allocation would disentitle the assessee the benefit of continuation of registration. Section 184(7), as it stood at the material time, reads as under : " (7) Where registration is granted to any firm for any assessment year, it shall have effect for every subsequent assessment year : Provided that --- (i) there is no change in the constitution of the firm or the shares of the partners as evidenced by the instrument of partnership on the basis of which the registration was granted ; and (ii) the firm furnishes, before the expiry of the time allowed under sub-section (1) or sub-section (2) of section 139 (whether fixed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oided if the income returned by such partner had been accepted as his correct income ; and no refund or other adjustment shall be claimable by any other partner by reason of such direction." [Emphasis supplied] The aforesaid provision shows that the Legislature has contemplated clearly the case of a registered firm where the distribution has been otherwise than in accordance with the shares of the partners as shown in the instrument of partnership. For this default, a penalty has been provided. If proviso (i) to section 184(7) is to be construed harmoniously with the provisions of section 271(4), the proviso to section 184(7) has to be read as to mean that registration is to be refused only where there is a change in the shares of the part ..... X X X X Extracts X X X X X X X X Extracts X X X X
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