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TMI Blog1983 (5) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... reason ; as one of its partners was not well. The ITO was of the view that the assessee has failed to substantiate the stand taken by it for the condonation of the delay for late filing of Form No. 12, and, therefore, he observed that in the circumstances, the continuation of registration sought for was refused under section 184(7) of the Act as the time for filing the return expired on 31-7-1978 and the assessee should have furnished Form No. 12 before the expiry of the time allowed under the Act. Accordingly, he refused the continuation of registration and found that the original registration granted would not have effect for the assessment year under consideration and the status of the assessee was treated as that of unregistered firm. 4. The assessee, being aggrieved and dissatisfied with the order of the ITO, preferred an appeal before the AAC and thereby contended that the rejection made by the ITO of the application under section 184(7) for the grant of renewal of registration for the assessment year under appeal, was unjustified ; that the rejection of Form No. 12 or denial of status of registered firm referred to above was part and parcel of the assessment order passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h subsequent assessment year, a declaration to that effect, in the prescribed form [see Form No. 12 and rule 24] 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." 10. It is an admitted position that there is no change in the constitution of the firm and the shares of the partners are the same, on the basis of which the registration was granted, which shows that the firm and its constitution are genuine. But for renewal of registration in the year under appeal the assessee has also to satisfy the condition of section 184(7)(ii), stated above. 11. No doubt the condition laid down under this section is not satisfied as it is an admitted position that Form No. 12 though filed along with the return of income, was belated. When this is so, then it is nothing else than that the declaration furnished by the firm in pursuance of sub-section (7) of section 184 is not in order and this defect can be removed, before the completion of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... X of the Act. 14. Because, the AAC has confirmed the order of the ITO, holding that no appeal lies against the order of the ITO for non-granting the renewal of registration of the firm, being an order under section 184(7) and, therefore, we hold that his order is also illegal, as the same is appealable as stated above. 15. Further, the case of the Hon'ble Madras High Court in the case of A.S.S.S.S. Chandrasekaran Bros. is not applicable to the facts of this case, in view of the fact that their Lordships of the Madras High Court did not decide the case of renewal of registration of the firm ; rather that of registration, there they found that if the application for registration is not within time and the ITO did not condone the late filing of such application, then no appeal against his order lies, which purpose is per specific provisions of section 184(1) to (4) reproduced as under : "Application for registration.--(1) An application for registration of a firm for the purposes of this Act may be made to the Income-tax Officer on behalf of any firm if-- (i) the partnership is evidenced by an instrument ; and (ii) the individual shares of the partners are specified in tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y down the specific procedure to be followed by the ITO to pass the order in the case where the declaration in Form No. 12 is not in order and, therefore, such order is under section 185(3) vide which the ITO refused to renew the registration on the ground that the assessee failed to satisfy him that the assessee was prevented under the sufficient cause or reason to file the declaration as required under the provisions of section 184(7) and that too, before the completion of the assessment. 17. Therefore, in view of our above discussion, we hold that the authorities below have erred in law and facts in arriving at their respective conclusions and, hence, we set aside their order ; holding further that non-granting of renewal of registration by the ITO is an appealable order and such order is an order under section 185(3) and not under section 184(7). 18. Moreover, if such an order is made by the ITO contrary to the provisions of section 185(3) then the same is illegal and cannot stand in the eyes of law even if the same is confirmed by the first appellate authority on the ground that such order is not appealable. 19. Similarly we hold that the AAC is also not justified in hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng heard to the assessee, resulting in determination of the amount of tax greater than claimed or payable by the assessee under the provisions of the Act, as in such situation his order is an order which is the subject-matter of section 246(c). 21. As it is manifest that the amount of tax determined under section 143(1) in the status of non-registered firm is greater than the amount of tax to be paid by the assessee as per his return under section 143(1) in the status of a registered firm and, therefore, the order of the ITO is prejudicial to the interest of the assessee, which too is passed by him without providing reasonable opportunity of being heard to the assessee then the order of the ITO is in violation of section 143(1) ; hence, the assessee is aggrieved and the remedy to redress the grievance is an appeal under section 246(c), as there is no other remedy to the assessee under the Act. 22. Apart from it in such situation the order cannot be said to be an order under section 143(1) ; rather it is an order under section 144, hence, it is to be treated like that for the purpose of appeal. Since, the appellate authority is within its powers to decide the issue that whether ..... 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