9911796707
TMI Blog1969 (10) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax Appellate Tribunal at the instance of the revenue. We may at the outset state a few facts even before we extract the question. The assessee is a firm of lawyers, Joseph & George, and the partners have been carrying on their profession as an unregistered firm. On 10th April, 1964, they drew up a document of partnership embodying the terms and constitution of the firm, and, on the same day, they applied for registration of the firm for the assessment year 1964-65, the accounting year being from 1st April, 1963, to 31st March, 1964. Since the application for registration was not filed before the close of the previous year, an application for condoning delay was filed, the reason for the delay being that the senior partner of the fir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Supreme Court in N. T. Patel & Co. v. Commissioner of Income-tax, where also the Supreme Court affirmed their earlier decision in Mitter's case . The counsel contends that in Mitter's case the Supreme Court laid down in clear terms that the partnership document should be in force or operative during the accounting year, and that that position has not been changed by the amendment of the law by the Income-tax Act of 1961. On the other hand, Mr. Varghese Kalliath argues on behalf of the assessee that the decision in Mitter's case was under the Income-tax Act of 1922, the relevant provisions of which have been substantially modified by the Act of 1961, so that that decision is no more good law and not applicable to registration of fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t spoke for the court and the other represented by R. C. Mitter & Sons v. Commissioner of Income-tax, decided by the Calcutta High Court, where Chakravartti C.J. delivered the opinion of the court. (The case before the Supreme Court was an appeal against the decision of the Calcutta High Court.) In the Bombay case, Chagla C.J. took the view that a partnership constituted under a document need not necessarily have its origin in the document itself, while Chakravartti C.J. took a different view in the Calcutta case. Considering these two lines of cases, the Supreme Court came to the conclusion that the expression " under the document " was different from the expression " by the document" and that the former meant that the partnership need not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the accounting year. We are not here concerned with the further question whether the document should be in existence at the very inception of the accounting year, or before the year is out." From the first sentence extracted above it is clear that the aforesaid conclusion was reached by the Supreme Court on the interpretation of the relevant rules, and not on the language of section 26A. In this decision itself, Hidayatullah J. (as he then was) wrote a separate but concurring judgment which may also be relevant in this connection. The learned judge said : " I entertain, however, some doubt as to whether the instrument sought to be registered should be in existence in the accounting year, before registration can be claimed. There is noth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vides that the application shall be accompanied by the original instrument evidencing the partnership. The proviso to sub-section (4) provides that the Income-tax Officer may entertain an application made after the end of the previous year, if he is satisfied that the firm was prevented by sufficient cause from making the application before the end of the previous year. Thus, sub-section (4) of section 184 now embodies the relevant provisions of rules 2 and 3 framed under the old Act ; and these provisions are still intact with equal force, if not more force as they are now in the Act itself. Therefore, the observation of the Supreme Court first extracted hereinbefore is still good ; and we may add that the change in the language of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade after the end of the previous year and to excuse the delay in presenting that application. His jurisdiction does not extend beyond this : and if the contention of the assessee-firm in this case is accepted, the result will be that the delay in drawing up or executing the partnership document can also be excused by the Income-tax Officer, which, in our opinion, the law does not contemplate. The error committed by the Appellate Assistant Commissioner and the Appellate Tribunal in this case lies in not properly appreciating the power of the Income-tax Officer to excuse delay. We reiterate that the power is only to excuse the delay in filing the application for registration and not to excuse the delay in drawing up the document of partnersh ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
