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TMI Blog1960 (8) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... on of accounts, the assessee claimed that the accounts were still incomplete and that it would take another two months for the books to be completed and the return to be filed. Thereupon, the Income-tax Officer proceeded to finalise the assessment under section 23(4) of the Act. It would appear that on February 20, 1953, the assessee had submitted an application under section 26A for the renewal of the registration of the firm for the assessment year in question. It may be mentioned that the registration of the firm for the previous assessment year, that is, 1951-52, was granted only on June 11, 1953. We have been informed that for the year of assessment 1953-54, renewal of registration has been granted. But for the reasons which would be set out presently, renewal of registration for the assessment year 1952-53 was refused, and it is only with the grounds of such refusal that we are concerned in this reference. The Income-tax Officer, in dealing with the application for the renewal of registration for the assessment year 1952-53 took the view that the books of account had not been closed and the profits or loss of the firm for the previous year relating to the assessment had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on March 31, 1953, be made before February 28, 1953 . The other sub-clauses of this rule do not require to be referred to. Sub-clause (c) of rule 2 stated: Where the application is for renewal of registration under rule 6 for any year, before the 30th day of June of that year. Rule 6 as amended provided: The application should be made before the 30th day of June of the year for which assessment is to be made, provided that the Income-tax Officer may entertain an application made after the expiry of the said date, if he is satisfied that the firm was prevented by sufficient cause from making the application before that date. It is clear from this amended rule that in so far as the assessment year 1952-53 is concerned, the application for renewal had to be made before the 30th day of June of that year, that is to say, before the 30th day of June, 1952. Obviously this requirement was incapable of being fulfilled when the rule itself was altered only on November 20, 1952. It is stated by Mr. Viswanatha Aiyar, learned counsel for the assessee, that the income-tax authorities clarified the position and said that even applications for renewal could be made before February 28, 1953. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d applied for registration for the assessment year 1951-52, and that the matter was still pending finalisation could not have escaped his notice. In these circumstances the failure to complete paragraph 2 of the form did not justify the conclusion, that the form was incorrect or incomplete. The more substantial question that has been argued is, whether the application was so defective as to render it invalid by reason of the failure to comply with the requirements of paragraph 3. In fact, the Income-tax Officer took the view, that the relevant declaration was false, a view that was concurred in by the Appellate Assistant Commissioner. Paragraph 3 of the form relating to initial application for registration before the amendment of the rule ran thus: We do hereby further certify that the profits (or loss, if any) of the previous year were period up to the date of dissolution were/will be divided or credited as shown below............. The corresponding part of the form relating to the renewal of registration was precisely similar. The view taken by the department and the Appellate Tribunal was that the clear and specific requirement in this connection demanded that profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference to paragraph 3, of the form which relates to the certificate of division of the profits or loss, the amendment was carried out only in Form I which relates to the application for initial registration. While previously the alternative of were/will be was not available in the case of initial registration of the firm, this form was amended to confer the benefit of that alternative for initial registration both in the case of continuing firms and in the case of dissolved firms. In sharp contrast with it, paragraph 3 of the form relevant to a renewal application was not amended to extend the alternative will be to the case of a continuing firm. This should, therefore, make it clear that in so far as the renewal of registration was concerned, the applicant was required to divide the profits or losses of the firm during the previous year relevant to the assessment year, before he could make a valid application for such renewal. It is conceded that that was not done in this case, and it should, therefore, follow that there was not a strict compliance with the rules. We may observe in this connection that registration of a firm under section 26-A of the Act confers a statutor ..... 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