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TMI Blog1998 (6) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... irm in the year under consideration? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that under section 185(3) of the Income-tax Act, 1961, the assessee was not entitled to substitute the declaration as contemplated under section 184(7) of the Income-tax Act, 1961, by an application for registration referred to in section 185(2) of the Act? (iii) Whether, on the facts and in the circumstances of the case, the assessee was entitled to registration under the Income-tax Act, 1961?" In view of the decision of the Supreme Court in the case of Wazid Ali Abid Ali v. CIT [1988] 169 ITR 761, learned counsel for the assessee has restricted his case for the grant of limited reliefs to the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e partners shall not dissolve the partnership firm but the same shall be continued by the remaining partners after adjusting their shares by mutual agreement." For the assessment year 1972-73, the partnership firm was registered under section 185 of the Act. Sixteen days prior to the end of the assessment year under consideration one partner died. The remaining four partners executed a new partnership deed dated June 23, 1972, effective from October 3, 1971, and continued the same business. For the subsequent assessment year, i.e., 1973-74, an application for registration in Form No. 11A of the Act was filed and the partnership firm was registered under section 185 of the Act. As per the new partnership, the ratio of profit and loss among ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non-filing of the registration Form No. 11A for registration was a bona fide mistake; the assessee was an old firm for whom the registration has been given all along; in view of the death of one partner there was change in the constitution of the firm and the said change occurred at the end of the assessment year. It was further held that the firm is genuine and other partners continued the business. On these reasons, the Appellate Assistant Commissioner directed the Income-tax Officer to permit the assessee to submit Form No. 11A to condone the delay and, thereafter, pass an order of registration under section 185 of the Act. Against the order passed by the Appellate Assistant Commissioner, the Revenue filed an appeal before the Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber 3, 1971, i.e., 16 days prior to the end of the assessment year, ending on October 19, 1971. Thus, change in the partnership occurred 16 days prior to the end of the assessment year under consideration. The assessee conceded before the appellate authority that the change in the constitution of the partnership firm had occurred on account of death of one of its partners and instead of applying for registration by filing Form No. 11A, the assessee has filed Form No. 12 for continuation of registration. Learned counsel for the assessee submitted that in view of the decision of the Supreme Court in Wazid Ali's case [1988] 169 ITR 761 the assessee will be entitled to avail benefit of registration during the assessment year 1972-73 up to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are as follows : "In the background of the facts of this case, we are of the opinion that the High Court was right that in such circumstances, the course open was to seek registration to execute a new deed of partnership and to apply for the registration of that deed. But that does not make the registration up to the date of death of the deceased partner invalid and, in our opinion, subject to any express prohibition indicating the same, the firm is entitled to the benefit of registration. We have found no such express prohibition, as the analysis of the various sections indicates. On the other hand, it would be just and equitable that the assessee should have that limited benefit. We are of the opinion that the Tribunal took the correct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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