9911796707
TMI Blog1996 (7) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of the Commissioner of Income-tax under section 263 cancelling the order of the Income-tax Officer allowing the registration to continue?" The assessment year is 1980-81, the previous year being the financial year ending on March 31, 1980. The undisputed facts are that the assessee is a partnership firm and had filed in a proper manner Form No. 12 in respect of the assessment year in question 1980-81. It is also undisputed that with regard to the previous assessment year, the assessee was granted registration and with regard to the assessment year in question, what was under consideration was only of continuation of registration. The statute deals with this situation in section 184(7) of the Act. In enacts that where registratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that effect that there is no change up to the last day of the previous year in question. In other words, the requirement expected on the factual matrix is that there has been no change as required by the provisions up to March 31, 1980. The situation presents difficulty because the declaration was signed by the partners much before on September 15, 1979, and even thereafter it was filed also much before on September 22, 1979. This was well during the financial year with regard to the assessment year in question, the previous year having ended on March 31, 1980. The Income-tax Officer completed the assessment under section 143(1) of the Income-tax Act, having allowed registration to enure. The Commissioner of Income-tax exercised powers un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee and as a consequence proceed with the assessment according to the law for the assessment year in question. The decision of the Commissioner of Income-tax, Trivandrum, is confirmed by the Income-tax Appellate Tribunal, Cochin Bench. The Tribunal took the view that the declaration could not be regarded as a valid one. In the process of reasoning, the Tribunal relied on its own decision which in turn placed reliance on the decision of the Gujarat High Court in CIT v. Trinity Traders [1974] 97 ITR 81, to the effect that the declaration required under section 184(7) of the Act requires a statement that there has been no change in the constitution of the firm or in the shares of the partners up to the last day of the previous year r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is the underlying legislative intent of the key words of section 184(7) that the fact of registration has an effect which is carried forward for every subsequent assessment year and if the situation is of no change whatsoever, then by virtue of section 184(7), clause (ii), of the proviso thereto, the concerned Income-tax Officer gets discretion whereby he can allow the firm to place the declaration on record at any time before the assessment is made. Thus, in a situation of no change whatsoever, the filing of the declaration in regard to the process of continuation would have to be understood as a curable situation within the discretionary powers of the Income-tax Officer and in this context dealing with the situation will postulate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s putting their signatures on September 15, 1979, and filing the concerned declaration after a week therefrom on September 22, 1979, would only be a technical lapse when there was a genuine firm in existence. This could have been dealt with by the Income-tax Officer and therefore could not have been considered to be erroneous in such a way as to warrant an order of cancellation of the continuance of the registration as has been done by the authorities below. For the above reasons the question is answered in the negative, in favour of the assessee and against the Revenue. A copy of this judgment under the seal of the court and the signature of the Registrar shall be forwarded to the Income-tax Appellate Tribunal, Cochin Bench. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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