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TMI Blog1993 (3) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... nd answer the reference, though for different reasons, but in a repeat exercise. The facts leading to the controversy are that in respect of the assessment year 1974-75, the respondent (assessee) filed a declaration for continuation of registration beyond the prescribed time. He submitted it on January 6, 1975, when he should have done it by June 30, 1974. The Income-tax Officer refused to condone the delay and vide order dated January 8, 1976, treated the assessee as an unregistered firm. The assessee went in appeal to the Appellate Assistant Commissioner and challenged before him only one part of the order, i.e., refusal of condonation of delay. The appeal was allowed and the Income-tax Officer was directed to condone the delay and grant registration to the firm. The Revenue felt aggrieved and took an appeal to the Tribunal taking the plea that the Income-tax Officer's order passed under section 184(7) was not appealable before the Appellate Assistant Commissioner. The Tribunal, relying upon Addl. CIT v. Chekka Ayyanna [1977] 106 ITR 313 (AP), rejected the contention holding that as the order refusing condonation of delay amounted to refusal to continue registration, it was thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the procedure to be followed in dealing with such matters. The provisions so far as necessary for our purpose read thus : "184. Application for registration. (7) Where registration is granted or is deemed to have been granted to any firm for any assessment year, it shall have effect for every subsequent assessment year: Provided that: (i) there is no change in the constitution of the firm or the shares of the partners as evidenced by the instrument of partnership on the basis of which the registration was granted ; and (ii) the firm furnishes, before the expiry of the time allowed under sub-section (1) of section 139 for furnishing the return of income for such subsequent assessment year, a declaration to that effect, in the prescribed form and verified in the prescribed manner, so, however, that where the Assessing 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." "185. Procedure on receipt of application.-(1) On receipt of an application for the registration of a firm, the Assessing Officer shall i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y allow the firm to furnish the declaration at any time before the assessment is made. Section 185 prescribes the procedure to be followed by the Incometax Officer on receipt of an application for registration and also the declamation under section 184(7). Sub-section (1) requires of the Incometax Officer to enquire into the genuiness of the firm and its constitution as specified in the instrument of partnership and depending upon his satisfaction, he may order registration of the firm for the assessment year or refuse its registration. Sub-section (2) lays down that if he finds the application not in order, he shall intimate the defect to the firm, give it an opportunity of rectifying it within one month and on its failure reject the application. Sub-section (3) however, deals with a declaration made by the firm in Form No. 12 under section 184(7). It lays down if the Income-tax Officer finds it defective, he shall inform the firm and call upon it to rectify it within one month and on its failure pass an order in writing to declare that registration granted to it would have no effect for the relevant assessment year. Likewise, section 246 provides for appeal to the Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on would show that even when the Income-tax Officer acts under the proviso to section 184(7) the consequence is either grant or refusal of registration, Once he receives a declaration under the proviso, he has two options available. If he finds it in order, he will place it on record and extend the registration. But if he finds it defective, the only course open to him is to intimate the defect to the assessee and provide him an opportunity to rectify it. While doing so, he only follows the provisions of section 185(3) which deals with rectification of defects in the declaration. But should the bar of limitation be construed to be a defect within the meaning of the aforesaid provision is the question and if so, is it liable to be rectified. "Defect" has been defined as "want or absence of something necessary for completeness, perfection or adequacy in form or function. In the Concise Oxford Dictionary, it has been held to mean lack of something essential to completeness ; shortcoming, failing". Keeping this in view, can it be said that delay caused in filing the declaration renders it incomplete and functionless. If it does, it is a defect. But it still remains to be seen how suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitution and in case he feels satisfied, he will pass an order in writing registering the firm or else refuse to register it. Sub-section (2) provides for rectification of a defect in such an application and its rejection if the defect is not cured. These provisions significantly use the word "application" which means application for registration for the first time in contradistinction to the word "declaration" used in section 184(7) or section 185(3) connoting request for continuation of registration already granted and its refusal. Keeping this in mind it becomes clear that where the Income-tax Officer deals with the application for, first registration and refuses registration to the firm, he acts under section 185(1)(b) and where he processes a declaration in Form No. 12 under section 185(7) for continuation of registration and refuses it, he passes an order under section 185(3). In other words, all types of refusal of registration do not necessarily fall under section 185(1)(b) and consequently do not become appealable under section 246(c). It may as well be that the Income-tax Officer's refusal to extend time under proviso (ii) to section 184(7) may consequently amount to ref ..... X X X X Extracts X X X X X X X X Extracts X X X X
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