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TMI Blog1991 (9) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 184 of the Act as Form No. 12 envisaged by rule 24 of the Income-tax Rules, 1962, was being submitted on its behalf. For the assessment year 1984-85 which is the year now in question, the firm filed the usual declaration in Form No. 12 in time and, therefore, the registration already granted to the firm had to continue to have its effect for this assessment year as well. No fresh order of registration was necessary to be passed by the Income-tax Officer in view of the provisions of sub-section (7) of section 184 of the Act as there was no change in the constitution of the firm or in the shares of the partners. During the assessment proceedings for the relevant assessment year, a notice under section 139(2) of the Act was issued callin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of the Income-tax Officer as also the order of the Commissioner in the present writ petition. The only contention advanced on behalf of the firm is that since Form No. 12 had been submitted in time to the Income-tax Officer for the relevant assessment year, he could not while making the best judgment assessment refuse to treat the firm as a registered firm and that in case he was inclined to cancel the registration, he should have followed the procedure prescribed by section 186 of the Act. The respondents have controverted the stand of the writ petitioner and the impugned orders are sought to be justified on the basis of the provisions of sub-section (5) of section 185 of the Act. It is the case of the respondents that since the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of any assessment year, there is, on the part of a firm, any such failure as is mentioned in section 144, the Income-tax Officer may refuse to register the firm for the assessment year." "Section 186. Cancellation of registration.-... (2) If, where a firm has been registered or its registration has effect under sub-section (7) of section 184 for any assessment year, there is, on the part of the firm, any such failure in respect of the assessment year as is mentioned in section 144, the Income-tax Officer may cancel the registration of the firm for the assessment year, after giving the firm not less than fourteen days' notice intimating his intention to cancel its registration and after giving it a reasonable opportunity of being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 185 of the Act do not apply to a case like the present one where the firm already stood registered and was claiming automatic continuation of its registration under section 184(7) of the Act. Section 185(5) of the Act would apply only when the firm is to be registered for the first time and the Income-tax Officer is required to pass a specific order granting registration after satisfying himself that the requirements of section 184 of the Act are complied with. For all subsequent years after its registration, the firm can claim automatic continuation of its registration provided it furnishes Form No. 12 in time. No other formality is required to be gone through and the Income-tax Officer is bound to continue recognising the firm wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5) of the Act and in case continuation of the registration is to be cancelled, the procedure laid down in sub-section (2) of section 186 of the Act will have to be followed. The view that I am taking finds support from a Division Bench judgment of the Allahabad High Court in Addl. CIT v. Radha Kishan Banwarilal [1979] 116 ITR 970. In the instant case, the firm had been registered for the first time in the year 1977-78 and its registration continued thereafter and, for the relevant assessment year, the requisite declaration in Form No. 12 having been submitted by the firm in time, the Income-tax Officer, while making ,the best judgment assessment under section 144 of the Act for that assessment year could not, therefore, cancel the registr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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