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TMI Blog1982 (7) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... y annexure C order took the view that there was no delay in filing the declaration in Form No. 12 and directed the ITO to allow continuation of registration for the appellant-firm. The Revenue preferred a second appeal before the Appellate Tribunal contending that annexure A order of the ITO is not an appealable order. The Income-tax Appellate Tribunal by annexure A order held that the said order is appealable. Holding so, the Tribunal dismissed the Departmental appeal. The Revenue sought for a reference of the matter to this court under s. 256(1) of the I.T. Act, 1961. Accordingly, the Income-tax Appellate Tribunal, Cochin Bench, has referred the following question to this court : " Whether the appeal to the Appellate Assistant Commissioner against the order of the Income-tax Officer dated September 5, 1975, declining to grant continuation of registration to the assessee for the assessment year 1974-75 was competent? " The relevant provisions governing the case on hand are ss. 184(7), 185(3), 185(4) and 246(j). We may read these sections: " 184. Application for registration....(7) Where registration is granted to any firm for any assessment year, it shall have effect for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s specified in clauses (i) and (ii) of the proviso thereto are obtained. Condition No. (ii) is that the assessee should furnish before the prescribed period a declaration to the effect that 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. Condition No. (ii) enables the ITO to allow the assessee to furnish the declaration even after the prescribed time, but before the assessment is made, if he is satisfied that the firm was prevented by sufficient cause from furnishing the declaration within the time prescribed. In the instant case, no declaration was furnished within time. It is on that account and for that reason, the ITO said that continuation of registration is not granted to the assessee for the assessment year 1974-75. Is this an order contemplated by sub-s. (3) of s. 185 is the question that falls to be decided. Sub-s. (7) of s. 184 does not in fact provide for the passing of any order by the ITO. That section says that registration to the firm once granted shall have effect for every subsequent assessment year provided the conditions mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm No. 12. In short, the submission is that " the defect" mentioned in sub-s. (3) of s. 185 is a defect that can be rectified by the assessee and is not such a defect which could be rectified depending upon the satisfaction or otherwise of the ITO on the question as to whether the firm was prevented by sufficient cause from furnishing the declaration within the time allowed. The learned counsel for the Revenue argues that where the exercise of the ITO's discretion to allow the assessee or not to allow the assessee to furnish the declaration is called for, the same would not be a defect which the ITO should intimate to the assessee giving him an opportunity to rectify the same and on default of which, the ITO could pass the order contemplated by sub-s. (3) to s. 185 declaring that the registration granted to the firm shall not have effect for the relevant assessment year. It appears to us that there is force in the argument advanced on behalf of the Revenue as aforesaid. " The defect " mentioned in sub-s. (3) of s. 185 is a defect that can be rectified by the assessee without invoking the discretionary jurisdiction of the ITO. So viewed, it cannot be said that the delay in furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Discussing the question as to whether the ITO's order rejecting the assessee's application for registration as time-barred is an appealable order, that court said that the defects contemplated under sub-ss. (2) and (3) of s. 185 relate to formal defects when the application is filed in time and do not relate to the application being out of time. We are in full agreement with the view expressed by the Madras High Court as aforesaid. The Allahabad High Court in Ashwani Kumar Maksudan Lal v. Addl. CIT [1972] 83 ITR 854, has held that there is no right of appeal from the refusal of the ITO to record a certificate on the declaration filed by an assessee under s. 184(7) of the Act for the continuance of the registration of the firm though the matter may be taken to the Commissioner by way of a revision petition. In New Orissa Traders v. CIT [1977] 107 ITR 553, the Orissa High Court also has taken the same view with reference to the rejection of an application for registration by the ITO. The assessee's learned counsel relied on the decision of the Gujarat High Court in CIT v. Dineshchandra Industries [1975] 100 ITR 660, of the Andhra Pradesh High Court in Addl. CIT v. Chekka Ayyanna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registration, it should have been presented before the end of the previous year for the assessment year in respect of which registration was sought. If there was any delay in filing the application and the delay is explained to the satisfaction of the Income-tax Officer, he could entertain the application even after the end of the previous year. Only after the application is entertained as being in time and requires to be considered on merits, it can be dealt with under section 185. Section 185 deals with disposal of an application on entertainment of the same on merits while section 184(4) has no concern with the merits of the application for registration. If the application was not in time and the delay in filing the same has not been excused by the Income-tax Officer, there is no application in the eye of law to be dealt with under section 185. " The same is the position where the declaration submitted under s.184(7) is belated and the ITO is not satisfied that the firm was prevented by sufficient cause from furnishing the declaration within the time allowed. Therefore, he does not allow the firm to furnish the declaration at all. In such a case sub-s. (7) of s. 184 would not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ables the ITO to entertain an application made after the end of the previous year on his being satisfied that the firm was prevented by sufficient cause from making an application before the end of the previous year. The word " entertain " means to admit for consideration. So viewed, it cannot be said that where an application for condoning the delay is dismissed, the main application under s. 184(4) has been " entertained " by the ITO. Now, it is necessary to advert to the decisions of this court in CIT v. Tirur Medical Hall [1980] 126 ITR 395, CIT v. Kepeecee Trading Co. [1981] 129 ITR 124 and CIT v.Damodaran Nair[1981] 130 ITR 682. These decisions take the view that the concerned order passed by the ITO proceeded on the basis that they were purported to have been passed by the concerned ITO only under s. 185(1)(b) and that, therefore, an appeal from such an order lay to the AAC. This court in these decisions proceeded on the basis of the " well-established principle that where a court or Tribunal acts under an appealable provision of law and passes an order, a party is not deprived of the right of appeal, though, on facts, that order should not have been passed under that prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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