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TMI Blog1979 (5) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... ssistant Commissioner against the order of the Income-tax Officer refusing to renew registration under section 184(7) of the Income- tax Act, 1961 ? " Briefly, the facts which have given rise to these references are as follows : The ITO, Jullundur, vide order dated March 4, 1972, refused registration to M/s. Mothooram Premchand, Phagwara (hereinafter to be referred to as the " assessee-firm ") for the assessment year 1967-68. On the basis of the order, he rejected the application of the assessee-firm for continuation of registration under s. 184(7) of the Act, for the assessment year 1968-69. He also made an assessment of the firm as an unregistered firm. Two appeals were filed against the orders of the ITO before the AAC. The appeal against the order under s. 184(7) was dismissed by him on the ground that it was not maintainable. He also dismissed the other on the ground that there was no merit in it. The assessee-firm filed two appeals against the orders of the AAC before the Income-tax Tribunal, namely, I.T.A. No. 751/72-73, praying that the authorities below should have taken the status of the assessee-firm as registered firm, and I.T.A. No. 754/72-73 praying that the AAC e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal under the statute, he has no right to file one. He further contends that s. 246 relates to appealable orders wherein no appeal has been provided against an order under s. 184(7). Consequently, according to him, in this case the assessee-firm had no right to file an appeal. In support of his contention he places reliance on Ashwani Kumar Maksudan Lal v. Addl. CIT [1972] 83 ITR 854 (All) and Sandersons Morgans v. ITO [1973] 87 ITR 270 (Cal). We have given a deep thought to the argument of the learned counsel. In order to determine the question it will be relevant to refer to ss. 184, 185 and 186 of the 1961 Act and rr. 22 to 25 of the I.T. Rules, 1962. Section 184 relates to application for registration, s. 185 to procedure on receipt of applications and s. 186 to cancellation of registration. Section 184(7) provides that the registration once granted to a firm for any assessment year shall have effect for every subsequent assessment year. The assessee is, however, required to inform the department that no change in the constitution of the firm or the shares of the partners had taken place and to furnish a declaration in the prescribed manner. Section 184(8) provides that if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnished by the firm, for the relevant subsequent assessment year ........" Rule 22 of the 1962 Rules relates to application for registration of a firm, r. 23 to intimation regarding subsequent changes in constitution, etc., r. 24 to declaration for continuation of registration and r. 25 to certificate of registration. Rule 24 provides that the declaration to be furnished under sub-s. (7) of s. 184 shall be in Form No. 12 and shall be verified and signed by the persons concerned in accordance with sub-r. (5) of r. 22. In Form No. 12, there is a column in which the assessee has to state that the firm was granted registration. Section 184(1) and (2) makes a provision for filing the application for registration. These are to be dealt with under s. 185. In case the ITO is satisfied that during the previous year there was a genuine firm in existence, he shall pass an order for registering it. If the firm is registered for an assessment year, it is not necessary to make an application for its registration for the subsequent assessment years. The assessee thereafter can file declarations under s. 184(7) ; on the basis of the declaration, the ITO is required to record a certificate on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for registration within a reasonable time, say, one month, provided the declaration for the continuation of registration for that year was filed in time. The application for registration so filed should be decided on its merits. " It is a settled proposition of law that the circulars issued by the CBR would be binding on officers and persons employed in the execution of the I.T. Act. (See observations of the Supreme Court in Navnit Lal C. Javeri v. K. K. Sen, AAC [1965] 56 ITR 198). In view of the above instructions, the procedure adopted by the petitioner in filing the declaration under s. 184(7) is legal and valid and it cannot be said by the department that the assessee should have filed an application for registration along with the declaration so that if the registration had been denied to it in the assessment year for which the registration was sought, the application for registration could be decided by the ITO. After noticing the abovesaid provisions of the 1961 Act, a Division Bench of the Delhi High Court in Sant Lal Kashmiri Lal v. CIT [1972] 86 ITR 76, came to the conclusion that the order on the declaration filed under s. 184(7) will be treated to be an order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cancellation in that case was not under sub-s. (4) of s. 23. Subba Rao J. (as he then was), after noticing various sections and the rules, observed that the order cancelling registration is nothing more than refusing to renew the certificate of registration. The learned judge further observed that if that be the construction of an order made cancelling the certificate renewed, such an order directly attracts the appellate jurisdiction conferred on the AAC under s. 30 of the Act. Though some changes have been made in the 1961 Act, the above ratio still holds good in spite of the changes. It may be highlighted that under s.184(7) an assessee is required to file a declaration. There is no provision for the making of an order by the ITO under the said sub-section. The procedure on receipt of the application is provided in s. 185. From the scheme of the Act it appears that the refusal to accept the registration of the firm for the subsequent year will tantamount to refusing to register the firm under s. 185(1). In principle there is no difference between fresh registration of the firm and continuation of its registration. Section 246(j) provides an appeal against an order cancelling t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal was right in holding that an appeal was maintainable before the AAC against the order of the ITO refusing to renew registration under s. 184(7) of the 1961 Act. Question No. 2 is decided accordingly. Now, we advert to question No. 1. While deciding the appeal, the Tribunal observed that they would have normally remanded the case to the AAC for re-deciding the same on merits but since they had already directed the ITO in ITA No. 751/72-73 to take the status of the assessee as a registered firm, it was not necessary to refer the case back to the AAC. The provisions of s. 184(7) have already been reproduced above. According to the said sub-section, the registration shall have effect for a subsequent assessment year if the firm furnishes within a specified period a declaration to the effect that there was 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. Rule 24 prescribes the declaration. It says that it shall be in Form No. 12. In the said form certain blanks are to be filled in by the assessee and it is to be signed by all the partners. These are th ..... 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