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TMI Blog1976 (7) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to this court for opinion is : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee-firm was entitled to the benefit of continuance of registration under section 184(7) of the Income-tax Act, 1961 ? " The assessee is a firm of partners carrying on business at Chikmagalur in petrol and petroleum products, fertilisers, etc., under the name and style of " M/s. S. V. Ratnaswamy & Sons ". The said firm has been constituted by a deed of partnership dated January 1, 1966. During the relevant accounting year, there were six partners. After the end of the relevant previous year and on July 1, 1969, a fresh partnership deed is stated to have been drawn up amongst the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said Parvathamma, the mother of the said S. R. Ramachandra, were erroneous and prejudicial to the interests of the revenue, within the meaning of section 263 of the Act. Accordingly, after affording to the assessee an opportunity of being heard in the matter, the Additional Commissioner of Income-tax, in exercise of his revisional power under section 263 of the Act, held that the declaration in Form No. 12 was not valid and consequently the assessment of the firm in the status of a " registered firm " was erroneous and prejudiced the interests of the revenue. In that view of the matter, by order dated October 28, 1971, he set aside the assessment order passed by the Income-tax Officer for the assessment year 1970-71 and directed the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of securing continuance of registration, were those referred to in sub-rule (5) of rule 22 which, according to the reasoning, identified such " persons concerned " as " all the partners (not being minors) in the firm as constituted at the date of the application ". In the reference before us, Sri S. R. Rajasekhara Murthy, learned counsel for the revenue, contends that view as to the validity of the declaration in Form No. 12 taken by the Tribunal is erroneous. His contention is that for a declaration in Form No. 12 to be valid, it has to be made by the " persons concerned " as contemplated in rule 24 of the Income-tax Rules. Rule 24 of the Income-tax Rules, 1962, reads : " Declaration for continuation of registration.--The declaratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S. R. Rajasekhara Murthy. But, in the circumstances of the present case, this distinction becomes merely an academic one, as, in our opinion, even if the persons liable to make the declaration in Form No. 12 are identified with reference only to the expression " persons concerned " occurring in rule 24 and not with reference to sub-rule (5) of rule 22, there is support, in the scheme of the " Act ", for the view that it is the partners of the " firm " as subsisting and as constituted on the date of making of the declaration that are envisaged in the said expression " persons concerned ". The expression " persons concerned " are necessarily those whose interests would be adversely affected, if there is a " non- continuance " of the registra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r concerned, a declaration to that effect, in the prescribed form and verified in the prescribed manner ........ " What emerges from a reading of the provisions of sub-section (1) of section 187 and of sub-section (7) of section 184 together is that the concept of a " registered firm " as an assessable entity under the Act has, subject to certain conditions, an element of durability as such assessable entity for the subsequent years also and that the furnishment of a declaration contemplated by the second proviso to sub-section (7) of section 184 of the Act is by the " firm " alone, which, in turn, could only mean its partners as constituted at the time of making such declaration. It is these partners who would be adversely affected in co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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