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TMI Blog1973 (11) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... the case. There was a change in the constitution of the firm with effect from August 22, 1945. We are told that Amarsinh was dead by that time and his brother, Manji, was out from the partnership. In their places came the widow of Amarsinh--Virbai--having 5 annas share and the two sons of Amarsinh--Ramniklal and Nanalal--each having 5 annas share, the remaining partner Keshavji Shivji retaining his one anna share. A copy of the partnership deed dated December 6, 1945, giving effect to the change in the constitution of the firm in 1945 is annexure "B" to the statement of the case. The firm applied for registration under section 26A of the Indian Income-tax Act, 1922 (hereinafter called "the 1922 Act"). Registration was allowed. Renewal was allowed up to the assessment year 1961-62. In this case we are concerned with the assessment year 1962-63 which is governed and covered by the 1961 Act. The corresponding previous accounting year of the assessee was November 1, 1960, to November 8, 1961. The firm as constituted in the year 1945 continued up to the last day of the previous year relating to the assessment year 1962-63. But on the commencement of the next accounting year, i.e., on an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-section (7) of section 184 of the 1961 Act; that having not been done, registration was rightly refused. On being asked to state a case to this court under section 256(1) of the 1961 Act, the Tribunal, by its order dated October 9, 1968, has stated a case and referred the question of law afore mentioned for determination by this court. The answer to the question of law referred involves some difficult points for determination, and, I think, they have got to be resolved before a final answer is given to the question posed. An application had to be made under section 26A of the 1922 Act to the Income-tax Officer on behalf of any firm constituted under an instrument of partnership specifying the individual shares of the partners. Such an application under sub-section (2) had to be made by such person or persons, at such times, containing such particulars and in such form as may be prescribed. The Central Board had power to make rules under section 59 of the 1922 Act. In exercise of that power, rules were made. Rule 2(a)(i) required the filing of an application for registration within a period of six months of the constitution of the firm or before the end of the previous year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the firm then in accordance with rule 22(4)(ii) an application for the first registration under the 1961 Act has got to be filed in Form 11A. The scheme of renewal under the 1961 Act is different. Under the 1922 Act, it is well-settled, the application far renewal of registration meant application for registration every year and had the effect of registering the firm every year. But the scheme of sub-section (7) of section 184 of the 1961 Act is different. Sub-section (7) of section 184 provides: "Where registration is 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, along with its return of income for the assessment year concerned, a declaration to that effect, in the prescribed form and verified in the prescribed manner." Under the scheme of the 1961 Act, when once registration is granted--which must mean granted under this Act--to any firm for any assessment year, it (registratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section (1) of section 184 of the 1961 Act reads as follows: "An application for registration of a firm for the purposes of this Act may be made to the Income-tax Officer on behalf of any firm if-- (i) the partnership is evidenced by an instrument; and (ii) the individual shares of the partners are specified in that instrument." Sub-section (4) of section 185 provides: "Where a firm is registered for any assessment year, the Income-tax Officer shall record a certificate on the instrument of partnership or on the certified copy submitted in lieu of the original instrument, as the case may be, to the effect that the firm has been registered under this Act, for that assessment year; and where a declaration under sub-section (7) of section 184 is furnished by the firm, for the relevant subsequent assessment year." Reading the provisions aforesaid in the background of the provisions contained in section 184(7), it is clear that a registration granted under the 1922 Act cannot have the effect of continuing the registration for the assessment year 1962-63 to which the 1961 Act became applicable. For that year an application for registration of the firm for the purposes o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, instructions and directions of the Central Board of Revenue:........" It is to be noticed that the word "issued" in clause (k) of sub-section (2) of section 297 of the 1961 Act governs not only the word "order" but also the words "directions, instructions, notifications and rules"; three of these words are of sub-section (8) of section 5 of the 1922 Act. The expression of "order issued" cannot be equated with an order made granting renewal of registration under section 26A of the 1922 Act. To my mind, therefore, an application for registration of the firm, as if it was a first registration under the 1961 Act, for the first year of assessment 1962-63 was necessary. It was not a case which was covered by sub-section (7). That being so, the assessee was right, on the facts of this case, in filing the application in Form 11A. This application, obviously, could not be and had not been filed under the 1961 Act before the close of the previous year which closed on November 8, 1961. The application was filed, as already stated, in September, 1962. On that date the constitution of the firm had changed. The application for registration under the 1961 Act was for registration of the fir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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