9911796707
TMI Blog1983 (2) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... he subsequent years upto the asst. yr. 1973-74. (3) As Shri Krishna Kumar attained majority on 10th March, 1973 during the accounting period relevant to the asst. yr. 1974-75, he alongwith other three partners executed a fresh deed of partnership on 1st July, 1972. Thereafter, Form No. 11A alongwith the deed of partnership dt. 1st January, 1972 were filed with the ITO on 19th September, 1973 in respect of the asst. yr. 1974-75. (4) As the partners as well as the Advocate of the assessee-firm noticed typographical error in the deed executed on 1st January, 1972 inasmuch as Shri Krishna Kumar was shown as full fledged partner when in fact, he had attained majority only on 10th March, 1973. The partners therefore executed a "supplementary agreement" on 20th October, 1973, whereby it was stated that the date namely 1st January, 1972 mentioned in the fresh deed of partnership should be substituted by the date 10th March, 1973 on which date Shri Krishna Kumar had attained majority and opted to remain as a partner in the assessee-firm. (5) On 26th June, 1974, the assessee filed its return of income as well as Form No. 12 for continuation of registration. (6) On 4th September, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1A and Form No. 12 in respect of the asst. yr. 1974-75 and since it had also filed a supplementary agreement dt. 20th October, 1973 correcting the date of execution to the fresh deed of partnership on the attainment of majority by Shri Krishna Kumar, the ITO had rightly allowed registration for the asst. yr. 1974-75. Once the registration was validly allowed by the ITO, he was fully justified in granting continuation of registration to it in respect of the years under appeal. It was also stated that since no order was passed granting continuation of registration. No action could be taken u/s. 263(1) of the Act, as proposed by him (the CIT). 7. After considering the submissions made on behalf of the assessee, the CIT passed a consolidated order on 31st January, 1979, the relevant portion of which is reproduced below: 8. On face of record, it is clear that for the assessment years under consideration i.e. 1975-76, 1976-1977 and 1977-78 the ITO allowed continuation of registration without examining the partnership deed dated 1st January, 1972 which mentions the date of attainment of majority as 10th March, 1973. This contradiction was entirely overlooked by the ITO who failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 63 of the Act, the ITO had in fact passed a combined order u/s. 154/185 on 2nd September, 1978 in respect of the asst. yr. 1974-75. Thereafter, the ld. counsel for the assessee invited our attention to s. 184(7) of the Act and submitted that in order to grant continuation of registration, the ITO is required to make limited enquiries as to whether registration was granted to the assessee in respect of the earlier year. In this view of the matter, he submitted that even though the ITO had passed a combined order u/s. 154/185 of the Act on 2nd September, 1978 in respect of the asst. yr. 1974-75, the same could not be considered while granting continuation of registration u/s. 184(7) of the Act. In other words, the ld. counsel for the assessee wanted to impress upon us that the orders passed by the ITO on 7th February, 1977, 5th September, 1977, and 29th October, 1977 were correct and proper orders and, therefore, the CIT was not justified in coming to the conclusion that such orders passed by the ITO were erroneous and prejudicial to the interest of the revenue. In this connection, he also submitted that since each year is a separate and distinct proceedings, the ITO had correctly ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision of the Hon'ble Allahabad High Court in the case of Nityanand Deokinandan as their Lordships' attention was not invited to the decision of the Hon'ble supreme Court in the case of Sir Hukamchand Munnalal Co. vs CIT (1966) 60 ITR 99 (SC), wherein the Hon'ble Supreme court has elaborately discussed the effect of continuation of registration, which would show that even though the ITO is required to make an endorsement on the deed of partnership for granting continuation of registration that would amount to an order, which could be made a subject matter for initiating proceedings u/s. 263 of the Act. In this connection, the ld. representative for the department strongly relied on the decision of the Hon'ble Allahabad High Court in the case of Badri Narain Kashi Prasad v. Addl. CIT (1981) 128 ITR 663 (All) wherein similar action taken by the CIT was affirmed by the Hon'ble High Court. 10. The ld. counsel for the assessee in his reply submitted that since the decision in the case of Nityanand Deokinandan was pronounced subsequent (on 5th November, 1980) to the decision in the case of Badri Narain Kashi Prasad (22nd December, 1978) and since in the decision of Nityanand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1979) 118 ITR 392 (All), a Division Bench of this Court, one of the members of which happened to be a party to the decision in the case of Badri Narain Kashi Prasad vs. Addl. CIT (1981) 128 ITR 663 (All) referred to above, observed thus: "The essence of s. 184(7) is that once registration has been granted to a firm, it is to have effect for every subsequent year, in case there has been no change in the constitution of the firm or in the shares of its partners. The other requirements are merely to evidence this fact. The requirement that the firm shall furnish a declaration in Form No. 12 is merely to prove the facts in a particular way. The requirement that the declaration shall be filed along with the return of income is not of the substance or the essence. It is a procedural requirement. The legislative intent appears to be that while dealing with the assessment of a firm the ITO should have clear-cut evidence that the essential fact that there has been no change in the constitution of the firm or in the shares of the partners has been proved satisfactorily in the required matter. The procedural requirements hence are to be treated as directory. If there is some defect in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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