COMMISSIONER OF INCOME TAX Vs. INDIA SEA FOODS

JUDGEMENT

(1.) At the instance of the Revenue, and as directed by this Court in O.P. No. 4377 of 1987-S, the Income Tax Appellate Tribunal has referred the following two questions of law, for the decision of this Court:

(2.) The respondent/assessee, a firm of ten partners, was granted registration for the assessment year 1978-79. We are concerned, in this reference, with the assessment year 1979-80, for which the accounting period ended on 31-12-1978. For the assessment year 1979-80, the assessee filed an application seeking continuation of registration. It turned out that two of its partners, who held 8% share each, did not sign in Form No. 12 of the Income Tax Rules. The mother of the above two persons affixed her signature in Form No.12, as per the power of attorney enclosed to the application. The Income Tax Officer held that the declaration in Form No. 12 filed before him was not in order and continuation of registration was declined. The order of assessment is dated 23-9-1982. In the appeal, the Commissioner of Income Tax (Appeals) held that if there was a defect in Form No. 12 filed by their assessee, the Income Tax Officer should have granted an opportunity to rectify the defect. He directed the assessing authority to grant continuation of registration to the assessee firm. The Revenue appealed before the Income Tax Appellate Tribunal. By order dated 19-12-1985, the Income Tax Appellate Tribunal held that the absence of signature by two of the partners in Form No. 12 is a technical defect and the Income Tax Officer ought to have granted lime to the assessee firm for rectifying the defect instead of rejecting outright the application in toto, and refusing registration. It was further held that the absence of signature by two of the partners in Form No. 12 declaration filed before the officer seeking continuation of registration is only a technical defect. The Income Tax Appellate Tribunal directed the Income Tax Officer to return Form No. 12 so filed to the assessee firm with a direction to re-submit the same after rectifying the defect within the lime given by the Income Tax Officer and then to dispose of the question of granting continuation of registration to the assessee firm after the expiry of the time given by him for complying with the defect in Form No. 12. In this view, the matter was remitted to the Income Tax Officer. It is thereafter at the instance of the Revenue and as directed by this Court in O.P. No. 4377 of 1987-S, the two questions of law formulated herein above have been referred by the Income Tax Appellate Tribunal for the decision of this Court.

(3.) We heard counsel for the Revenue, Mr. P. K. R. Menon as also counsel for the respondent/assessee Mr. S. Vijayan Nair. Counsel for the Revenue submitted before us that the absence of signature in Form No. 12 declaration filed cannot be considered to be a technical defect, that it was a case where there was no proper or valid declaration in Form No. 12 before the Income Tax Officer, that Form No. 12 declaration without the signature of two of the partners will render the entire declaration as nonest in law, and at any rate, even if the Appellate Tribunal took the view that an opportunity should be given to the firm, the entire matter should have been remitted to the Income Tax Officer without expressing any opinion as to whether the absence of signature, by two of the partners, in Form No. 12 declaration is only a technical defect, and so considered, the Tribunal was in error in directing the Income Tax Officer to return Form No. 12 declaration filed by the assessee firm with a direction to re-submit the same after rectifying the defect within the time given by the Income Tax Officer. It was submitted that the Appellate Tribunal was incompetent in law in giving a direction to the Income Tax Officer to return Form No. 12 declaration filed by the assessee firm with a direction to re-submit the same after rectifying the defect within the time given by the Income Tax Officer. Counsel for the Revenue brought to our notice the decisions in Rao Bahadur Ravulu Subba Rao v. Commissioner of Income Tax [(1956) 30 ITR 163 - S.C.]; C./.T. v. Jagannath Pyarelal [(1985) 156 I.T.R. 220 - S.C.]; Rampatmal Tirkha Ram v. C.I.T. [(1967) 65 I.T.R. 596 -Raj]; Subba Rao v. C.I. T. [(1970) 77 I.T.R. 241 - Mysore] and C.I.T. v. Delhi Colonizers [(1985) 154 I.T.R. 50 -Delhi].