V M AUTOMOBILES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) WE are concerned with the situation whereunder the Commissioner of Income-tax in exercise of powers under Section 263 of the Income-tax Act, 1961, cancelled the order of the Income-tax Officer allowing the registration of the firm to continue. Therefore, the question for our answer is as follows :

(2.) THE assessment year is 1980-81, the previous year being the financial year ending on March 31, 1980. THE undisputed facts are that the assessee is a partnership firm and had filed in a proper manner Form No. 12 in respect of the assessment year in question 1980-81. It is also undisputed that with regard to the previous assessment year, the assessee was granted registration and with regard to the assessment year in question, what was under consideration was only of continuation of registration.

(3.) WHEN there is no change in the constitution of the partnership or in the shares of the partners, the provisions of rule 24 of the Income-tax Rules read with the contents of Form No. 12 necessitates affirmation to that effect that there is no change up to the last day of the previous year in question. In other words, the requirement expected on the factual matrix is that there has been no change as required by the provisions up to March 31, 1980. The situation presents difficulty because the declaration was signed by the partners much before on September 15, 1979, and even thereafter it was filed also much before on September 22, 1979. This was well during the financial year with regard to the assessment year in question, the previous year having ended on March 31, 1980. The Income-tax Officer completed the assessment under Section 143(1) of the Income-tax Act, having allowed registration to enure.