SURAJMALLS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE question that has been referred to this Court by the Tribunal is :

(2.) THE assessee is a partnership firm dealing in jewellery and diamonds. The previous year relating to the asst. year 1952 -53 ended with 30th Oct., 1951. On 1st Aug., 1952, a notice was served on the assessee under S. 22(2) and S. 38 of the Act to submit a return of income. Notwithstanding the grant of further time, no return was submitted. A further notice under S. 22(4) directed the assessee to produce his books of account on 17th Aug., 1953. On this date, a return of income was filed in which the income was provisionally shown as Rs. 75,000. With regard to the submission of accounts, the assessee claimed that the accounts were still incomplete and that it would take another two months for the books to be completed and the return to be filed. Thereupon, the ITO proceeded to finalise the assessment under S. 23(4) of the Act.

(3.) THE ITO, in dealing with the application for the renewal of registration for the asst. year 1952 -53 took the view that the books of account had not been closed and the profits or loss of the firm for the previous year relating to the assessment had not been determined. He also thought that is order that there should be a valid application for renewal or registration, the profits or loss, if any, of the previous year should have been ascertained and divided or credited and specified in that manner in the declaration accompanying the application. Since that had not been done, to took the view that the declaration given by the firm in their application dt. 20th Feb., 1953, was false. He accordingly declined to grant renewal. The AAC agreed with the ITO and rejected the appeal that was filed before him. A further appeal to the Tribunal also failed. It may, however, be noted that the Tribunal Proceeded to dismiss the appeal on the ground, that the application was an incomplete one, for the reason that it failed to comply with the requirements of the rules, and the assessee firm had failed to furnish all the particulars required to be filled in, which justifiably led the ITO to conclude that the continued existence of the firm was not established and that the certificate attached to the application was not correct. The Tribunal held that in view of a change in the rules, which came into effect on 20th Nov., 1952, the firm should have submitted its application before a specified date, that is, 30th June, 1952, failing that, the firm should have submitted the application at least before 20th Nov., 1952, when the changed rule came into operation. The Tribunal accordingly held that the application was barred by time.