COMMISSIONER OF INCOME TAX Vs. RAMA TALKIES

JUDGEMENT

(1.) "Sree Rama Talkies", a firm consisting of three partners, (1) T. Aswarthanarayana, (2) Venkaiah Naidu, and (3) Audinarayana, and registered under the Income-tax Act, was carrying on business from 1953. The instrument of partnership was dated April 1, 1953, and it provided that the partnership was to be for a period of twenty years and in the event of the death of any partner the partnership was not to dissolve but was to continue with the heir of the deceased partner taking his place. The registration of the firm was continued year after year by the income-tax department till the assessment year 1964-65. The account ing year which corresponded to the assessment year 1964-65 was October 29, 1962, to November 15, 1963. Aswarthanarayana, one of the partners, died on October 15, 1963, and he was succeeded in the partnership by his widow, Mangamani. On September 26, 1964, the firm, instead of applying for fresh registration as required by Section 184(8) when there was a change in the constitution of the firm, applied in Form No. 12, for continuation of registration under Section 184(7) as if there was no change in the constitution of the firm. The Income-tax Officer thereupon issued a notice to the firm to show cause why registration should not be refused as its declaration in Form No. 12 that there was no change in the constitution of the firm was not true and as no fresh partnership deed had been submitted. The firm sent a reply saying "Form No. 12 filed along with the return of income is quite in order till October 15, 1963". The firm also prayed for a month's time to produce the deed of partnership. This was on March 29, 1964. No deed was, however, produced and the Income-tax Officer finally passed an order on October 12, 1970, refusing registration on the ground that the application was not in proper form as what was submitted was only an application for continuation and not a fresh application for registration and also on the ground that the deed of partnership had not been produced. The order was confirmed by the Appellate Assistant Commissioner. The Income-tax Appellate Tribunal, however, directed the Income-tax Officer to grant continuation of registration up to October 15, 1963. According to the Tribunal the Act did not prohibit the grant of registration for part of, a previous year. At the instance of the Commissioner of Income-tax the following question has been referred to us :

(2.) SECTION 184 deals with application for registration, SECTION 185 with procedure on receipt of application and SECTION 186 with cancellation of registration. SECTION 184(4) states :

(3.) THE question referred to us is answered in favour of the department and against the assessee. THEre will be no order as to costs.