AYODHYA PRASAD PARMESHWARIDAS Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Jabalpur Bench, Jabalpur, has referred the following four questions to this court for its opinion under Section 256 (1) of the Income-tax Act, 1961 (hereinafter referred to as the Act):

(2.) THE facts in brief necessary for answering the aforesaid questions are that the assessee was a registered firm since the assessment year 1951-52. There were changes in its constitution several times thereafter. One such change took place on November 9, 1972, when a partnership deed was executed according to which there were six partners in the firm, one of whom being Gopiram. The relevant assessment year for purposes of this case is 1975-76, the previous year of which ended on November 13, 1974. Gopiram died on October 2, 1974. It was mentioned specifically in the partnership deed dated November 9, 1972, that in the case of the death of any of the partners, the firm shall not be dissolved but shall continue with the remaining partners and with such of the legal representatives of the deceased partner as was desired by the remaining partners.

(3.) CONSEQUENT on the death of Gopiram on October 2, 1974, a new partnership deed was executed on November 6, 1974. The erstwhile five partners continued with the same shares, while Ramkumar was taken in as a partner in place of the deceased, Gopiram. The assessee filed a return for the assessment year 1975-76 in respect of the entire previous year on August 20, 1975. Earlier, on July 26, 1975, it had made a declaration under Section 184 (7) of the Act in Form No. 12 as prescribed under the Rules. Subsequently, however, the assessee filed two separate returns on January 31, 1978, one of which was for the period ending October 2, 1974, when Gopiram died, and the other for the period from October 3, 1974, to the end of the previous year, namely, November 13, 1974. Along with these returns filed on January 31, 1978, the assessee also made an application in Form No. 11a for registration of the firm. Since the application in this behalf had become barred by time by then, an application for condonation of delay was also filed. On the facts of the instant case, it was held that the assessee was not entitled to continuation of registration under Section 184 (7) of the Act and, consequently, it was incumbent on it to have applied for registration of the firm. As regards the application for condonation of delay in making the application for registration, it may be pointed out that the case of the assessee was that the requisite application had been handed over by one of the partners of the assessee-firm to the counsel of the firm, but the said application was misplaced and it was on account of this that the delay occurred in making the said application. So far as this explanation is concerned, it has been held that in view of the various discrepancies in the statements of the concerned partner of the firm and of the counsel of the firm, the explanation submitted by the assessee was not worthy of belief. Indeed, the finding of the Tribunal is that the said explanation was not true and correct and consequently could not be accepted as sufficient cause for condonation of delay.