SEWARAM RIDHKARAN Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) In this reference under Section 256(1) of the Income-tax Act, 1961, the following question has been referred to this court:

(2.) The reference arises out of the assessment for the assessment year 1964-65. It appears that the assessee-firm was constituted under a deed of partnership dated August 28, 1962. For the assessment year 1963-64, the very first year when the firm became eligible for registration under the Income-tax Act, 1961, the registration was granted to it. One of the partners died on March 21, 1963, and a new deed of partnership was executed on June 18, 1963, and there was a fresh application for registration of the firm for the assessment year 1964-65. The registration was allowed by the Income-tax Officer by his order dated May 22, 1968. For the next year, that is to say, assessment year 1965-66, the assessee filed a declaration in Form No. 12 along with the return of income on December 29, 1965. This declaration form was signed only by five out of eight major partners. The Income-tax Officer was of the opinion that the conditions as laid down in Section 184(7) of the Act had not been complied with and, therefore, refused the renewal of registration and treated the firm as an Hindu undivided family. The assessee preferred an appeal against this order to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner upheld the view of the Income-tax Officer. The assessee preferred a further appeal before the Tribunal. It is not in dispute that the declaration form filed under Section 184(7) of the Act did not conform to the requirements of the law. It was, however, submitted that the assessee was entitled to a notice to rectify the defect as provided under Section 185(2) of the Act. It was contended that on coming to know that the Income-tax Officer was intending to make an order, the assessee had filed a fresh declaration duly signed by all the partners on May 27, 1968, and hence, in those circumstances, renewal of registration should have been granted.

(3.) On behalf of the revenue it was urged that no notice was contemplated under Section 185(2) of the Act. The Tribunal rejected the assessee's contention. In the premises, the reference has been made to this court on the aforesaid question mentioned hereinbefore.