COMMISSIONER OF INCOME TAX Vs. NEW INDIA RESTAURANT

JUDGEMENT

(1.) THE following question of law has been referred to the High Court under S. 256(1) of the IT Act, 1961, hereinafter referred to as "the Act", by the Tribunal, Gauhati Bench, for decision :

(2.) THE ITO while assessing the assessee for the asst. year 1970 -71 found that the assessee had not filed a declaration under S. 184(7) of the Act in Form No. 12 and so for that assessment year the ITO took the status of the assessee as unregistered firm. The assessee preferred an appeal against the order under S. 246(c) of the Act to the AAC. Before the AAC the assessee contended, inter alia, that it was a partnership firm and during the earlier years the registration had been allowed and the status had been taken as registered firm and that the assessee could not file the declaration in Form No. 12 through ignorance and so a fresh opportunity should have been granted to the assessee before completion of the assessment. The AAC, however, held that as no declaration was filed in the case, the ITO's order was justified. The assessee then preferred an appeal from the order of the AAC before the Tribunal. The Tribunal found that the assessee was assessed as registered firm in the preceding year and also in the subsequent years and that only for the asst. yr. 1970 -71, the assessment had to be completed treating the assessee as unregistered firm since no declaration in Form No. 12 was filed. The Tribunal held that the genuineness of the firm was never in dispute and so the registration had been granted for all the subsequent years and also for the earlier years. 'The Tribunal, therefore, held that it would be unfair to deny registration to the assessee on the technical ground that Form No. 12 was not filed along with the return of income and that the non -filing of Form No. 12 was an unintentional omission and for this purpose it would be harsh to deny registration to the assessee. Accordingly the Tribunal directed the ITO to grant registration to the assessee -firm after giving an opportunity to file the declaration as prescribed under the said Act within one month from the date of receipt of the order.

(3.) PROVIDED that - (i) there is no change in the constitution of the firm or the shares of the partners as evidenced by the instrument of partnership on the basis of which the registration was granted ; and (ii) the firm furnishes, before the expiry of the time allowed under sub -s. (1) or sub -s. (2) of S. 139 (whether fixed originally or on extension) for furnishing the return of income for such subsequent assessment year, a declaration to that effect, in the prescribed form and verified in the prescribed manner, so, however, that where the ITO is satisfied that the firm was prevented by sufficient cause from furnishing the declaration within the time so allowed, he may allow the firm to furnish the declaration at any time before the assessment is made. (8) Where any such change has taken place in the previous year, the firm shall apply for fresh registration for the assessment year concerned in accordance with the provisions of this section."