COMMISSIONER OF INCOME TAX Vs. DELHI SANITARY STORES

JUDGEMENT

(1.) ON an application, dated April 11, 1969, filed by the assessee, M/s. Delhi Sanitary Stores, Jaipur, the Income-tax Appellate Tribunal referred the following question for answer to this court :

(2.) THE facts giving rise to this reference are that a partnership firm, under the name and style of M/s. Delhi Sanitary Stores, Jaipur, was brought into existence on January 21, 1961, and the partnership deed was executed on April 30, 1961. This partnership comprised of two partners, namely, Rajesh Chand Gupta and Sushil Chand Gupta, having equal shares in the profit and loss of the firm. THE above-named firm was assessed as a registered firm for the assessment year 1962-63. By a dissolution deed, dated January 11, 1963, the above-named firm was dissolved with effect from January 1, 1963. On January 1, 1963, a new firm, consisting of Kailash Chand Gupta, Kishan Chand Gupta, Rajesh Chand Gupta and Sushil Chand Gupta as partners came into being, each having a one-fourth share in the profit and loss. On January 31, 1963, the assessee-firm filed an application in Forms Nos. 11 and 11A for registration. In this application, the names of all the four partners were mentioned, but the assessment year was erroneously mentioned as 1963-64 instead of 1964-65. THE assessing authority issued a notice to the assessee-firm to show cause why the firm be not assessed as an unregistered firm for the year 1964-65. On July 19, 1966, the assessee-firm filed a reply to the notice along with an application for registration in the prescribed form. THE ITO, vide his order dated July 30, 1966, refused registration to the firm on the ground that the application filed by the assessee for registration was belated and no sufficient reason was given for not filing the application in time. THE appeal filed by the assessee came up for decision before the AAC on June 13, 1967, but it met with no success. THE second appeal filed by the assessee before the Income-tax Appellate Tribunal, Delhi Bench-C, came up for decision on January 31, 1969. THE Tribunal held that there was nothing on record to doubt or challenge the genuineness of the firm and directed the ITO to register the firm for the year 1964-65.

(3.) IN CIT v. Sayaji Mills Ltd. [1974] 94 ITR 26, 33, while dealing with the provisions of the Act of 1922, the Gujarat High Court observed as under :