COMMISSIONER OF INCOME TAX Vs. CHATURBHUJ RADHAKISHAN

JUDGEMENT

(1.) THIS reference under Section 256(1) of the I.T. Act, 1961 (hereinafter referred to as "the Act"), has been made by the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, for the opinion to this court on the following question of law :

(2.) THE facts which have given rise to this reference briefly are : THE assessee, M/s. Chaturbhuj Radhakishan Binote (hereinafter referred to as "the assessee"), filed a return of its income in the status of a registered firm. THE assessee also filed on October 23, 1967, an application for registration along with a partnership deed. THE relevant accounting period of the assessee ended on May 11, 1967. As such the application for registration was submitted beyond the time prescribed under Section 184(4). THE assessee was asked by the ITO, "A" Ward, Chittorgarh, who was the assessing authority, to explain the delay. THE reason given by the assessee, in his reply for the delay which took place in filing the application for registration, was that one of the partners of the assessee-firm, Shri Roop Narain, was reluctant to sign the partnership deed and as he signed the said deed very late, the delay was caused in filing the application for registration. THE ITO, by his order dated December 13, 1971, held that the reason furnished by the assessee for the delay in filing the application for registration was not convincing and as such he refused to condone the said delay. THE assessing authority also held that the firm was not genuinely constituted during the accounting period. He, therefore, refused to register the firm and rejected the application for registration and directed that the assessee be assessed to tax in the status of an unregistered firm.

(3.) THE assessee-firm has to make an application to the ITO concerned for obtaining registration of the firm under Section 184. In case the partnership is evidenced by an instrument in writing and the individual shares of the partners are specified in the instrument, such application should be accompanied by a copy of the partnership deed. An application for registration is to be made to the ITO having jurisdiction to assess the firm and is to be signed by all the partners personally, or in the case of a dissolved firm, by all the persons who were partners of the firm immediately before its dissolution and by the legal representatives of any deceased partner. An application for registration of a firm is to be made before the end of the previous year of the assessment year in respect of which the registration is sought. But in case the application is made after the end of the previous year, the ITO has a discretion to condone the delay and entertain the application for registration of the firm, if he is satisfied that the delay was caused due to sufficient cause. However, in case the ITO refuses to condone the delay, the application for registration of the firm would be rejected on the ground that it was filed beyond the period prescribed by law.