1. The petitioner (hereinafter 'the firm') has been at all relevant times carrying on business in textile goods, chemicals and yarn in Bombay. By a partnership deed dated January 1, 1971, one Subhkaran Jatia anda Shivhari Jatia had agreed to carry on business in partnership in the name and style of M/S. Subhkaran & Sons. The said Subhkaran Jatia and Shivhari Jatia admitted some Sunilkumar Jatia and one Anilkumar Jatia to the benefits of the partnership. By a partnership deed dated September 3, 1975, the firm was reconstituted as follows :
Subhkaran Jatia ... 25% shareShivhari Jatia ... 25% shareVinodkumar Jatia ... 25% shareandAnilkumar Jatia(minor) ... 25% share
2. As a result of this partnership deed dated September 3, 1975, Sunilkumar Jatia (minor), who was admitted to the benefits of the partnership, was not continued to be given the said benefits and Anilkumar Jatia, who was a minor, was admitted to the benefits of the partnership. On November 4, 1975 (Kartik sud 1, Samvat 2032), the partnership deed in question was signed by the partners. Along therewith the partners also signed From No. 11A, under the Rules framed under the I.T. Act, 1961, for the purpose of applying for registration of the firm for the assessment year 1977-78. The said partnership deed and the said Form No 11A, both signed by the partners, were handed over to M/s. G. T. Agarwal & Co., chartered accountants of the firm, for the purpose of filing the same with the Income-tax Department. The said chartered accountants, however, overlooked the matter and through oversight, the said Form No. 11A along with copy of partnership deed dated September 3, 1975, remained to be filed with the Income-tax Department. The firm was not aware of this occurrence till when the present dispute arose.
3. On or about June 30, 1977, the firm field its return of income for the assessment year 1977-78 along with Form No. 12. In the said form, the firm had indicated who the partners were. The said form was signed by all the partners. Profit of the firm for the assessment year 1977-78 were also shown to have been distributed between the partners and the minor, Anilkumar Jatia, in the same ratio as shown in the partnership deed dated September 3, 1975. By a letter dated November 16, 1978, the ITO having jurisdiction to assess the firm pointed out that the firm had filed a declaration under s. 184(7) of the I.T. Act in Form No. 12. It was further pointed out that the firm had not furnished particulars as to when the former partner, Sunilkumar Jatia, was discontinued as a partner and when the new partner, Vinodkumar Jatia, was admitted thereunto. Particulars were called for in this behalf. By their letter of December 8, 1978, the chartered accountants of the firm forwarded Form No. 11A to the ITO. In the said letter, the chartered accountants had stated that the change in the constitution of the firm had taken place by a partnership deed duly executed on a stamp paper of Rs. 100 as on September 3, 1975, that registration to the firm was granted for all the previous years and that there existed a genuine firm and that the application for registration had been duly signed by the partners on November 4, 1975, and the same had been also handed over in time to the chartered accountants. In these circumstances, the chartered accountants contended that the delay (for no fault of the assessee) in filing Form No. 11A be condoned. On April 26, 1980, Vinodkumar Jatia, one of the partners, also examined himself before the ITO.
4. By his order dated March 19, 1980, the ITO, however, refused registration on the ground that there was no sufficient cause for not filing Form No. 11A in time. Aggrieved by this refusal, the firm filed an application under s. 264 of the said Act to the Commissioner. The said application was, however, rejected on January 13, 1981. Hence, this petition.
5. Hearing Mr. Dileep Dwarkadas, learned counsel for the firm, and Mr. R. J. Joshi, learned counsel for the respondents, and going through the impugned orders in the light of all such facts and circumstances to which my attention was invited by the respective counsel, this in my view is pre-eminently a fit case where the delay in question in filing Form No. 11A deserves to be condoned in the interest of justice. Here is a case where the firm and its partners are sought to be penalised and refused justice for no fault on their part. Record shows, and it is also admitted by the chartered accountants, that Form No. 11A had been, in fact, duly signed by all the partners in time and had also been, in fact, handed over to them for the purpose of filing the same with the Income-tax Department, but it remained to be so filed through sheer oversight. Record further indicates that the original firm had all along been granted requisite registration under the I.T. Act, and what is more, it is undisputed that except for the disputed assessment year involved in this petition, this very firm has been granted registration for all subsequent assessment years. In the context, it is relevant and pertinent to note that it is not the case of the Department that the firm was either bogus or had in fact no legal existence. In fact, as indicated, this very firm has been registration for the subsequent assessment years. Indeed, the firm had also produced before the authorities even a letter from a nationalised bank, the Central Bank of India, stating that the partner, Vinodkumar Jatia, of the reconstituted firm was operating the current account of the firm, since May 17, 1976, thus covering the period falling within the disputed assessment year involved in this petition. Equally pertinent is the fact that the firm's letter dated August 27, 1976 (being the period covered by the disputed assessment year herein), addressed to the Regional Transport Officer also indicated that Vinodkumar Jatia (who became a partner under the partnership deed of September, 1975) was admitted as a partner and also acted as a partner in the relevant accounting year. Also relevant to note is the fact that the firm's chartered accountants have been their standing chartered accountants for several years. Neither the chartered accountants nor the firm had at any time in the past nor at any time since after the disputed assessment year and till now committed any default in this behalf. We also have the evidence of Vinodkumar Jatia, partner, in support of the firm's case. Factors and circumstances lead to an irresistible inference that the firm and its partners all along remained under a genuine and bona fide impression that Form No. 11A, which had been duly signed by the partners and duly handed over to their standing chartered accountants, must have, in the normal course, been filed in time with the Income-tax Department. That this unfortunately was not so was discovered only when the dispute arose. The mistake in that behalf has been frankly admitted by the chartered accountants. They also requested that the assessee may not suffer for no fault on their part and for a sheer mistake arising out of oversight on the part of the chartered accountants.
6. In these circumstances, the better order, and one more in consonance with justice, should have been to accept the firm's request and condone the delay in filing Form No. 11A. Refusal to do so resulted in technicality triumphing over justice. A party may not suffer for no fault on his part and for a sheer mistake or oversight on the part of his legal or tax advisers. All that was necessary for the firm to do was in fact by it and its partners. That the chartered accountants made a mistake through oversight should not have been considered a fatal circumstance outweighing all the other facts and circumstances in favour of the assessee. Though to be perfect is divine, this mortal world has not as yet come across one so perfect and divine as to make no mistake at all.
7. Mr. Joshi, learned counsel for the respondents, contended that this court in its jurisdiction under art. 226 of the Constitution may not interfere with the impugned order. I am not inclined to agree. Where a party is not found to have committed a single mistake on his own part and where the fault in question to lie elsewhere and that too with professionals and has arisen out of sheer oversight on their part, to even so refuse to interfere would be akin to perpetuating the injustice suffered. Such a situation cannot be permitted to prevail.
8. In the result, this petition succeeds and the same is allowed. The impugned order dated January 13, 1981 (Ex. B), is set aside and quashed. The delay in submitting Form No. 11A is condoned. The respondents are directed to grant to the firm registration for the assessment year 1977-78. The petitioner will be entitled to claim from the Income-tax Department all such consequential reliefs as would follow from the above order and direction.
9. Rule is made absolute in terms aforesaid. In the circumstances of the case, however, there will be no order as to costs.
10. The bank guarantee furnished by the firm in pursuance of the interim orders passed by this court shall stand discharged