1. Messrs. Ashwani Kumar Maksudan Lal, the first petitioner, is a partnership firm. It was registered under Section 184 of the Income-tax Act, 1961, for the assessment year 1964-65. When filing its return for the assessment year 1965-66, the petitioner-firm submitted a declaration, purporting to be in Form No. XII, as required by Rule 24 of the Income-tax Rules, 1962, for the purpose of continuing the benefit of registration for that year also. It appears that the declaration form should have been signed, among others, by Arun Kumar, but it was signed instead by Ashok Kumar. On August 31, 1967, the Income-tax Officer made an order holding that because, of this error the declaration was not in the formprescribed by the rules and directing :
2. ' The registration oi the firm granted in the assessment year 1964-65 is not allowed to be continued for the assessment year 1965-66 and the firm is treated as unregistered for the purpose of tax.' The petitioner-firm filed an appeal against that order, and the appeal was dismissed by the Appellate Assistant Commissioner on December 15, 1967, on the ground that it did not lie. The petitioner-firm then applied in revision, and the revision application has been dismissed by the Additional Commissioner oi Income-tax by his order dated July 23, 1970, in which he has endorsed the view that the appeal filed before the Appellate Assistant Commissioner was not maintainable.
3. The petitioners pray for reliei under Article 226 of the Constitution.
4. Learned counsel for the petitioners contends that the appeal filed before the Appellate Assistant Commissioner was maintainable, and the decision of the revenue authorities to the contrary is erroneous. To appreciate the contention it is necessary, we think, to examine the provisions of the Income-tax Act, 1961, relating to registration of firms.
5. Sections 184 and 185 of the Act contemplate, an application for registration to the Income-tax Officer on behalf of the firm, the consideration of the application by the Income-tax Officer and upon his being satisfied of the existence of a genuine firm during the previous year with the constitution specified in the instrument of partnership an order registering the firm for the assessment year. If he is not so satisfied, the Income-tax Officer is empowered to pass an order refusing to register a firm. Section 184(7) provides that:
' (7) Where registration is granted to any firm for any assessment year, it shall have effect for every subsequent assessment year:
(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, along with its return of income for the assessment year concerned, a declaration to that effect, in the prescribed form and verified in the prescribed manner.'
6. In case a change has taken place in the previous year in the constitution of the firm or the shares of the partners, the firm must apply for fresh registration for the assessment year concerned.
7. The right of appeal in the matter of registration of the firm is conferred by Section 246(j) of the Act, An appeal lies against:
' an order refusing to register a firm under Clause (b) of Sub-section (1) or under Sub-section (5) of Section 185.'
8. Section 185(1)(b) is the provision empowering the Income-tax Officer to refuse to register the firm on an application made to him for registration. Section 185(5) is a provision which empowers the Income-tax Officer to refuse to register the firm when in respect of any assessment year there is on the part of the firm any such failure as is mentioned in Section 144. Now, so far as the first is concerned, two things are clear : The appeal lies against an order, and the order must be one refusing to register the firm. The first question then is whether what was done by the Income-tax Officer on August 31, 1967, can be described as an order refusing to register the firm. When regard is so had to Section 185(1)(b), it is clear that the order contemplated by that provision is an order on the application for registration of a firm. The Income-tax Officer is called upon to consider whether during the previous year there was a genuine firm in existence and whether the firm had the constitution specified in the instrument of partnership. Under Section 184(7), on the other hand, all that the law requires is a declaration that there is no change in the constitution of the firm or the shares of the partners as evidenced by the instrument of partnership. The considerations under Section 185(1) are not identical with those under Section 184(7). The first relates to a situation where the firm is being registered for the first time for an assessment year and the latter to a situation where the effect of registration already granted is sought to be continued for a subsequent assessment year. Then, it is plain that when registration is granted for the first time, the law requires an express order granting registration. But when the effect of such registration is sought for a subsequent assessment year, no such order is contemplated. Section 184(7), by its very operation, continues that effect provided the conditions mentioned therein are fulfilled. If there is no change in the constitution of the firm or the shares of the partners, and a declaration to that effect is furnished, the benefit of registration is continued for the subsequent assessment year. All that is contemplated is that the Income-tax Officer should record a certificate on the instrument of partnership or on the certified copy submitted in lieu thereof to the effect that the firm has been registered for the relevant assessment year. That is Section 185(4). No appeal has been provided against a refusal by the Income-tax Officer to record such certificate.
9. In our opinion, the order of the Income-tax Officer made in the present case cannot be considered as an order under Section 185(1)(b) and, therefore, the revenue authorities are right in holding that there is no appeal against that order.
10. Learned counsel for the petitioners has next drawn our attention to the fact that the revision application before the Additional Commissioner also specifically sought relief against the Income-tax Officer's order and, he says, the Additional Commissioner has not considered this aspect of the matter. Upon a perusal of the impugned order it does appear that the Additional Commissioner has confined himself to the Appellate Assistant Commissioner's order and has merely examined the question whether the Appellate Assistant Commissioner was right in holding that the appeal before him was not maintainable. He has expressly refrained from considering the merits of the assessee's case that the defect in the declaration filed before the Income-tax Officer was merely a technical one and that the Income-tax Officer should have given the petitioners an opportunity to correct it. We think that the Additional Commissioner should have considered the revision application as one directed against the Income-tax Officer's order also. It may be pointed out that by one of the reliefs claimed in the revision application the assessee ,prayed that ' since the order of the learned Income-tax Officer is illegal having been passed under Section 184 the same may kindly be set aside and the assessee be allowed an opportunity to rectify the defect if any and renewal of registration may kindly be allowed for the assessment year 1965-66. ...' Shri Brijlal Gupta, learned counsel for the Commissioner of Income-tax, has pointed out that the revision application if considered as directed against the order of the Income-lax Officer is greatly belated having been filed beyorid the period of limitation prescribed therefor, and is also not accompanied by a further court fee of Rs. 25, the court fee furnished having been deposited in respect of the order of the Appellate Assistant Commissioner only. These are matters, we think, which should rightly be left to the Commissioner of Income-tax to consider when he takes up the revision application now, It will be for him to consider whether or not in the exercise of his discretion he will condone the delay in filing the revision application so far as it is directed against the Income-tax Officer's order and whether an additional court fee of Rs. 25 is necessary.
11. The petition is allowed. The order of the Additional Commissioner of Income-tax, Kanpur, is set aside. He is now required to consider the revision application of the petitioners so far as it is directed against the , order of the Income-tax Officer dated August 31, 1967, in the light of the observations made above. In the circumstances, there is no order as to costs.