1. This is a reference under Section 256(1) of the I.T. Act by the Income-tax Appellate Tribunal, Indore Bench, stating the case and referring the following questions for our opinion :
'1. Whether, on the facts and circumstances of the case, the Tribunal was right in saying that the application filed on 20-1-78 (it should be 20-1-68) for the assessment year 1963-64 was (not) within the reasonable time of refusal of registration (sic) for the assessment year 1962-63 ?
2. Whether, on the facts and circumstances of the case, the Tribunal was right in saying that the application for registration filed on 5-1-1974, for the assessment year 1963-64 was (not) within a reasonable time and
3. Whether, on the facts and circumstances of the case, the Tribunal was justified in upholding the orders of the authorities below in refusing registration to the assessee-firm for both the years in question ?'
2. Material facts are as follows. Assessment years involved are 1963-64 and 1964-65. For the assessment year 1963-64, the assessee filed Form No. XI and Form No. XII on January 20, 1968. Form No. XI is prescribed for filing an application for registration of the firm under the I.T. Act and Form No. XII is prescribed for applying for continuation of registration. The ITO held that the assessee had not been granted registration for the preceding years. As according to him, Form No. XI was belated by about five years and no reasonable cause had been shown for this delay he refused registration.
3. In the year 1964-65 again Form Nos. XI and XII for registration and continuation of the registration were filed by the assessee on January 3, 1974. For identical reasons as for the preceding year the ITO refused registration. The orders of the ITO were confirmed by the AAC who held that no reasonable explanation had been submitted for delay in filing the application in Form No. XI.
4. When the matter went before the Appellate Tribunal, the Tribunal held that registration to the firm had been refused for assessment years 1960-61, 1961-62 and 1962-63, and the orders of refusal had not been set aside. According to the Tribunal no reason was advanced for a condonation of the delay. Besides, the Appellate Tribunal further observed that no fresh ground for granting registration had been shown for the assessment years in question. No account books had been kept by the assessee and, therefore, 'even if the delay was to be condoned registration could not be granted to the assessee on merits'.
5. It was not in dispute before us that registration had not been granted to the assessee for the years preceding the assessment years in question. It was also not in dispute that the applications, for grant of registration, in Form No. XI for assessment years 1963-64 and 1964-65, were inordinately delayed. Section 184(4) of the I.T. Act lays down that the application (for registration of the firm) shall be made before the end of the previous year for the assessment year in respect of which the registration is sought. As noted by the Appellate Tribunal the application for registration in Form No. XI for assessment year 1963-64, was filed on January 20, 1968, and for assessment year 1964-65, it was filed on January 3, 1974.
6. Section 184(4) of the Act contains a proviso that the ITO may entertain an application made after the end of the previous year, if he is satisfied that the firm was prevented by sufficient cause from making the application before the end of the previous years. Learned counsel for the assessee conceded that at no stage the assessee applied for a condonation of delay under the proviso to Section 184(4) of the Act. It was also not shown that at any stage the assessee had given even an oral explanation before the ITO for the delay in applying for registration in Form No. XI. In the circumstances, therefore, the Appellate Tribunal was right in saying that applications for registration filed on January 20, 1968, for assessment year 1963-64, and on January 3, 1974, for assessment year 1964-65, were not within reasonable time.
7. Learned counsel for the assessee, Shri Chitale, contended that the assessee's application for registration for assessment year 1962-63, had been rejected earlier and ex parte assessment under Section 144 of the Act was framed. Later an order under Section 146 of the Act was passed and the assessment was reopened. On August 4, 1976, an order refusing registration was passed for the assessment year 1962-63. According to Shri Chitable, this was a reasonable explanation for making an application for registration beyond the time provided under Section 184(4) of the Act.
8. This argument has to be rejected for two reasons. Firstly, it was never raised before the ITO to seek a condonation of the delay. Secondly the rejection of the application for registration finally on August 4, 1976, had no relevance whatsoever with the delay in filing the application for registration. The application for registration was actually filed on January 20, 1968, and, therefore, at that time the question that the registration for the preceding year was refused in the year 1976 could never arise. The Tribunal, therefore, was right in taking the view it did.
9. The statement of the case shows that, besides delay, the Tribunal considered the application on merits also and held that the assessee was not entitled to registration for the grounds stated in the order. This was a finding of fact. Neither in the statement of the case submitted along with the reference application nor in the questions suggested by the assessee any grievance was made about this finding. This court could in the circumstances refuse to answer the questions referred to it because the exercise would have been sterile. However, we will not like to dilate on this point.
10. Questions Nos. 1, 2 and 3 are, therefore, answered in the affirmative, in favour of the revenue and against the assessee. Costs of this reference will be borne by the assessee. Advocate's fee Rs. 150.