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Mysore Ammonia Supply Corpn. Vs. Inspecting Assistant - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Bangalore
Decided On
Judge
Reported in(1984)10ITD317(Bang.)
AppellantMysore Ammonia Supply Corpn.
Respondentinspecting Assistant
Excerpt:
.....that since shamsunder ceased to be a partner from 3-4-1981, the partners who continued thereafter signed form no. 12 and it was not necessary to obtain the signature of shamsunder who was no longer a partner. in this connection reliance was placed on a decision of the karnataka high court in addl.cit v. s.v. ratnaswamy & sons [1977] 106 itr 154. the learned departmental representative submitted that since shamsunder had not signed form no. 12, registration has been rightly refused.3. we have considered the rival submissions. the karnataka high court in s.v. ratnaswamy & sons' case (supra) has held that the furnishment of declaration contemplated by the second proviso to section 184(7) of the income-tax act, 1961, is by the 'firm' alone, which, in turn, would only mean its.....
Judgment:
1. The assessee-firm filed Form No. 12 duly signed by five partners.

The IAC found that during the accounting year there were six partners and one of them, Shri J. Shamsunder, had not signed. The assessee explained that Shamsunder ceased to be a partner with effect from 3-4-1981 and a fresh deed of partnership was drawn up on 4-4-1981.

Hence, Shamsunder has not signed. The IAC held that the new partnership deed will be applicable for the assessment year 1982-83. He refused registration as Shamsunder has not signed in Form No. 12. On appeal, the Commissioner (Appeals) upheld the same. Against the same, the present appeal is filed.

2. The learned counsel for the assessee submitted that since Shamsunder ceased to be a partner from 3-4-1981, the partners who continued thereafter signed Form No. 12 and it was not necessary to obtain the signature of Shamsunder who was no longer a partner. In this connection reliance was placed on a decision of the Karnataka High Court in Addl.

CIT v. S.V. Ratnaswamy & Sons [1977] 106 ITR 154. The learned departmental representative submitted that since Shamsunder had not signed Form No. 12, registration has been rightly refused.

3. We have considered the rival submissions. The Karnataka High Court in S.V. Ratnaswamy & Sons' case (supra) has held that the furnishment of declaration contemplated by the second proviso to Section 184(7) of the Income-tax Act, 1961, is by the 'firm' alone, which, in turn, would only mean its partners as constituted at the time of making the declaration. It is those partners who would be adversely affected in consequence of non-continuance of registration. In our view, the above ratio squarely applies to the instant case. In the instant case, partners constituted at the time of filing declaration in Form No. 12 have signed the application. They would be affected in consequence of non-continuation of registration. Since Shamsunder was no longer a partner when the application in Form No. 12 was filed, he did not sign the application. There is no justification to refuse continuance of registration on the ground that he has not signed the application in Form No. 12 as it is the subsisting partners at the time of filing application in Form No. 12 who have to sign the said application and they have signed. So, the assessee will be entitled for continuation of registration. Thus, we direct the IAC to grant registration to the assessee-firm.


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