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Commissioner of Income-tax Vs. New Pacca Arhtia Association - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtPunjab and Haryana High Court
Decided On
Case NumberIncome-tax Reference No. 24 of 1975
Judge
Reported in[1977]110ITR727(P& H)
ActsIncome Tax Act, 1961 - Sections 184(7), 185 and 186
AppellantCommissioner of Income-tax
RespondentNew Pacca Arhtia Association
Appellant Advocate D.N. Awasthy and; B.K. Jhingan, Advs.
Respondent Advocate B.S. Gupta,; K.C. Jain and; Gurdev Singh, Advs.
Excerpt:
- sections 100-a [as inserted by act 22 of 2002], 110 & 104 & letters patent, 1865, clause 10: [dr. b.s. chauhan, cj, l. mohapatra & a.s. naidu, jj] letters patent appeal order of single judge of high court passed while deciding matters filed under order 43, rule1 of c.p.c., - held, after introduction of section 110a in the c.p.c., by 2002 amendment act, no letters patent appeal is maintainable against judgment/order/decree passed by a single judge of a high court. a right of appeal, even though a vested one, can be taken away by law. it is pertinent to note that section 100-a introduced by 2002 amendment of the code starts with a non obstante clause. the purpose of such clause is to give the enacting part of an overriding effect in the case of a conflict with laws mentioned with the..........to the income-tax appellate tribunal. the tribunal held that in the case of firms which had been granted registration prior to april 1, 1971, it was not necessary to file the declaration in the form which was prescribed with effect from april 1, 1971. it was enough if the assessee filed a declaration in the form which was obtaining before april, 1971. at the instance of the revenue, the following question has been referred to us for our decision : 'whether, on the facts and circumstances of the case, the tribunal was right in law, in holding that the obligation to furnish the section 184(7) income-tax act declaration in the form, as it stood amended as per the income-tax (fourth amendment) rules, 1971, arose only in cases where the firm had been allowed registration on the basis of an.....
Judgment:

Chinnappa Reddy, J.

1. The assessee is a firm consisting of 19 partners. Registration was granted to the firm in some assessment year during the past. Along with the return of income for the assessment year 1971-72, the assessee filed a declaration signed by all the 19 partners on October 25, 1971, for the purpose of Section 184(7) of the Income-tax Act. The declaration, however, was not in the form which was prescribed with effect from April 1, 1971, but was in the form which was in vogue prior to April 1, 1971. The Income-tax Officer required the assessee to file a declaration in the latest prescribed form but the assessee was not able to do so within the time granted by the Income-tax Officer. On the ground that there was no declaration in the prescribed form, the Income-tax Officer decided that the registration previously granted would not have effect for the assessment year 1971-72. We may mention here that registration was again granted to the firm for the assessment year 1972-73. The assessee preferred an appeal to the Appellate Assistant Commissioner and on the dismissal of the appeal, the assessee preferred a second appeal to the Income-tax Appellate Tribunal. The Tribunal held that in the case of firms which had been granted registration prior to April 1, 1971, it was not necessary to file the declaration in the form which was prescribed with effect from April 1, 1971. It was enough if the assessee filed a declaration in the form which was obtaining before April, 1971. At the instance of the revenue, the following question has been referred to us for our decision :

'Whether, on the facts and circumstances of the case, the Tribunal was right in law, in holding that the obligation to furnish the Section 184(7) Income-tax Act declaration in the form, as it stood amended as per the Income-tax (Fourth Amendment) Rules, 1971, arose only in cases where the firm had been allowed registration on the basis of an application form as it stood amended as per the said 1971 Rules ?'

2. Under the Income-tax Act of 1922, it was necessary for a firm to seek renewal of registration every year. Under the 1961 Act, however, once registration is granted, it enures for subsequent years provided there isno 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 registration was granted and the firm furnishes a declaration to that effect in the prescribed form. This is provided in Section 184(7). It is to be noted here that the declaration to be made by the firm in the prescribed form is only to the effect that 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 registration was granted and nothing more. Beyond the filing of the declaration in the prescribed form, no other procedure is prescribed for the continuance of registration. Section 185 prescribes the procedure for the making of an application for registration of a firm and the procedure to be followed thereafter Section 185 applies only to cases where registration is sought for the first time and not to cases where registration has already been granted. Section 186 provides for cancellation of registration where it is discovered that there is no genuine firm in existence as registered. In Section 185, an Explanation was added to take effect from April 1, 1971, providing that for the purpose of Sections 185 and 186 a firm shall not be registered as a genuine firm if any partner of the firm was a benamidar of any other partner. Consequent on the addition of the Explanation in Section 185, the form previously prescribed for making a declaration to take effect from April 1, 1971, was amended so as to provide for a declaration that none of the partners was a benamidar of the other. The question of making such a declaration does not strictly arise since, as already pointed out by us, the declaration contemplated by Section 184(7) is only to the effect that there is no change in the constitution of the firm or the shares of the partners as evidenced by the instrument of partnership. Whatever may be said about the need for the particular declaration that no partner is a benamidar of the other in cases where registration is granted subsequent to April 1, 1971, we do not think that any such declaration is called for in a case where registration was granted prior to April 1, 1971. In cases where registration was granted prior to April 1, 1971, it is enough if a declaration is made in the old Form No. 12. If the department wants to take advantage bf the Explanation to Section 185, in any given case, it is open, to the department to do so by starting proceedings under Section 186. So far as continuance of registration granted to a firm prior to April 1, 1971, is concerned, we are of the opinion that it cannot be denied oh the ground that the declaration was made in old Form No. 12 and not in new Form No. 12. The question referred to us is, therefore, answered in the affirmative and in favour of the assessee. No costs.


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