Bhopinder Singh Dhillon, J.
1. The following question of law has been referred by the I.T. Appellate Tribunal for the opinion of this court:
'Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in condoning the delay in filing the application for registration and directing the Income-tax Officer to take the status of the assessee-firm as registered firm ?'
2. Brief facts giving rise to this reference are that on March 30, 1968, Sarvshri M.M. Beri, N.K. Beri, R.P. Beri and their father, Shri Gurdial Singh Beri, entered into a partnership to carry on the business of manufacture and sale of chemicals in the name and style of M/s. Beri Chemical Industries, Jullundur. This firm was granted registration till the assessment year 1970-71. On March I, 1971, Gurdial Singh Beri passed away. Thereupon a new partnership deed was executed on March 2, 1971, and Shrimati Vidyawati, widow of Shri Gurdial Singh, joined the firm as a partner.
3. On September 8, 1971, the assessee (i.e., the newly constituted firm) filed an application for registration for the assessment year 1971-72. Under Section 184(4) of the I.T. Act, 1961 (hereinafter called the Act), this application should have been filed before the end of the previous year, i.e., March 31, 1971. The assessee prayed for condonation of the delay in filing the application for registration on the ground that Shri Gurdial Singh was the managing partner of the firm and that, due to his death, the other partners were in a state of shock and so they could not apply for registration before March 31, 1971. The ITO rejected the plea and completed the assessment of the assessee in the status of U.R.F. The appeal filed by the assessee was dismissed by the AAC. On second appeal, the Tribunal accepted the plea of the assessee and condoned the delay in filing the application for registration and directed the ITO to take the status of the assessee-firm as registered firm. While doing so, the Tribunal observed as under :
'We have gone through the records and heard the learned representatives of the parties. In our opinion, the assessee deserves to succeed. We find that the firm, as constituted before the death of M/s. Gurdial Singh, was granted registration till the assessment year 1970-71. Again, the assessee-firm as constituted after the death of Shri Gurdial Singh Beri has also been granted registration for the assessment year 1972-73. That being so, the genuineness of the assessee-firm is beyond question. In such a situation, to refuse registration to the assessee-firm for the assessment year under consideration on a technical ground will be quite unfair. Since Shri Gurdial Singh Beri died on March 1, 1971, there was only one month for the other partners to file the application for registration for the assessment year 1971-72. Now, it is in the affidavit dated August 28, 1972, of Shri M.M. Beri that it was Shri Gurdial Singh who was the managing partner of the firm and who used to carry on the entire business and that it was he, who was operating the bank accounts and attending to the sales tax and income-tax matters. There is no good reason to disbelieve this affidavit. We, therefore, accept the plea of the assessee that the other partners of the firm, being the sons and widow of Shri Gurdial Singh, were in mourning and not in a proper frame of mind to attend to the affairs of the firm after March 1, 1971. Since the firm has been granted registration for the earlier and subsequent years, we take a broader view in the matter and hold that the assessee was prevented by sufficient cause from making the application for registration before the end of the previous year. We, accordingly, condone the delay in filing this application. Since this is the only ground on which registration was refused and since the firm is admittedly genuine, we direct the Income-tax Officer to take the status of the assessee-firm as registered firm.'
4. After hearing the learned counsel for the Revenue, we are of the opinion, that the question of law referred to us has to be answered in the affirmative, in favour of the assessee-firm and against the Revenue. The relevant portion of the order of the Tribunal has been reproduced in the earlier part of the judgment. The Tribunal recorded a finding of fact that the firm was granted registration till the assessment year 1970-71, and the firm, as constituted after the death of Shri Gurdial Singh Beri, was granted registration for assessment year 1972-73. It was, therefore, rightly found by the Tribunal that the firm was genuine. Shri Gurdial Singh Beri died on March 1, 1971, i.e., 30 days before the application for registration of the new firm could be filed. The Tribunal accepted the affidavit of Shri M. M. Beri that Shri Gurdial Singh was the managing partner, who was operating the bank accounts and attending to the sales tax and income-tax matters and, due to his death, the partners of the firm were in a state of shock and not in a proper frame of mind to attend to the affairs ofthe firm. The acceptance by the Tribunal of the plea put forth by the assessee-firm is essentially a finding of fact. Nothing could be pointed out by Mr. D.N. Awasthy, the learned counsel for the Revenue, that any irrelevant consideration prevailed with the Tribunal or any relevant consideration was ignored. The Tribunal had the discretion to condone the delay in filing the application for registration and, in our considered opinion, the discretion exercised by it in condoning the delay cannot be held to be arbitrary.
5. For the reasons recorded above, the aforesaid question of law, referred by the Tribunal for the opinion of this court, is answered in the affirmative in favour of the assessee-firm and against the Revenue. There will be no order as to costs.