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Commissioner of Income-tax Vs. Delhi Sanitary Stores - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtRajasthan High Court
Decided On
Case NumberD.B. Income-tax Reference No. 36 of 1970
Judge
Reported in[1981]127ITR822(Raj)
ActsIncome Tax Act, 1961 - Sections 184 and 254(1); Income Tax Rules, 1962
AppellantCommissioner of Income-tax
RespondentDelhi Sanitary Stores
Appellant Advocate Rajendra Mal Lodha, Adv.
Respondent Advocate S.M. Mehta, Adv.
Excerpt:
- - the appeal filed by the assessee came up for decision before the aac on june 13, 1967, but it met with no success. simply because the ito or the aac failed to take notice of that application on the ground that it contained a clerical error regarding the assessment year mentioned as 1963-64, instead of 1964-65, it cannot be said that any useful purpose will be served by answering the question against the assessee and remanding the case to the i......being, each having a one-fourth share in the profit and loss. on january 31, 1963, the assessee-firm filed an application in forms nos. 11 and 11a for registration. in this application, the names of all the four partners were mentioned, but the assessment year was erroneously mentioned as 1963-64 instead of 1964-65. the assessing authority issued a notice to the assessee-firm to show cause why the firm be not assessed as an unregistered firm for the year 1964-65. on july 19, 1966, the assessee-firm filed a reply to the notice along with an application for registration in the prescribed form. the ito, vide his order dated july 30, 1966, refused registration to the firm on the ground that the application filed by the assessee for registration was belated and no sufficient reason was.....
Judgment:

Shrimal, J.

1. On an application, dated April 11, 1969, filed by the assessee, M/s. Delhi Sanitary Stores, Jaipur, the Income-tax Appellate Tribunal referred the following question for answer to this court :

' Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in directing the Income-tax Officer to grant registration to the assessee for the assessment year 1964-65 '

2. The facts giving rise to this reference are that a partnership firm, under the name and style of M/s. Delhi Sanitary Stores, Jaipur, was brought into existence on January 21, 1961, and the partnership deed was executed on April 30, 1961. This partnership comprised of two partners, namely, Rajesh Chand Gupta and Sushil Chand Gupta, having equal shares in the profit and loss of the firm. The above-named firm was assessed as a registered firm for the assessment year 1962-63. By a dissolution deed, dated January 11, 1963, the above-named firm was dissolved with effect from January 1, 1963. On January 1, 1963, a new firm, consisting of Kailash Chand Gupta, Kishan Chand Gupta, Rajesh Chand Gupta and Sushil Chand Gupta as partners came into being, each having a one-fourth share in the profit and loss. On January 31, 1963, the assessee-firm filed an application in Forms Nos. 11 and 11A for registration. In this application, the names of all the four partners were mentioned, but the assessment year was erroneously mentioned as 1963-64 instead of 1964-65. The assessing authority issued a notice to the assessee-firm to show cause why the firm be not assessed as an unregistered firm for the year 1964-65. On July 19, 1966, the assessee-firm filed a reply to the notice along with an application for registration in the prescribed form. The ITO, vide his order dated July 30, 1966, refused registration to the firm on the ground that the application filed by the assessee for registration was belated and no sufficient reason was given for not filing the application in time. The appeal filed by the assessee came up for decision before the AAC on June 13, 1967, but it met with no success. The second appeal filed by the assessee before the Income-tax Appellate Tribunal, Delhi Bench-C, came up for decision on January 31, 1969. The Tribunal held that there was nothing on record to doubt or challenge the genuineness of the firm and directed the ITO to register the firm for the year 1964-65.

3. Both the parties filed applications for rectification of the above noted order. The Tribunal partly accepted the application filed by the assessee, and modified the order as under :

'We delete the sentence in lines 14 to 17 in paragraph 3 of its order and substitute the same as follows : 'The appellant submits that the defects in the application for registration made to the Income-tax Officer may be condoned and registration be granted'.'

4. As already noted above, on an application dated April 11, 1969, the above noted question has been referred by the Tribunal with the statement of the case for being answered by this court.

5. The main contention of the learned counsel for the revenue is that the question regarding the genuineness of the firm was not raised at any stage either before the ITO or the AAC and the Tribunal had no jurisdiction to allow the assessee to raise a new point and decide the question of registration on the ground of the genuineness of the firm. He further urged that at the most the Tribunal could have remanded the case to make an enquiry about the genuineness of the firm.

6. We do not find much substance in the above noted argument. Section 254(1) of the Income-tax Act, 1961 (to be referred to hereinafter as ' the Act ') reads as under :

'254. Orders of Appellate Tribunal--(1) The Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. '

7. In our considered opinion the Tribunal has the jurisdiction to allow a new question to be raised for the first time in appeal. It would always be in the interests of justice to allow such a question to be raised if it is a question which can be decided on the facts already on record. It is within the jurisdiction of a Tribunal to grant a relief on a ground different from that urged before the lower authorities. It can even allow a new plea after taking fresh evidence or without taking any evidence in the matter.

8. In Hukumchand Mills Ltd. v. CIT : [1967]63ITR232(SC) relied upon by the learned counsel for the revenue, Ramaswami J., speaking for the court, dealt with the corresponding provision of the Act of 1922 and observed as follows (p. 238) :

'The Rules are merely procedural in character and do not, in any way circumscribe or control the power of the Tribunal under Section 33(4) of the Act (of 1922).'

9. His Lordship, while interpreting the word 'thereon ' appearing in Section 254(1) of the Act, further observed (p. 237) :

'The word 'thereon', of course, restricts the jurisdiction of the Tribunal to the subject-matter of the appeal. The words ' pass such orders as the Tribunal thinks fit' include all the powers (except possibly the power of enhancement) which are conferred upon the Appellate Assistant Commissioner by Section 31 of the Act.'

10. In CIT v. Sayaji Mills Ltd. : [1974]94ITR26(Guj) while dealing with the provisions of the Act of 1922, the Gujarat High Court observed as under :

' It would appear from the provisions of Section 33(4), as construed by the Supreme Court, that the Legislature has conferred upon the Appellate Tribunal wide powers in dealing with appeals preferred to it. The jurisdiction of the Tribunal is undoubtedly restricted to the subject-matter of the appeal but once it is shown that a particular claim or contention was the subject-matter of the appeal before the Tribunal, the law authorises the Tribunal to pass such orders in relation to such claim or contention as it thinks fit. '

11. In the case on hand, the learned counsel appearing on behalf of the revenue has not been able to point out anything on the basis of which a doubt can be raised about the genuineness of the concerned firm. The statement of the case reveals that an application, dated January 31, 1963, for registration of the firm, containing the names of all the four partners, did exist on the record. Simply because the ITO or the AAC failed to take notice of that application on the ground that it contained a clerical error regarding the assessment year mentioned as 1963-64, instead of 1964-65, it cannot be said that any useful purpose will be served by answering the question against the assessee and remanding the case to the I.T. authorities for further enquiry regarding the genuineness of the firm.

12. Taking a conspectus of the circumstances of the case, we are of the opinion that the Tribunal rightly directed the I.T. authorities to register the firm for the year 1964-65. The question regarding the delay raised before the two Tribunals by the revenue is without any substance, because there already existed an application, dated January 31, 1963, on the record.

13. Clerical errors have normally been considered as sufficient ground for condoning the delay in filing an application.

14. On the aforementioned grounds, we answer the question referred to us in the affirmative and against the revenue. In the facts and circumstances of the case, the parties are left to bear their own costs.


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