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A.S.S.S.S. Chandrasekaran and Brothers Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberTax Case No. 157 of 1968 (Reference No. 56 of 1968)
Judge
Reported in[1974]96ITR711(Mad)
ActsIncome Tax Act, 1961 - Sections 184(4), 185, 185(2) and 185(3)
AppellantA.S.S.S.S. Chandrasekaran and Brothers
RespondentCommissioner of Income-tax
Appellant AdvocateV. Ramachandran, Adv.
Respondent AdvocateV. Balasubrahmanyan and ;J. Jayaraman, Advs.
Excerpt:
.....not so..........section 184(4) reads as follows :' 184. (4) the application shall be made before the end of the previous year for the assessment year in respect of which registration is sought:. provided that the income-tax officer 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 year.' 4. it is seen from this provision that, in order to entertain an application for registration, it should have been presented before the end of the previous year for the assessment year in respect of which registration was sought. if there was any delay in filing the application and the delay is explained to the satisfaction of the income-tax officer, he could entertain the.....
Judgment:

Ramaswami, J.

1. The question that has been referred to us reads as follows :

' Whether the Appellate Tribunal is right in law in holding that no appeal lies from the order of the Income-tax Officer rejecting the assessee's application for registration as time barred '

2. The assessee is a partnership concern. For the assessment year 1964-65, it closed its accounts on February 12, 1964. An application for registration of the firm was filed on June 5, 1964. By an order dated March 15, 1965, the Income-tax Officer rejected this application as time-barred as no satisfactory explanation for the delay in filing the application had been offered. The assessee filed an appeal to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner rejected the appeal on the ground that the appeal was incompetent. This was on the basis that, though the order of the Income-tax Officer was purported to have been passed under Section 185, it was really an order under the proviso to Section 184(4). The Tribunal also agreed with this view and rejected the appeal.

3. In this reference, the learned counsel for the assessee, submitted that the application for registration could be rejected by the Income-tax Officer only under Section 185 and as such the appeal was maintainable. He also contended that the Income-tax Officer in fact purported to pass the order only under Section 185 and not under Section 184(4). He further contended that at best the order could be one under Section 185(2) and (3) and not under Section 184(4). We are unable to accept this contention. Section 184(4) reads as follows :

' 184. (4) the application shall be made before the end of the previous year for the assessment year in respect of which registration is sought:. Provided that the Income-tax Officer 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 year.'

4. It is seen from this provision that, in order to entertain an application for registration, it should have been presented before the end of the previous year for the assessment year in respect of which registration was sought. If there was any delay in filing the application and the delay is explained to the satisfaction of the Income-tax Officer, he could entertain the application even after the end of the previous year. Only after the application is entertained as being in time and requires to be considered on merits, it can be dealt with under Section 185. Section 185 deals with disposal of an application on entertainment of the same on merits while Section 184(4) has no concern with the merits of the application for registration. If the application was not in time and the delay in filing the same has not been executed by the Income-tax Officer, there is no application in the eye of law to be dealt with under Section 185. The learned counsel for the assessee relied on the heading given to the order of the Income-tax Officer as one made under Section 185 of the, Income-tax Act and sought to argue that it was only an order under Section 185 and not one made under Section 184(4). Once we find that the Income-tax Officer had jurisdiction to make such an order only under Section 184(4) and not under Section 185, mere quoting of a wrong provision of law will not either invalidate the order or make it one passed under the wrong provision of the Act. It is not disputed that under Section 184(4) the Income-tax Officer could refuse to entertain an application on the ground that it had not been filed before the end of the previous year. We are also of the view that the proviso to Section 184(4) enabling the Income-tax Officer to entertain the application made after the end of the previous year if he is satisfied that the firm was prevented by sufficient cause from making an application before the end of the previous year, implies also a power to refuse to entertain the application when he is not so satisfied. We are, therefore, of opinion that the order of the Income-tax Officer must be deemed to have been made under Section 184(4) and not under Section 185. If the order is one under Section 184(4), there could not be any dispute that no appeal would lie to the Appellate Assistant Commissioner or to the Tribunal.

5. It was next contended by the learned counsel for the assessee that the order made would come under Section 185(2). That provision states that the Income-tax Officer shall not reject an application for registration merely on the ground that the application is not in order, but shall intimate the defect to the firm and give it an opportunity to rectify the defect in the application. If the defect is not rectified within the time, the Income-tax Officer may reject the application. According to the learned counsel, the words ' on the ground that the application is not in order ' would cover all cases of defects, including the one of delay in filing the application. We are unable to agree with this contention. The defects contemplated under Sub-clauses (2) and (3) of Section 185 relate to formal defects when the application is filed in time and do not relate to the application being out of time. That is specifically covered under the provision of Section 184(4). We may also state that, even if this rejection in this particular case is to be treated as one under Section 185(2) at the relevant time, even an order under Section 185(2) was not an appealable order and, therefore, it is of no assistance to the assessee.

6. For the foregoing reasons we answer the question in the affirmative and against the assessee with costs. Counsel's fee Rs. 250.


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