The requirement to file a declaration under Section 184(7) of the Income-tax Act along with the return of income is directory and not mandatory.

S.K.JHA, J.

1. In this reference under sec. 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), the ITAT, Patna Bench, has submitted a statement of the case and referred the following question of law for the opinion of this court:

"Whether, in the facts and circumstances of the case, the order of Tribunal allowing registration of the firm is legal and proper?"

2. The assessee was a registered firm. For the assessment year 1962-63, it filed a return of its income on the 11th of February, 1963, but before the assessment was made, it submitted a declaration under sec. 184(7) of the Act on the 27th of November, 1966, for the continuation of the registration for the previous year. The Income-tax Officer assessed the assessee as an unregistered firm on the ground that the declaration under sec. 184(7) was filed late and not along with the return. Therefore, the final assessment of the assessee was made by the assessing officer by treating it as an unregistered firm and not allowing renewal to it on the belated submission of the declaration in due form. The assessee preferred an appeal before the Appellate Assistant Commissioner who refused to interfere holding that no appeal lay before him against the order of refusal passed by the Income-tax Officer. The Appellate Assistant Commissioner also held that the word "status" did not cover this aspect of the matter and that, therefore, keeping in view the provisions of sec. 246 of the Act, the appeal before him could not be entertained. The assessee then preferred a second appeal before the Appellate Tribunal. The Tribunal while deciding in favour of the assessee held that the appeal was maintainable also in the matter concerning the status of the assessee and further that renewal could not be refused merely because the declaration in due form had not been literally submitted along with the return filed by the assessee. The Tribunal held:

"Therefore, even though the necessary declaration under sec. 184(7) was filed much after the filing of the return but before the assessment was taken up, it did not alter the position, in any way, of the firm from enjoying registration. As the effect of registration granted in the earlier year continued and the declaration was filed before the assessment was taken up, it would not change the position in any way. In this view of the matter, we hold that the firm should be assessed as a registered firm for the year under appeal."

3. At the instance of the Commissioner of Income-tax thereafter, this reference under sec. 256(1) has been made.

4. I may state at the outset that the question whether the declaration furnished by the assessee was actually an application under sec. 184(1) of the Act or a declaration under sec. 184(7) was not canvassed before any of the income-tax authorities. Had it been an application for registration under sec. 184(1) of the Act, different considerations would arise and different results may have followed. But since the parties before the Tribunal have treated the case as being one of a declaration under sec. 184(7) of the Act and this reference has been made pursuant thereto, I refrain from expressing any opinion regarding the applicability of sec. 184(4) of the Act which prescribes the time limit for the filing of application for registration under sec. 184(1) of the Act. Such a question does not arise from the order of the Tribunal nor has the learned standing counsel for the revenue invited us to this aspect of the matter.

5. Learned standing counsel for the department has urged that the Tribunal has not taken a correct view of the true intent and purport of sub-section (7) of section 184 of the Act and the provisos thereto as it stood before the amendment of 1970, namely:

"184. (7) Where registration is granted to any firm for any assessment year, it shall have effect for every subsequent assessment year: Provided that (i) there is no change in the constitution of the firm or the shares of the