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1990 Supreme(Pat) 350
PATNA HIGH COURT
G.G.Sohani and G.C.Bharuka JJ.
Commissioner Of Income Tax
Versus
Mumtaz Ali
Taxation No. 105 of 1978 ;
Decided On : OCTOBER 29, 1990
An order refusing condonation of delay in filing the declaration in Form No. 12 under the provisions of Sec. 184(7)(ii) of the Act is appealable under Sec. 246 (c) of the Act.
Headnote:
INCOME TAX - REGISTRATION OF FIRM - CONTINUATION - DELAY IN FILING DECLARATION - CONDONATION - APPEALABILITY OF ORDER - SEC. 184(7), 246(C), 246(J) - INCOME TAX ACT, 1961.
Fact of the Case:
The assessee, a partnership firm, filed its return of income on time but filed the statutory declaration seeking continuation of registration as per Sec. 184(7) of the Income Tax Act, 1961 (the Act) out of time. The Income-tax Officer refused to condone the delay and assessed the assessee as an unregistered firm. The assessee appealed to the Appellate Assistant Commissioner, who allowed the appeal and granted continuation of registration. The Department appealed to the Tribunal, which held that the appeal was maintainable.
Finding of the Court:
The court held that an order refusing condonation of delay in filing the declaration in Form No. 12 under the provisions of Sec. 184(7)(ii) of the Act would amount to an order affecting the status of the firm and, as such, it would be appealable under Sec. 246 (c) of the Act.
Issues: Whether an order refusing condonation of delay in filing the declaration in Form No. 12 under the provisions of Sec. 184(7)(ii) of the Act is appealable under Sec. 246 (c) or Sec. 246 (j) of the Act.
Ratio Decidendi: The court held that the assessment of a firm as a registered firm or as an unregistered firm is a matter concerning the status of the firm, and, as such, where the firm objects to the status under which it is assessed, the order complained of can be subjected to an appeal under Sec. 246 (c) of the Act.
Final Decision: Both the questions referred to above are answered in the affirmative, i.e., in favour of the assessee and against the Revenue.
G.C.Bharuka, J.
1. In pursuance of an application filed by the Department under Sec. 256(1) of the Income-tax Act, 1961 (hereinafter to be referred to as "the Act"), the Tribunal has referred the following questions of law for the opinion of this court :
"(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that the appeal was maintainable before the Appellate Assistant Commissioner against the order of the Income-tax Officer refusing to allow continuation of registration to the assessee-firm relating to the assessment year 1974-75 under Sec. 184(7) of the Income-tax Act, 1961 ?
(2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that the Appellate Assistant Commissioner was justified in entertaining the appeal against the order of the Income-tax Officer refusing condonation of delay to the assessee-firm as provided under Sec. 184(7) of the Income-tax Act, 1961 ?"
2. The assessee is a partnership firm. It was enjoying the status of a registered firm till the assessment year 1973-74. The present dispute relates to the assessment year 1974-75. The accounting year relevant to this assessment year ended on March 31, 1974. Under Sec. 139(1) of the Act, the assessee was required to file its return of income on or before July 31, 1974, and the assessee did file the return on July 31, 1974. But the statutory declaration in Form No. 12 required to be filed within the time prescribed for filing the return for seeking continuation of registration as per Sec. 184(7) of the Act was filed out of time, i.e., on October 8, 1974. Therefore, there was a delay in filing the said declaration seeking continuation of registration. On being asked by the Income-tax Officer to explain the reason for the delay in filing the said declaration, the assessee stated in writing that the delay was caused because of the serious illness of one of the partners of the firm, Smt. Noor Jehan, who was under medical treatment. In support of the same, a medical prescription was also filed. The Income-tax Officer did not feel satisfied with the cause advanced by the assessee for explaining the said delay and, therefore, he refused to allow continuation of registration to the firm for the assessment year in question. Accordingly, the Income-tax Officer assessed the assessee in the status of an unregistered firm.
3. The assessee preferred an appeal before the Appellate Assistant Commissioner who took the explanation of the assessee as reasonable and allowed the appeal thereby granting continuation of registration.
4. The Department went in appeal to the Tribunal and assailed the order of the Appellate Assistant Commissioner, inter alia, on the ground of its very maintainability. The Tribunal took the view that, on a proper consideration of the statutory provisions of the Act, the appeal to the Appellate Assistant Commissioner was maintainable.
5. Shri Vidyarthi, learned counsel appearing for the Department, has submitted that the view taken by this court in the case of Madhur Jalpan V/s. CIT [1983] 143 ITR 351, needs reconsideration because, according to him, an order passed under Sec. 184(7) of the Act refusing to condone the delay in filing the statutory declaration in Form No. 12 is not tantamount to an order under Sec. 185(3) of the Act and, therefore, no appeal can lie against such an order under Section 246 (j) of the Act. In support of his contention, learned counsel has relied upon the case decided by the Kerala High Court in the case of CIT V/s. Pushpaka Travels [1985] 152 ITR 717.
6. For a proper appreciation of the questions involved in the present case, it will be worthwhile to quote Clauses (c) and (j) of Sec. 246 of the Act, which read as under :
"246. Any assessee aggrieved by any of the following orders of an Income-tax Officer may appeal to the Appellate Assistant Commissioner against such order--...
(c) an order agains
