K.A. THANIKKACHALAM, J.

In pursuance of the order of this court dated October 27, 1981, the Tribunal referred the following question of law for the opinion of this court under section 256(2) of the Income-tax Act, 1961.

"Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in directing the Income-tax Officer to grant continuation of registration, even though Form No. 12 was not really signed by all the partners?"

The assessee-firm was constituted originally under a deed of partnership dated January 1, 1964, and was reconstituted as per the deed dated August 16, 1973. The assessee-firm consisted of three partners, viz., (1) Shri Chidambarathanu, (2) Smt. J. Parvathy, and (3) Shri C. Sivarajan. Partners Nos. 2 and 3 are the daughter and son of the first partner. This firm was granted registration in prior years. For the assessment year 1977-78 corresponding to the previous year ended August 15, 1976, an application for continuation of registration was filed on June 30, 1977, in Form No. 12. It was not signed by all the three partners. Since the partner, Shri Chidambarathanu, died on March 17, 1977, his widow, Smt. Rajammal, had signed the declaration as his legal heir. Partner No. 2, Smt. J. Parvathy, had also signed the declaration. But the third partner, Shri C. Sivarajan, had not signed it since his whereabouts were not known and he was absconding. Smt. Parvathy, had, therefore, signed the declaration on his behalf also. On enquiry, the Income-tax Officer was satisfied that Chidambarathanu had died and that Sri Sivarajan, was not to be found. He held that the declaration in Form No. 12 was not in order since it was not signed by the three partners and, therefore, registration could not be continued. On appeal, the Appellate Assistant Commissioner accepted the declaration and directed the continuance of the registration. Aggrieved, the Revenue filed an appeal before the Tribunal. The Appellate Tribunal found that the firm had been dissolved at the close of the accounting year ended August 15, 1976, and the business was continued as a proprietary concern of Chidambarathanu till his death. The Appellate Tribunal also found that since the declaration was to be filed after the close of the accounting year, after the dissolution of the firm only the partners that were available on that date of declaration, namely, June 30, 1977, could possibly sign the declaration. Since it was not disputed that by that date Chidambarathanu had died and Sivarajan could not be traced, the Appellate Tribunal found that the Revenue was insisting on an impossible condition since the rules only required that the declaration should be given by the partners, obviously referring only to the existing partnersThe Appellate Tribunal confirmed the order of the Appellate Assistant Commissioner following the decision reported in Addl. CIT v. S. V. Ratnaswamy and Sons1977 (106) ITR 154, 1975 (40) TAXATION 40.

Learned junior standing counsel for the Department submitted that it is not correct on the part of the Tribunal to state that declaration signed by the existing partners as on the date of filing Form No. 12 would be sufficient to comply with the provisions for getting renewal of registration under section 184(7) of the Act. According to learned standing counsel, as per the provisions of rule 22(5), all the partners should sign Form No. 12 for seeking continuation of registration. Learned standing counsel pointed out that the erstwhile firm consisted of three partners. One of the partners, Shri Chidambarathanu, died on March 17, 1977, and his widow, Smt. Rajammal, had signed the declaration as his legal heir. The second partner, Smt. Parvathy, signed the declaration in favour of herself and also for her brother who is said to be absconding. Therefore, according to the learned standing counsel, Form No. 12 was not signed by all the partners of the erstwhile firm. Learned standing counsel pointed out that