SETHURAMAN J.

The following question has been referred under s . 256(1) of the I.T. Act

"Whether the Tribunal was right in holding that the assessee-firm was not entitled to continuation of registration for the assessment year 1970-71 ?" *

The assessee is a firm consisting of four partners, viz., 1. Papanasa Nadar, 2 Paulraj Nadar, 3. Annamalai Nadar, and 4. Sundaraswamy. The shares of each of these partners differed and it is not material for our present purpose. The assessee filed a declaration in Form No. 12 for continuance of registration. This declaration was signed by the legal representative of the first partner, namely, Papanasa Nadar, who died, and by Paulraj and Annamalai. Sundaraswamy, the fourth partner, did not append his signature to the form. This form was filed on January 7, 1971, before the ITO

By the end of December, 1972, the ITO by a letter dated December 11, 1972, pointed out that the declaration was defective and he afforded an opportunity to the assessee under s. 185(3) of the Act to rectify the defect and resubmit the form duly signed by all the partners of the firm within a period of one month. He pointed out also that if this defect was not rectified within the time, the registration granted to the firm for the earlier year would not continue for the assessment year 1970-71

The declaration should have been received in the office of the ITO on or before January 12, 1973. It was, however, received only on January 22, 1973. The ITO passed an order under s. 185(3) stating that as the defect was not rectified within the period of one month, the registration granted to the firm could not enure for the assessment year 1970-71. On appeal, the AAC, relying on Circular No. 105, dated 23rd February, 1973, issued by the CBDT, held that the short delay in filing the declaration should be condoned, and he, therefore, directed continuation of registrationThe Department appealed to the Tribunal which held that s. 185(3) clearly applied to the case, and that since the defect was not rectified within the stipulated period of one month, the, ITO had no option but to pass an order in writing declaring that the registration granted would not have effect for the assessment year 1970-71. In the result, it allowed the appeal filed by the ITO. Feeling aggrieved by this order of the Tribunal, the assessee has brought this matter on reference to this court

Section 184 prescribes the procedure for registration. An application for registration of the firm has to be made to the ITO either during its existence or after its dissolution. The application has to be signed by all the partners (not being minors) personally and in the case of a dissolved firm, by all persons (not being minors) who were partners in the firm immediately before its dissolution and by the legal representative of any such partner who is deceased. The application has to be in the prescribed form and has to contain the prescribed particulars. Section 184(7) provides that where registration is granted to any firm for any assessment year it shall have effect for every subsequent assessment year provided (i) that there is no change in the constitution of the firm or in the shares of the partners as evidenced by the instrument of partnership on the basis of which the registration was granted, and (ii) that the firm furnishes before the expiry of the time allowed under sub-s. (1) or (2) of s. 139 or before any extended period for furnishing the return of income of the firm, a declaration to the effect that there was no change in the constitution of the firm or the shares of the partners. Where the ITO was satisfied that the firm was prevented by sufficient cause from furnishing the declaration within the time so allowed he may allow the firm to furnish the declaration at any time before the assessment is made (s. 184(7)). It may be seen that s. 184(7) applies to those cases where the form is filed for the first time. Section 185 details the procedure on receip