The provisions of the Income-tax Act, 1961, relating to registration of firms, renewal of registration, and condonation of delay in filing application for registration.

M.R.Sharma, J.

1. The firm known as Messrs. Jupiter Foundry and Machines (Knives), Amritsar (hereinafter referred to as "the assessee"), was constituted under a partnership deed dated September 29, 1964, with four partners, namely, Shri Surinder Singh, Shri Joginder Singh, Shri Gurbachan Singh and Shri Manmohan Singh. On December 27, 1966, Shri Surinder Singh retired and the firm was dissolved. The dissolution deed dated December 28, 1966, shows that the accounts were settled and the remaining partners took over the business including the assets and liabilities of the partnership firm. In other words, they continued to carry on the same business in the same name and style under a new partnership deed of the same date.

2. On September 30, 1967, the assessee-firm as constituted on December 28, 1966, filed a consolidated return showing the income for two periods, that is, from April 1, 1966, to December 27, 1966, and from December 28, 1966, to March 31, 1967. The assessee also filed a declaration in Form No. 12 for continuance of the registration under Section 184(7) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for the assessment year 1967-68, relevant to the accounting period ending on March 31, 1967. The declaration form was signed by all the three partners and the same was accompanied by a note as follows :

"Although with the change in the constitution, an application for registration has been filed, yet out of abundant precaution, declaration in Form No. 12 is also filed."

3. The Income-tax Officer found that the assessee-firm had not filed an application for registration before the expiry of the relevant accounting period ending on March 31, 1967. Much later, that is, on December 1, 1970, the assessee filed an application for registration in Form No. 11 along with the partnership deed dated December 28, 1966, with a forwarding letter in which it was contended that since there was no change in the constitution of the firm up to the date of the retirement of Shri Surinder Singh on December 27, 1966, the declaration in Form No. 12 for continuation of registration was filed along with the return of income for the period from April 1, 1966, to December 27, 1966, and that the application in Form No. 11 for the registration of the firm could not be filed before March 31, 1967, due to the confusion and misunderstanding created by the prolonged illness and death of its income-tax adviser, Shri A. C. Kher.

4. In the course of assessment proceedings before the Income-tax Officer, the assessee submitted as follows:

(1) That since the original firm with four partners had been dissolved on December 28, 1966, it was a case of succession and not of change in the constitution of the firm and so two assessments under Section 188 of the Act instead of one assessment under Section 187 of the Act should be framed.

(2) That, in any case, renewal of registration should be granted to the firm for the period commencing from April 1, 1966, and ending on December 27, 1966, under Section 184(7) of the Act.

(3) That there was sufficient cause for condonation of delay in filing the application for registration and registration should be granted to the assessee-firm for the period commencing from December 28, 1966, and ending on March 31, 1967.

(4) That since the assessment of one of the partners, namely, Shri Man-mohan Singh, had already been completed, the registration could not be refused in view of the decision rendered by their Lordships of the Supreme Court reported as Commissioner of Income-tax v. Murlidhar Jhawar and Puma Ginning and Pressing Factory [1966] 60 ITR 95 (SC).

5. The Income-tax Officer rejected all the four contentions raised on behalf of the assessee. He held that since the case of the assessee was covered under Section 187 of the Act, Section 188 did not apply and only one assessment need be framed. He also held that since there was only a change in the constitution of the firm, renewal of registration