Satish Chandra, C.J.

1. THE assessee is a partnership firm. For the assessment year 1965-66, it, on 3rd August, 1965, filed a return showing an income of Rs. 28,918. On 5th February, 1970, the ITO noticed that the said return was not accompanied by the declaration under Section 184(7) of the I.T. Act, 1961, and that there has been no change in the constitution of the firm or the shares of its partners. He issued a notice to the assessee calling upon it to show cause why the firm may not be assessed as an association of persons. In reply, the firm filed a fresh return showing the same amount as income, and with the said return it filed a declaration in Form No. 12 under Section 184(7) of the Act.

2. THE ITO refused renewal of registration on the ground that the firm had not been granted continuation of registration in the last two preceding years, and the declaration in Form No. 12 ought to have been filed along with the return. He assessed the firm in the status of an association of persons.

On appeal, the AAC held that the return which was filed on 6th March, 1970, was not a valid one. It could not be treated as a revised return, because it had not been filed due to discovery of any omission or wrong statement in the original return. The declaration in Form No. 12 ought to have been filed along with the return filed on 3rd August, 1965, as is expressly required by Section 184(7). The assessment in the status of an association of persons was upheld.

3. THE assessee took up the matter to the Tribunal. The Tribunal observed that the assessee-firm had been granted registration for the two previous years. Since the declaration in Form No. 12 was filed before the assessment order was passed, it was in order, and the assessee was entitled to continuation of registration. The Tribunal, therefore, sent the case back to the ITO for doing the needful, after the assessee had, within a month, complied with the terms of Section 185(2) of the Act.

4. AT the instance of the CIT, the Tribunal has referred the following questions of law for our opinion :

"(1) Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in directing the Income-tax Officer to allow continuation of registration after asking the assessee to comply with the terms of Section 185(2) of the Income-tax Act, 1961 ?

(2) Whether, on the facts and circumstances of the case, the assessee is entitled to the benefit of continuation of registration under Section 184(7) of the Income-tax Act, 1961 ?"

Section 184 of the Act deals with registration as also with the registration having effect for subsequent years. Sub-section (7) of Section 184 says that where registration is granted to any firm for any assessment year, it shall have effect for every subsequent year, and the proviso thereto states that-

(i) there is no change in the constitution of the firm or the shares of the partners as evidenced by the instrument of partnership on the basis of which registration was granted ;

(ii) the firm furnishes, along with its return of income for the assessment year concerned, a declaration to that effect in the prescribed form and verified in the prescribed manner.

5. SUB-section (8) of Section 184 requires that where any such change has taken place, the firm shall apply for fresh registration.

6. UNDER Sub-section (2) of Section 185, the ITO cannot reject an application merely on the ground that there are some defects in it. He is to give the firm an opportunity to rectify the defects.

The question is whether the phrase "the firm furnishes, along with its return of income......a declaration to that effect" occurring in Clause(ii) of the proviso to Section 184(7) of the Act is mandatory in nature, so that if there is even a single day's difference in the filing of the two things, the ITO is bound to refuse registration.

7. SECTION 186(2) authorises the ITO to cancel the registration of a firm where renewal of registration has been granted under Section