A declaration for renewal of registration of a firm filed after the assessment order has been passed cannot be considered by the ITO for continuing the registration granted to the firm in the earlier year.

C.S.P. Singh, J.

1. THE Income-tax Appellate Tribunal, Delhi Bench ' C ', has referred the following four questions for opinion of this court :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in entertaining the appeal against an order of refusal to the registration of the firm on the basis of an order made in the assessment order itself though no separate order as such was made separately ?

2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in directing the Income-tax Officer to take cognizance of the declaration for renewal of registration filed in Form No. 12 along with the return on March 27, 1973, a date falling after the completion of the assessment order (March 16, 1973) but prior to the service of the notice of demand on March 30, 1973, after considering the question on condonation of the delay in regard to the same ?

3. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in holding that in such a case, the Income-tax Officer should have given an opportunity to the assessee before cancellation of registration under Section 185(5) ?

4. Whether, on the facts and in the circumstances of the case, the Tribunal was right in setting aside the order of the Income-tax Officer determining the status of the assessee as an unregistered firm and directing him to consider the matter regarding registration afresh after giving the assessee full opportunity of being heard ?"

2. THE reference relates to the assessment year 1970-71. A notice under Section 139(2) of the IT. Act, 1961 (hereinafter referred to as " the Act "), was issued and served on the assessee on November 28, 1970. Subsequently, notices under Section 142(1) were also issued from time to time but the assessee did not put in appearance and as a result an assessment was made under Section 144 on the 16th March, 1973. THE notice of demand was, however, served on 30th of March, 1973. Before the notice of demand could be served the assessee filed a return along with a declaration for renewal of the registration of the firm in Form No. 12 on the 27th of March, 1973.

No order was passed on this, as the assessment had already been made on the 16th March, 1973, and while passing the assessment order the ITO had taken the status of the firm as of an unregistered firm because by that time no declaration under Section 184(7) of the Act had been filed. On appeal, the order passed by the ITO was confirmed. Three appeals were filed before the Tribunal, one arising out of the order under Section 144, the other under Section 146 and the third under Section 186. We are, in the present reference, concerned with the order passed under Section 186. The Tribunal has allowed the appeal on the view that the ITO had failed to apply his mind to the application for renewal of registration and has not granted any opportunity to the assessee before cancelling the registration and treating the firm as an unregistered firm.

3. AS regards the maintainability of the appeal under Section 186, the Tribunal held that even though the order cancelling the registration merged in the assessment order yet the appeal filed by the assessee was maintainable.

4. WE shall deal with the questions referred seriatim. In so far as the first question is concerned a Division Bench of this court in the case of CIT v. Vinod Krishna Som Prakash [1979] 117 ITR 594 has held that an appeal; in these circumstances was maintainable even though the order cancelling the registration was incorporated in the assessment order itself. The answer to this question must, therefore, be in the affirmative and the view of the Tribunal is upheld.

So far as the 2nd, 3rd and 4th questions are concerned, they are interconnected and as such all of them should be dealt with together. In order to resolve the controversy a reference to Section 184(7), as it stood in the relevant assessment year, is necessary.

"184. (7) Where registration is g