MUKUNCHAND BAID VS COMMISSIONER OF INCOME-TAX
1999 P T D 1577
[226 I T R 907]
[Madhya Pradesh High Court (India)]
Before A.K. Mathur, C.J. and S.K. Kulshrestha, J
MUKUNCHAND BAID
Versus
COMMISSIONER OF INCOME-TAX
M.C.C. No.69 of 1992, decided on 03/04/1996.
Income-tax---
----Firm---Renewal of registration---Belated filing of Form No. 12 alongwith return---In view of circular of C.B.D.T., dated 26-6-1965 renewal of registration to be allowed---Indian Income Tax Act, 1961, S.184(7).
For the assessment year 1982-83, the assessee, a partnership firm, filed Form No. 12, for renewal of its registration alongwith the return on March 31, 1983. The Income-tax Officer rejected the renewal application, being not satisfied with the assessee's explanation for the belated submission and completed the assessment accordingly. The Appellate Assistant Commissioner allowed the appeal of the assessee. The Tribunal maintained the order of the Income-tax Officer. On a reference:
Held, that according to the circular of the Central Board of Direct Taxes, dated June 26, 1965, if filing of the return of income is delayed and no ex parte assessment is made by the Income-tax Officer under section 144 of the Income Tax Act, 1961, the declaration in Form No. 12 filed alongwith the belated return would constitute sufficient compliance with the provisions of section 184(7) and renewal of registration could be granted. In view of the circular of the Central Board of Direct Taxes the renewal of registration was to be allowed.
A.S. Jha for the Assessee
Abhay Sapre for the Commissioner
JUDGMENT
This is an income-tax reference under section 256(1) of the Income Tax Act, 1961, at the instance of the assessee. The following question of law has been referred by the Tribunal for answer by this Court:
"On the facts and in the circumstances of the case, whether the Appellate Tribunal was right in holding that there was no sufficient compliance with the provisions of section 184(7) of the Income-tax Act for granting the renewal of registration particular; in view of the Board's Circular F. No.26/3/65-II(AI), dated June.26, 1965?"
The assessee is a partnership firm. The assessee was granted registration and it was renewed year after year. For the assessment year 1982-83, the assessee filed Form No. 12 for renewal of registration on March 31, 1983, along with the return. As there was a delay in filing Form No. 12, the Income-tax Officer rejected the renewal application. The reasons given by the assessee for the delay in presenting the application in Form No. 12 are that one of the trucks belonging to the assessee met with an accident in which three labourers were killed and the assessee was involved in the legal battle. However, this explanation did not satisfy the Income-tax Officer, who assessed the assessee at Rs.55,610. Aggrieved by the order of the Income-tax Officer, the assessee approached the Appellate Assistant Commissioner who allowed the appeal of the assessee. The Revenue filed a second appeal before the Tribunal and the Tribunal set aside the order of the Appellate Assistant Commissioner and maintained the order of the Income- tax Officer. Hence, the assessee made an application to the Tribunal for reference of the case to this Court. Accordingly, the aforesaid question has been referred by the Tribunal to this Court for its answer.
We have heard learned counsel for the parties and perused the record. In fact, in the question which has been referred above, the Tribunal has made a reference to the circular issued by the Central Board of Direct Taxes, dated June 26, 1965. This circular was not brought to the notice of the Tribunal at the time when the Revenue's appeal was being considered by the Tribunal. It seems that the circular was later on brought to the notice of the Tribunal and accordingly the Tribunal has referred the aforesaid question for answer by this Court.
The circular, dated June 26, 1965, reads as under
"Income Tax Act, 1961---Renewal of registration---Filing of declaration under section 184(7)---
A declaration under section 184(7) of the Income-tax Act for continuance of registration has to be furnished by a firm alongwith its return of total income. If the return of income is delayed and no ex parte assessment is made by the Income-tax Officer under section 144 of the Income-tax Act, the declaration filed alongwith the belated return would constitute sufficient compliance with the provisions of section 184(7).
??? (2)??? Section 185(2) of the Income-tax Act already provides that the Income-tax Officer shall, not reject an application for registration merely on the ground that the application is not in order but shall intimate the defect to the firm and give it an opportunity to rectify the defect within a period of one month from the date of such intimation. Although a specific provision to his effect has not been made in subsection (7) of section 184 in regard to declaration filed for continuance of registration, the Board are of the view that in consonance with the spirit of the provision in section 185(2), a declaration under section 184(7) should not be rejected merely on the ground that it is technically defective, the Income-tax Officers may, therefore, be instructed that the procedure under section 185(2) should also be followed with regard to defective declarations under section 184(7)."
As per this circular, it is apparent that belated filing of declaration in Form No. 12 under section 184(7) of the Act could be treated to be innocuous if that declaration is filed alongwith the belated return and the assessment has not been made ex parte under section 144 of the Act. In the present case, the return was filed by the assessee on March 31, 1983, though It was belated, alongwith the declaration in Form No. 12. Therefore, as per the circular, if any return has been filed alongwith the declaration and ex parte assessment has not been made by the Revenue, then, as per the circular, belated filing of the declaration under section 184(7) -will be deemed to be sufficient compliance with the provision. The circular was not brought to the notice of any of the authorities below. It. was brought to the notice of the Tribunal for the first time when the reference application was made before the Tribunal. Since the necessary foundation is already there and as per the circular, belated filing of declaration in Form No. 12 would not visit the assessee with any adverse affect as that would be deemed to be sufficient compliance with the provision. In this view of the matter, we answer the question in favour of the assessee and against the Revenue.
M.B.A./1987/FC?? ????????????????????????????????????????????????????????????????????????????? Order accordingly.