JUDGMENT
1. These are two references under Section 256(1) of the Income-tax Act, 1961 (hereinafter to be referred to as “the Act”). In these references, we are concerned with the assessment year 1971-72.
2. The assessee is a partnership firm. For the assessment year 1971-72, it applied for continuation of registration in Form No. 12 along with the return for the assessment year 1971-72. The return and the application for continuation of registration were filed on December 3, 1971. In terms of Section 139(1)/ 139(2) of the Act, the assessee had to file the declaration in Form Xo. 12 for continuation of registration by September 30, 1971. The assessee contended before the Income-tax Officer that it had sent an application in Form No. 6 by registered post which had been acknowledged by his office on October 4, 1971. No application, however, was available in the office nor was any evidence adduced in regard to the contents of the application. It is not in controversy that no order extending the time for filing the return was passed by the Income-tax Officer. The Income-tax Officer, therefore, rejected the application for registration.
3. The assessee, being aggrieved by the order of the Income-tax Officer rejecting the prayer for continuation of registration of the partnership firm, appealed to the Appellate Assistant Commissioner. The Appellate Assistant Commissioner accepted the stand of the assessee and directed the Income-tax Officer to allow continuance of registration to the firm. The Appellate Assistant Commissioner was of the view that since the application in Form No. 12 had been filed within the extended period for submission of return till December 31, 1971, the application of the assessee for continuance of registration could not be rejected. This view of his was
based upon the fact that the assessee had produced the acknowledgment by registered post dated October 4, 1971. The assessee’s claim having been accepted, the Revenue filed an appeal before the Income-tax Appellate Tribunal which was numbered as I.T.A. No. 446 (Pat) of 1975-76. The Tribunal observed that there could be no doubt that the application in Form No. 6 was sent by the assessee to the Income-tax Officer and once it was found that the application for extension of time had been made, the assessee was justified in being of the view that time had been extended as prayed for by the assessee. Thereafter, the Revenue filed an application under Section 154 of the Act for rectification of his order, inasmuch as the application for extension not having been filed by September 30, 1971, the assessee could not claim the benefit of extension of time. The Tribunal rejected this application. The order on this application was treated as a miscellaneous order. The Revenue, having lost on the question in regard to the registration of the firm, filed an application under Section 256(1) of the Act. Hence the present reference before us.
4. The questions referred to us for our opinion are the following :
“1. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the appeal by the assessee was properly entertained by the Appellate Assistant Commissioner ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in allowing continuation of registration to the firm ? ”
5. The first question relates to the maintainability of the appeal by the assessee before the Appellate Assistant Commissioner. In our view, the Tribunal was correct in holding that the appeal by the assessee was properly entertained by the Appellate Assistant Commissioner. This view of ours is concluded by a Bench decision of this court in the case of CIT v. Gyanchand Bedi [1986J 163 ITR 693, where it was held that an order refusing registration is appealable on the basis that it affects the status of the assessee. We see no reason to differ from the view taken in the aforesaid decision to which one of us (Uday Sinha J.) was a party.
6. The next question is in regard to the justification for allowing continuation of registration to the firm. The record clearly shows that the return had to be filed by September 30, 1971. It is not in controversy that the application for registration had to be filed by that date. The stand of the assessee, which has found favour with the Tribunal, is that the application for extension of time having reached the Income-tax Officer, the time for filing return must be deemed to have been extended. The stand of the Tribunal was clearly fallacious. If a statute prescribes a time-limit for taking any action, the action must be taken within that time. Any
prayer for extending that time must be made before the statutory period lapses. In this case, the application for extension of time had to be filed by September 30, 1971. Any application filed later did not require any consideration. In this case, there is nothing to show when the application of the assessee was put in the course of transmission. The case of the assessee was that he had sent it by registered post. The assessee is located in the town of Jamshedpur. The Income-tax Officer was also at Jamshedpur. It is somewhat difficult to appreciate why the application was sent by post and not through a lawyer or hand to hand. Be that as it may, the certificate of posting which is the first step in the course of putting a communication in the course of transmission was never filed. The application for extension of time is nowhere on the record. This was brought to the notice of the assessee even before the Income-tax Officer. The assessee did not file a copy of the application for extension of time. Thus, there was nothing before the Appellate Assistant Commissioner or the Tribunal to show what was the reasonable cause for granting extension of time. Grant of extension of time cannot be assumed. The statute enjoins on the taxing officer to pass an order on an application for extension of time. No assessee is entitled to assume that the Income-tax Officer is bound to accept the prayer. In that view of the matter, the assessee had no reason to think that the prayer made by him for extending the time till December 31, 1971, had been granted. The Tribunal was completely in error in assuming that the assessee may have been under the impression that time has been granted. The Tribunal observed that once the application was made by the assessee for extension of time, it was the duty of the Income-tax Officer to have either rejected the request for extension of time or to grant the same and if no order was passed by the Income-tax Officer for one reason or the other, the assessee could not be blamed. We regret, the stand of the Tribunal was erroneous in law. It was obligatory upon the assessee to have filed the application for extension of time before September 30, 1971. That is the view which a Bench of this court took in the case of CIT v. S.P. Viz Construction Company (Taxation Case No. 232 of 1976 disposed of on December 12, 1985–[1987] 165 ITR 732). Thus, we find that neither an application for extension of time was filed in time nor was anything brought on record to show that there was reasonable cause for not filing the application within time. In that view of the matter, it is obvious that the Appellate Assistant Commissioner and the Tribunal were not justified in allowing continuation of registration to the firm. True, registration confers certain benefits upon a firm. It has, however, to be acquired in accordance with the dictates of the law. The command of the law is that an application for registration must be filed by the last date for filing the
return. That not having been done, the benefit of registration could not have been continued. In our view, therefore, on the facts and in the circumstances of the case, the Tribunal was not justified in allowing continuation of registration to the firm.
7. For the reasons stated above, the answer to the first question is that the appeal was rightly entertained by the Appellate Assistant Commissioner. The answer to the second question is that the Tribunal was not right in allowing continuation of registration to the firm. The first question is thus answered in favour of the assessee and the second question in favour of the Revenue. Since no one has appeared on behalf of the assessee, the references are answered without costs.
8. Let a copy of this judgment be transmitted to the Assistant Registrar, Income-tax Appellate Tribunal, Patna, in terms of Section 260 of the Act.