ORDER
Shri Satish Chandra, AM
1. The Appeals by the revenue arise out of the common order dated 29-12-1992 of the DCIT(Appeals), Bhopal, whereby he directed the Assessing Officer to allow registration to the firm for the assessment years 1986-87 and 1987-88.
2. Briefly stated, the assessee claimed that an application in Form No. 11 along with a deed of partnership in original was filed on 21-6-1985 seeking registration for the assessment year 1985-86. Since the assessee could not establish the filing of Form No. 11 with and deed of partnership as claimed, it filed Form No. 11 with deed of partnership on 23-5-1988 seeking registration for the assessment year 1985-86. The assessee’s claim was negatived for the reason that the application in Form No. 11 was not filed in time. The order became final, as the assessee did not go in appeal against the said order of refusal to grant registration. For the subsequent two years i.e. assessment years 1986-87 and 1987-88, the assessee had filed Form No. 12 claiming continuation of registration. These Forms were filed within time. Besides, the assessee filed application in Form No. 11 along with deed of partnership in original on 23-5-1988 seeking registration for the assessment years 1986-87 and 1987-88. The Assessing Officer passed order under section 185(1)(b) dated 23-3-1989, whereby he rejected the assessee’s claim of registration for both the years on the ground that the application in Form No. 11 dated 23-5-1988 is out of time and no reasons for delay have been given. Aggrieved thereby, the assessee appealed.
3. Before the DCIT(Appeals), it was contended that it was not known to the assessee that the firm will be treated as unregistered for the assessment year 1985-86 and, therefore, the assessee had filed application for continuation of registration in Form No. 12 on 13-6-1986 and 9-6-1987 for the assessment years 1986-87 and 1987-88 respectively which were in time. It was stated before the DCIT(Appeals) that if the firm was allowed registration for the assessment year 1985-86, there being no change in the constitution of the firm and/or shares of the partners, continuation of registration would have been allowed for the assessment years 1986-87 and 1987-88 automatically. It was also pleaded that the Assessing Officer has passed order refusing to grant registration for the assessment year 1985-86 on 23-3-1989 and since the assessee had filed Form No. 12 seeking continuation of registration within time for assessment year 1986-87, the assessee could seek registration for these two years by filing application in Form No. 11 within a period of one month from the date of order refusing grant of registration for the assessment year 1985-86 in terms of Board’s Circular No. 3P(XXV-22) of 1964 dated 29-7-1964. It was argued before the DCIT(Appeals) that the assessee had, however, filed Form No. 11 seeking grant of registration for the assessment years 1986-87 and 1987-88 on 23-5-1988. It was also argued before him that the Assessing Officer has not cast any doubt on the genuineness of the firm and, therefore, when the assessee had filed Form No. 11 seeking grant of registration for the assessment years 1986-87 and 1987-88 within the time stipulated in the above circular of the Board, the Assessing Officer ought to have granted registration to the firm for these two assessment years. Request was made for issuing necessary direction to the Assessing Officer in the matter. The DCIT(Appeals) considered the submissions of the assessee. According to him, the registration was refused to the assessee for the assessment year 1985-86 for the reason that application in Form No. 11 was not filed within time. He observed that the assessee had bona fide belief that the firm will be granted registration for the assessment year 1985-86 and it was for this reason that the assessee had filed Form No. 12 in time seeking continuation of registration for the assessment years 1986-87 and 1987-88. The DCIT(Appeals) further observed that the Assessing Officer had passed the order treating the firm as unregistered, for the assessment year 1985-86 on 23-3-1989 when the assessee had on its own filed application in Form No. 11 seeking fresh registration for the assessment years 1986-87 and 1987-88 on 23-5-1988. On perusal of the impugned orders, the DCIT(Appeals) found that the genuineness of the firm was not doubted. Since the assessee had filed Form No. 11 seeking fresh registration for the assessment years 1986-87 and 1987-88 within time as stipulated in Board’s Circular dated 29-7-1964, he directed the Assessing Officer to grant registration to the assessee-firm for these two assessment years. The revenue is aggrieved.
4. The ld. D.R. submitted that the fresh registration by filing Form No. 11 was not sought within time as stipulated in sub-section (4) of section 184 and no application seeking condonation of delay was filed before the Assessing Officer. He further argued that the question of giving one month’s time to the assessee to the file fresh application for registration as stipulated in the Board’s Circular dated 29-7-1964 did not arise, as the assessee had already filed application for registration for the assessment years 1986-87 and 1987-88, even before the firm was refused registration for the assessment year 1985-86. He, therefore, submitted that the order of the DCIT(Appeals) be set aside. The ld. counsel for the assessee, on the other hand, submitted that the assessee was fully aware that its application for registration for the assessment year 1985-86 was delayed and, therefore, there was likelihood of refusal by the Assessing Officer to grant registration for the assessment year 1985-86. Anticipating the same, the assessee had filed fresh application in Form No. 11 seeking registration for the assessment years 1986-87 and 1987-88, even prior to the order rejecting the claim for registration under section 185 passed by the Assessing Officer. He vehemently argued that the revenue has never doubted the genuineness of the firm and the Form No. 12 for the assessment years 1986-87 and 1987-88 had been filed in time. He, therefore, urged that the case of the assessee is covered by the spirit of the circular of the Board dated 29-7-1964 and, therefore, the DCIT(Appeals) was perfectly justified in giving the impugned direction.
5. We have considered the facts of the assessee’s case as also the submissions made by the ld. representatives of the parties. We have minutely gone through the Board’s Circular dated 29-7-1964. In our opinion, the object of the said Circular is that when an application for registration filed by a firm remains pending before the revenue authorities, and, in view of its pendency the firm files a declaration for the continuation of the registration under section 184(7) for the subsequent assessment year and the registration for the earlier year is refused later on, the firm should not suffer and it should be allowed to substitute the declaration filed by it for the subsequent assessment year by an application for the registration of the firm. The Assessing Officer should instead of rejecting the declaration as incompetent allow the partners of the firm an opportunity for filing an application for registration within one month provided the declaration for the continuation of registration for that year was filed in time. We find that in the case of Jagdish Ram Shankar Dass v. CIT [1981] 128 ITR 511/5 Taxman 80 their Lordships of Punjab & Haryana High Court have held that the filing of a declaration in time is a condition precedent for giving concession as envisaged in the said Circular of the Board. In the instant case, it is an admitted position that during the pendency of the assessee’s application for grant of registration for the assessment year 1985-86, the assessee had filed declaration in Form No. 12 in time for the assessment years 1986-87 and 1987-88. Not only this without waiting the notice of opportunity to be given by the Assessing Officer for filing fresh applications in Form No. 11 for the assessment years 1986-87 and 1987-88, the assessee suo motu submitted such applications before even the only for the refusal of grant of registration for the assessment year 1985-86 was passed by the Assessing Officer. This conduct of the assessee cannot put him to disadvantageous position as argued by the ld. D.R. as in any case, the assessee would have filed applications in Form No. 11 for the assessment years 1986-87 and 1987-88 availing the opportunity to be eventually allowed by the Assessing Officer after the Assessing Officer had refused registration for the preceding assessment year 1985-86. In our considered opinion, in a situation envisaged in the Board’s circular dated 29-7-1964, absence of application seeking condonation of delay cannot be so fatal as to deny the benefit or registration of other essential conditions therefore stand fulfilled.
6. The finding of the DCIT(Appeals) that no doubt has been cast on the genuineness of the firm could not be assailed by the revenue. We, therefore, find no infirmity in the impugned direction of the DCIT(Appeals) and accordingly, we, reject the revenue’s appeals as without any merit.
7. In the result, both the appeals stand dismissed.