JUDGMENT
N.J. Pandya, J.
1. At the instance of the assessee, the Tribunal, Ahmedabad Bench has referred the following three questions to this Court for the decision under s. 256 of the IT Act, 1961 :
“1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the ITO was empowered to accept a belated application on submission of cause being shown only in the case when such application along with deed of partnership is filed within the end of the previous year in question ?
2. Whether the Tribunal was justified in law in interpreting the provisions of ss. 184(3), 184(4) and 184(5) and on arriving at the finding that the assessee was not entitled to get the delay condoned it having filed application in Form No. 11A on 30th July, 1977 with a new deed of partnership executed on 19th May, 1977 though made effective since 3rd March, 1977, both the dates falling beyond the end of the previous year which ended on 31st March, 1977 ?
3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the delay in drawing up document of partnership was not contemplated by provisions of s. 184(4) of the Act and whether it was justified in law in confirming the order of refusal of registration to the assessee-firm ?”
2. The assessee is M/s Sanjay Construction Co., a partnership firm registered under the Indian Partnership Act as well as the IT Act. The first partnership deed had taken place on 19th July, 1975 and the said partnership deed contained the following clause :
“The partnership business shall not come to an end by death or insolvency of any partner but the partnership firm shall continue the heir of such partner. If he (heir) so desires shall be taken as partner in the firm in the same proportion to his/her (deceased/insolvent partner’s) respective share.”
One of the partners of the said partnership Shri Mafatlal expired on 2nd March, 1977. His widow was the only heir left behind him and the remaining partners and the said widow executed a fresh partnership deed on 19th May, 1977 and thereafter, they applied to the ITO on 30th July, 1977 in Form No. 11 and application for condonation of delay under s. 184(4) of the IT Act, 1961, was also filed. The claim of the assessee was that the deceased partner has left behind him only a widow and as per the custom of the community, the widow was not meeting anybody or doing anything for nearly 3 months after the death of the deceased and consequently, the deed of partnership could not be executed prior to 19th May, 1977 and as per the provisions of sub-s. (5) of s. 184, the deed of partnership must be accompanied by the application in Form No. 11A as there was delay on their part to file the said application.
3. The ITO came to the conclusion that, as the asst. yr. 1977-78 has come to an end on 31st March, 1977 and as the partnership in question has taken place on 19th May, 1977 and the application in Form No 11A is filed on 30th July, 1977, the said application could not be allowed for the registration of the firm in the asst. yr. 1977-78. According to him, the new partnership deed ought to have come into existence prior to 31st March, 1977 and only in case the partnership had taken place prior to 31st March, 1977, there was a question of condoning the delay. Being aggrieved by the said decision of the ITO, the assessee went in appeal before the AAC, Surat by way of Appeal No. SC/IG-3/80-81 and it was dismissed by the said appellate authority by order dt. 4th Nov., 1980 and confirmed the view taken by the ITO. Thereupon, the assessee went before the Tribunal by way of ITR 2388/Ahd-80 and unfortunately for the assessee, the Tribunal also took the same view and concurred with the finding recorded by the two authorities below. Hence, at the instance of the assessee, this reference has come before us.
4. We have already quoted above the term of the original deed of partnership dt. 19th July, 1975 executed by the original partners of the assessee-firm which clearly mentions that the partnership business would not come to an end on account of death of any of the partners. The new partnership deed executed by the partners of the original partnership deed and the widow of Mafatlal Shah contains inter alia, the following contents :
“Widow Babuben Mafatlal Shah, an adult Jain, working and residing at Surat (hereinafter referred to as the party of the Sixthpart).”
If these contents of the new partnership deed in question are read along with the contents of the original partnership deed namely that the partnership business shall not come to an end by the death of a partner and the partnership firm shall continue by the heir of such partner, then there is no difficulty in coming to the conclusion that the partnership business was continued even though the death of one of the partners had taken place. In the circumstances, there could not be any doubt regarding the genuineness or the existence of the partnership in question and this position is accepted by the Tribunal by making the following observations in para 4 of its judgment :
“There is no dispute about the genuineness of the firm but the dispute centres round, as pointed out earlier, the question whether the delay in filing the application in Form No. 11 and 11A could be condoned on the facts of the case.”
Therefore, there is no dispute about the genuineness of the firm and the only question to be considered is as to whether the delay in filing the application for registration of the firm was to be condoned in the circumstances of the case or not ?
5. We have carefully gone through the orders passed by the Tribunal as well as the two authorities below, but we are unable to find that the claim of the assessee that the widow of the deceased partner on account of the community custom was confining herself and was not talking with anybody for 3 months is rejected by any of them for any reasons stated in the order. They have not at all considered the claim of the assessee for the reasonable cause for condoning the delay caused in filing the application. They have concentrated only on the question as to whether the delay could be condoned in view of the fact that the deed of partnership has come into existence after the end of the assessment year and the application in Form No. 11 and the delay condonation application in Form No. 11A were filed after the end of the assessment year.
6. The apex Court in the case of Collector, Land Acquisition & Anr. vs. Mst. Katiji & Ors. AIR 1987 SC 1353 has considered the question of condonation of delay under the provisions of s. 5 of the Limitation Act, 1963. In that case, it has been laid down by the apex Court that the Court should adopt liberal approach and while laying down so, their Lordships have made the following observations :
“When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.”
There is no presumption that delay is occasioned deliberately on account of culpable negligence or on account of mala fide. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk.
7. It must be grasped that judiciary is respected not on account of its power to legalise injustice on technical grounds, but because it is capable of removing injustice and is expected to do so. If the above principles laid down by the apex Court are taken into consideration, then it was incumbent on the authorities below to consider the claim made by the assessee for condoning the delay and they ought not to have gone on mere technicality that the deed of partnership as well as the application for registration and application for delay condonation were filed after the assessment year had come to an end. If the provisions of s. 184 are read as a whole, it would be clear that under that section, the IT authority is entitled to give registration of a partnership firm even after its dissolution. Neither s. 184 nor any other section of the IT Act prevents a partnership deed being executed which would come into force from the date or prior to the date of deed. Section 184(4) and its proviso read as under :
“184(4) : The application shall be made before the end of the previous year for the assessment year in respect of which registration is sought :
Provided that the ITO may entertain an application made after the end of the previous year, if he is satisfied that the firm was prevented by sufficient cause from making the application before the end of the previous year.”
If the above provision and particularly the proviso to s. 184(4) is considered, then it would be quite clear that the ITO can allow an application for registration of the firm even from the date of the end of the previous assessment year if sufficient reasons are shown to him. It is pertinent to note that neither the ITO nor the AAC nor the Tribunal has recorded a finding of fact that there was no sufficient ground for condoning the delay in filing the application in question.
8. Learned advocate Mr. Bhatt appearing for the Revenue has placed reliance in the case of Ramamohan Motor Service vs. CIT (1979) 120 ITR 434 (AP) 9 to justify the orders passed by the IT authorities and the same authority was relied on by the Tribunal in its judgment. But if the facts of the case before us and the facts of the case before the Andhra Pradesh High Court are taken into consideration, it would be quite clear that the said case has no bearing on the facts before us. In that case, the partnership was executed in the year 1955 and the said partnership had come to an end on 31st Dec., 1961 and thereafter the new partnership took place on 20th June, 1962 and on 30th June, 1962, the applications in Form No. 11 and 11A were filed. In that case, it was found that the original partnership was invalid partnership from 31st Dec., 1961 till the new partnership took place on 20th June, 1962. It was also found that even in the new partnership a minor was taken as a partner and it was also an invalid partnership. In that case, sufficient cause for condoning the delay was not made out by the assessee. In the circumstances, in that case, the claim of the assessee was rejected. But none of those facts are existing in the instant case.
9. From the material on record, it is quite clear that the partnership deed in question could not be executed on account of the peculiar circumstances namely that the widow who became the partner of the firm had confined herself to solitude on account of death of her husband and she was not talking and meeting anybody and as the death of her husband had taken place only on 2nd March, 1977, the new partnership could not be executed before the end of the previous year, i.e., on or before 31st March, 1977. Therefore, there was reasonable cause for non-execution of the partnership deed and consequently there was sufficient cause for condoning the delay caused in preferring application under s. 184(4) as well as 184(5) of the IT Act. We are, therefore, of the opinion that the Tribunal as well as the authority below them were not justified in rejecting the claim of the assessee. We, therefore, answer questions Nos. 1, 2 and 3 in the negative and in favour of the assessee and against the Revenue. The parties are directed to bear their own costs.