Patna High Court
Commissioner Of Income-Tax vs B.L. Agarwalla on 29 October, 1990
Equivalent citations: [1991]190ITR256(PATNA)
JUDGMENT G.C. Bharuka, J.
1. The following two questions have been referred to this court for its opinion under Section 256(1) of the Income-tax Act, 1961 (hereinafter to be referred to as "the Act") :
"(1) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that an appeal lies against an order of the Income-tax Officer refusing continuation of registration under Section 184 of the Income-tax Act, 1961, before the Appellate Assistant Commissioner and so the appeal before the Appellate Tribunal was competent ?
(2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the assessee-firm is entitled to continuation of registration for the assessment year 1972-73 ?"
2. The facts leading to the present reference as they appear from the statement of the case are being stated hereinafter.
3. In this case, the assessee is a firm. It filed its return of income on June 23, 1972. The dispute relates to the assessment year 1972-73. The assessee-firm was granted registration for the earlier year. For seeking continuation of registration under Section 184(7) of the Act, the firm was required to file a declaration in Form No. 12 by June 30, 1972. But no such declaration was filed. The Income-tax Officer asked the assessee to show cause as to why renewal of registration should not be disallowed. The assessee filed its reply on March 25, 1974, asserting that it had filed the statutory declaration in Form No. 12 along with the return and that the same might have been missing from the record due to some reason or the other. The assessee, however, could not produce any evidence in support of the assertion that the declaration was filed in time. Alternatively, the assessee prayed for extension of the date for filing the declaration in Form No. 12 afresh. The assessee filed a fresh declaration in Form No. 12 on March 14, 1974. But the Income-tax Officer held that since the assessee has failed to prove sufficient cause for the delay in filing the said declaration, he refused to accept the same. Thus, the assessee was denied continuation of registration for the assessment year in question and thereby subjecting it to an assessment in the status of an unregistered firm.
4. Having lost in the appeal before the Appellate Assistant Commissioner, the assessee preferred a second appeal to the Tribunal. Before the Tribunal, the Department raised a preliminary objection with regard to the maintainability of the appeal itself on the ground that, against an order under Section 184(7) of the Act, no appeal can lie before the Appellate Assistant Commissioner and, as such, the appeal before the Tribunal was also incompetent. The Tribunal, on a consideration of the relevant statutory provisions and the decisions of the various High Courts, took the view that, under the circumstances, the appeal preferred by the assessee before the Appellate Assistant Commissioner as also before the Tribunal was maintainable.
5. Coming to the merits of the case, the Tribunal recorded a finding of fact that the delay in filing the declaration in Form No. 12 was because of the bona fide belief on the part of the assessee that the same was filed along with the return as it was a regular practice of the firm. But since, at the time of assessment, it transpired that the declaration was not on the record nor could the assessee produce any satisfactory evidence to substantiate the filing thereof along with the return, a fresh declaration was filed and a prayer was made for condonation of delay in filing the same. Considering all these facts, the Tribunal has held that it was a case of bona fide mistake by the assessee and, in view of the decision of the Allahabad High Court in the case of CIT v. Co-operative Cane Development Union Ltd. [1975] 101 ITR 368, the Tribunal took the view that the bona fide mistake or the bona fide belief can be deemed to be sufficient cause and, accordingly, the Tribunal held that the assessee was prevented by sufficient cause from filing the declaration in Form No. 12 by July 30, 1972, and thereby condoned the delay and further held that the assessee-firm is entitled to continuation of registration for the assessment year 1972-73.
6. So far as question No. 1 is concerned, on a detailed consideration, I have held in the connected case, namely, Taxation Case No. 105 of 1978 (CIT v. Mumtaz Ali [1991] 190 ITR 249 (Patna)) that an appeal lies against the order of the Income-tax Officer refusing continuation of registration under Section 184(7) of the Act before the Appellate Assistant Commissioner and, as such, the second appeal before the Tribunal is obviously competent. So far as question No. 2 is concerned, whether there was sufficient cause justifying the delay in filing the declaration in Form No. 12, it is essentially a question of fact unless any perversity in a legal sense is shown. In the present case, the Department has nowhere asserted that the Tribunal, while accepting the plea of reasonable cause of the assessee, has based its findings on any irrelevant or extraneous considerations.
7. Under the circumstances. I answer both the questions in the affirmative, i.e., in favour of the assessee and against the Department. Since none has appeared on behalf of the assessee, there shall be no order as to costs.
Let a copy of this judgment be transmitted to the Assistant Registrar of the Income-tax Appellate Tribunal 'B' Bench, Patna, in terms of Section 260 of the Act.