J.V. Gupta, J. - (1.)ON 30th March, 1968, Sarvashri M.M. Bed, R.P. Beri and their father, Shri Gurdial Singh Beri, entered into a partnership to carry on the business of manufacture and sale of chemicals in the name and style of M/s. Beri Chemical Industries, Jullundur. This firm was granted registration till the assessment year 1970-71. ON 1st March, 1971, Shri Gurdial Singh Beri died and thereupon a new partnership deed was executed on 2nd March, 1971, and Shrimati Vidyawati, widow of Shri Gurdial Singh, joined the firm as a partner. ON 8th September, 1971, the assessee, i.e., the newly constituted firm, filed an application for registration for the assessment year 1971-72. Under Section 184(4) of the I.T, Act, 1961 (hereinafter referred to as "the Act"), this application should have been filed before the end of the previous year, i.e., 31st March, 1971. The assessee, therefore, prayed for condonation of delay in filing the application for registration on the ground that Shri Gurdial Singh was the managing partner of the firm and that, due to his death, the other partners were in a state of confusion and so they could not apply for registration before 31st March, 1971. This plea of the assessee was not accepted by the ITO and he refused to condone the delay in filing the application for registration. He, therefore, rejected the application for registration and completed the assessment of the assessee in the status of an unregistered firm. The assessee filed two appeals before the AAC. ONe was against the order of the ITO completing the assessment in the status of an unregistered firm and the other was against the order of the ITO refusing to condone the delay under the proviso to Section 184(4) of the Act. (In the present reference, we are only concerned with the order refusing to condone the delay). In the appeal against this order passed by the ITO refusing to condone the delay in filing the application for registration, the 'AAC held that no appeal was maintainable against such an order. The assessee then went up in second appeal before the Tribunal against the order of the AAC. However, the Tribunal accepted the appeal of the assessee and directed the ITO to grant registration to the assessee-firm for the assessment year under consideration, with the following observations :
"We have gone through the record and heard the learned representatives of the parties. In our opinion, the AAC had erred in not entertaining the appeal in the present case. Sub-section (4) of Section 184 merely provides the period of limitation during which an application for registration has to be filed. The proviso to this sub-section enables the ITO to condone the delay in filing the application for registration if he is satisfied that the firm was prevented by sufficient cause from making the application before the end of the previous year. However, in case he refused to condone the delay, the result is that the registration is refused to the assessee-firm and then the order of refusal must be deemed to have been passed under Section 185(1)(b) of the Income-tax Act, 1961, and not under the proviso to Sub-section (4) of Section 184. That being so, the order refusing registration to the assessee-firm in the present case was, in fact, passed under Section 185(1)(b) and as such the same was appealable before the AAC."

(2.)IT was further held by the Tribunal that the impugned order passed by the ITO was really an order under Section 185(1)(b) and not under Section 184(4) of the Act, and as such an appeal was maintainable before the AAC.
At the instance of the revenue, the following question of law has been referred for the opinion of this court:

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the order passed by the Income-tax Officer refusing to entertain the assessee's belated application for registration under the proviso to Section 184(4) tantamounted to an order under Section 185(1)(b) and so an appeal was maintainable against such an order under Section 246(j) of the Income-tax Act, 1961 ? "

After hearing the learned counsel for the parties, we are of the opinion that the Tribunal was right in law in holding that the order passed by the ITO refusing to entertain the belated application of the assessee under the proviso to Section 184(4) tantamounted to an order under Section 185(1)(b) and so an appeal was maintainable, against such an order, under Section 246(j) of the Act. In coining to this conclusion, we are supported by a judgment of the Supreme Court in Mela Ram and Sons v. CIT [1956J 29 ITR 607 and CIT v. Dineshchandra Industries [1975] 100 ITR 660 (Guj). The ratio of the Supreme Court's judgment in Mela Ram's case is fully applicable to the facts of the present case. In that case, an order by the AAC holding that there was no sufficient reason for excusing the delay under Section 30(2) of the Indian I.T. Act, 1922, and rejecting the appeal as time-barred, was held to be an order passed under Section 31 and an appeal lay from that order to the Appellate Tribunal. It was further held that an appeal presented out of time was an appeal and an order dismissing it as time-barred is one passed in appeal. Keeping the said ratio in view in the present case, the order passed by the ITO refusing to entertain the assessee's belated application for registration under the proviso to Section 184(4) tantamounted to an order under Section 185(1)(b) and, thus, an appeal was competent against such an order under Section 246(j) of the Act. In the case of CIT v. Dineshchandra Industries [1975] 100 ITR 660 (Guj), the provisions of the earlier Act of 1922 and the provisions of the present Act of 1961 have been considered and it has been observed that there were no justifying reasons for Parliament to depart materially from the scheme which was available under the Act of 1922 and when some doubts have been raised as to whether appeals are competent against orders under Section 184(7) or Section 185(2) or (3), Parliament has by clarificatory legislation made these orders appealable. In this view of the matter, the answer to the question is in the affirmative, i.e., against the revenue and in favour of the assessee. The department will pay the costs of this reference.

Bhopinder Singh Dhillon, J.

I agree.