Satish Chandra, J. - (1.) M/s. Nand Singh Taneja and Sons, Kanpur, the assessee, was a partnership-firm which had been accorded registration under Section 185 of the Income-tax Act, 1961, up to and including the assessment year 1964-65. For the assessment year 1965-66, the assessee-firm, on 24th June, 1965, filed before the Income-tax Officer, a declaration, as required by Section 184(7) of the Income-tax Act, 1961, in the prescribed Form 12, stating that there was no change in the constitution of the firm or the shares of the partners as evidenced by the instrument of partnership on the basis of which registration was granted. The last date for filing the return of income for the assessment year 1965-66, on the basis of service of notice under Section 139(2), appears to have been August 5, 1965. The assessee-urm, however, did not file the return at all. On 25th February, 1966, the Income-tax Officer passed an assessment order under Section 144 in default, estimating the business income of the assessee at Rs. 50,000 and treating the assessee as an unregistered firm. Coming to know of this order, the assessee made an application under Section 146 for the cancellation of the assessment order and for passing orders afresh, but this application was rejected.
(2.) THE assessee filed two appeals. One was directed against the original quantum assessment order, and the other against the order rejecting the application under Section 146 of the Act. THE latter appeal was dismissed by the Appellate Assistant Commissioner. THE quantum appeal succeeded. THE Appellate Assistant Commissioner held that the firm had been registered. Its registration could be cancelled under Section 186(2) of the Act, but only fter affording the assessee a reasonable opportunity of being heard. No such opportunity having been given, the assessee-firm could be assessed only in the status of a registered firm. THE assessment order was set aside, and the Income-tax Officer was directed to revise the assessment by adopting the status of the assessee to be that of a registered firm. The assessee as well as the revenue felt aggrieved, and carried the matter in appeal to the Tribunal. The Tribunal dismissed the appeal filed by the assessee. In the appeal of the revenue, the Tribunal held that the question of cancellation of registration under Section 186(2) arises only if the registration of a firm has effect for the particular assessment year under Section 184(7) of the Act. Before registration could have effect under Section 184(7), two conditions had to be fulfilled by the assessee. One was the furnishing of the requisite declaration, the other being the filing of the return. Since the firm had not filed any return, the provisions of Section 184(7) were not satisfied, with the result that the registration of the firm did not have effect for the assessment year 1965-66. In that view, it could not be said that the Income-tax Officer had cancelled the registration. The order of the Appellate Assistant Commissioner was set aside and that of the Income-tax Officer restored. At the instance of the assessee, the Tribunal has submitted this statement of the case for the opinion of this court on the following question of law: " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the registration granted to the assessee in the earlier years could not have effect for the assessment year 1965-66?"
(3.) THE provision requiring consideration is Section 184(7) of the Act. It occurs in Chapter 16. Sub-chapter A thereof relates to assessment of firms. It consists of sections 182 and 183. Sub-chapter B deals with registration of firms. It consists of sections 184 to 186. Sub-chapter C provides for changes in constitution, succession and dissolution of firms, consisting of sections 187, 188 and 189. Section 184 deals with the first registration of a firm under the Act of 1961. It requires an application for registration. [Vide Sub-section (4)]. The application is to be made before the end of the previous year for the assessment year in respect of which registration is sought. The Income-tax Officer, however, can entertain the application after expiry of this period for sufficient cause. Under Sub-section (5), the application is to be accom panied by the original instrument evidencing the partnership.;