C.S.P. Singh, J. - (1.) THE Income-tax Appellate Tribunal, Allahabad Bench, Allahabad, has under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), referred the following question for our opinion: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was not entitled to the benefit of the provisions of Section 185(3) of the Income-tax Act, 1961, and consequently the benefit of continuance of registration could not have effect for the assessment year 1971-72 ?"
(2.) THE facts leading to this reference may be briefly stated, In the assessment year 1971-72, the assessee-firm which has been constituted under a deed of partnership dated August 1, 1967, consisted of the following partners: 1. Seth Suganchand, 2. Sri Tarachand s/o Sri Suganchand, 3. Smt. Mayadevi w/o Sri Jairamadass, 4. Smt. Poonam Devi w/o Sri Veerbhan Das. The firm had been granted registration on the basis of this partnership for the first time in the year 1969-70 and the registration continued till 1970-71. For the assessment year 1971-72 the firm filed its return along with a declaration in accordance with Section 184(7) in Form No. 12 on the 30th June, 1971, This Form No. 12 was signed by the following three partners; 1. Seth Suganchand, 2. Shri Tarachand, 3. Smt. Poonam Devi, It appears that the fourth partner, Shrimati Mayadevi, was out of Kanpur and one of the partners, Shri Tarachand, who was also the brother of Shrimati Mayadevi, wrote her name "Mayadevi" at the place where the signatures should have been in Form No. 12. The Income-tax Officer refused to register the firm on the ground that the signatures of Shrimati Mayadevi have been forged by another partner. On appeal, the Appellate Assistant Commissioner held that inasmuch as one of the partners had forged the signatures of another partner, the provisions of Section 185(3), which enabled the assessee to remove defects in the application, could not be brought in aid and rejected the appeal. The Tribunal also took the same view.
(3.) TO begin with, inasmuch as it was a case for renewal of registration it would be useful to extract the relevant statutory provisions. The relevant provisions in this behalf are Sections 184(7), 185(3) and Rules 22(5) and 24. "184. (7) Where registration is granted to any firm for any assessment year, it shall have effect for every subsequent assessment year : Provided that- (i) there is 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 the registration was granted; and (ii) the firm furnishes, along with its return of income for the assessment year concerned, a declaration to that effect, in the prescribed form and verified in the prescribed manner." "185. (3) Where the Income-tax Officer considers that the declaration furnished by a firm in pursuance of Sub-section (7) of Section 184 is not in order, he shall intimate the defect to the firm and give it an opportunity to rectify the defect in the declaration within a period of one month from the date of such intimation ; and if the defect is not rectified within that period, the Income-tax Officer shall, by order in writing, declare that the registration granted to the firm shall not have effect for the relevant assessment year." "22. (5) The application shall be signed personally by all the partners (not being minors) in the firm as constituted at the date of the application and, in the case of a dissolved firm, personally by all the persons (not being minors) who were partners in the firm immediately before its dissolution and by the legal representative of any such partner who is deceased, so, however, that in the case of any partner who is absent from India or is a lunatic or an idiot, the application may be signed by any person duly authorised by him in this behalf, or, as the case may be, by a person entitled under law to represent him," "24. Declaration for continuation of registration.--The declaration to be furnished under Sub-section (7) of Section 184 shall be in Form No. 12 and shall be verified in the manner indicated therein and shall be signed by the person concerned in accordance with Sub-rule (5) of Rule 22." Before considering as to whether the assessee was entitled to registration we might state a few other facts. Form No. 12 was filed on 30th June, 1971, along with a declaration in terms of Section 184(7). On enquiry by the Income-tax Officer as to whether Shrimati Mayadevi had put her signature on Form No. 12 it was admitted by Sri Tarachand that the lady was out of station and that he had signed the declaration on her behalf. Shrimati Mayadevi, who appeared before the Income-tax Officer, also stated that she had not personally signed the declaration. It appears that on the 15th September, 1971, i.e., about 2 1/2 months later, an application was moved before the Income-tax Officer requesting that at the time of the submission of the application in Form No. 12, the lady partners were not present and, therefore, Form No. 12 had been signed by one of the partners. It was prayed that the lady partners be permitted to sign the application in Form No. 12. This request was refused and the Income-tax Officer held that inasmuch as it was a case of renewal of registration and not a case under Section 185(2) or (3) the assessee could not be permitted to remedy the defect. On appeal, the Appellate Assistant Commissioner found that Shri Tarachand had signed as Shrimati Maya Jairamdas and not for Shrimati Maya Jairamdas. In this view of the matter he held that although art opportunity could be given to the assessee to remove defects in the application for renewal, inasmuch as it was a case of forgery of the signature of one partner by the other, no opportunity for remedying the defect could be given. The Tribunal also upheld the findings of the Appellate Assistant Commissioner that Tarachand had signed as Maya Jairamdas and held that it was a clear case of forgery inasmuch as Shri Tarachand admitted that he had signed as Maya Jairamdas only after the Income-tax Officer had started enquiry. The Tribunal took the view that a false statement had been made by Shri Tarachand in Form No. 12 and he had committed an act of forgery and, as such, it was not a case of a defect in the form but a case of clear forgery and hence the assessee could not be permitted to remove the defect.;