- (1.) THE Tribunal, Allahabad has referred the following question of law under s. 256(1) of the IT Act, 1961 (hereinafter referred to as "the Act") for opinion to this Court : "(1) Whether the Tribunal was legally justified in upholding the order of the AO, refusing to renew the registration without issuing show -cause notice and without affording any opportunity of being heard to the assessee for explaining the delay in furnishing the declaration within the specified time contemplated under s. 184(7) -
(2.) BRIEFLY stated the facts giving rise to the present reference are as follows : he reference relates to the asst. yr. 1992 -93. The applicant is a partnership firm. For the assessment year in question it did not file its return of income within the specified period whereupon notice under s. 142(1) of the Act was issued requiring it to file the return. When the return was not filed, a notice under s. 148 was issued but for reasons best known to the applicant, it did not file the return within the specified time. However, it filed the return of income on 31st continuation of the registration. The AO while passing the assessment under s. 144 of the Act refused the continuation of registration on the ground that the declaration was not filed within the time specified under s. 139 of the Act and the same is not in order. The appeal preferred by the applicant before the CIT as also the Tribunal insofar as is the question of continuation of registration was rejected.
(3.) WE have heard Sri Krishna Agrawal, learned counsel for the applicant and Sri A. N. Mahajan, learned standing counsel appearing on behalf of the Revenue. Sri Krishna Agrawal, learned counsel submitted that the assessing authority himself while refusing to grant continuation of registration had treated the declaration as to be not in order and, therefore, the provisions of s. 185(3) would be applicable and the applicant was entitled for an opportunity. He has placed reliance upon the decision of the apex Court in the case of CIT vs. Ashoka Engineering Co. (1993) 109 CTR (SC) 491 : (1992) 194 ITR 645 (SC) wherein the apex Court has held as follows (pp. 649 -50) : "It will be appreciated that, even if an application is filed before the ITO which prima facie appears to be out of time, the ITO cannot straightaway reject it or refuse to entertain it. He will have to give an opportunity to the assessee to show cause as to how it can be entertained. Sometimes, even his impression that there is delay may itself be shown to be wrong. If the assessee satisfies the ITO that there was sufficient cause, then the application has to be entertained by the ITO. In other words, the defect that the application was beyond time stands remedied and the application is in order. On the other hand, if delay is not condoned, the officer rejects the application as not 'in order'. The defect need not be something in the application. It can also be one in the procedure prescribed for making the application. In our opinion, there is nothing artificial or strained in the interpretation placed by the High Courts that cases where registration is refused for the reasons set out in s. 184(4) or (7) are really cases where there is an order refusing registration to the firm by rejecting its application within the meaning of s. 185(2) or (3).";