Mehta, J. - (1.) THIS reference arises on the request of the assessee.
(2.) THE assessee-applicant is a firm. It carries on business. For the year 1970-71, it was granted registration under the Income-tax Act, 1961 (hereinafter referred to as "the Act"). It filed its declaration for continuation of registration in terms of Sub-section (1) of Section 184 of the Act in respect of the assessment year 1971-72 on October 8, 1971. THE assessee filed an application for condonation of delay to the Income-tax Officer. It was submitted by the assessee that the delay was caused due to the wrong impression about the interpretation of the amended Section 184(7) of the Act. It was further submitted that it was a case of a genuine firm of more than 10 years' standing and a slight delay of seven days should be condoned. THE Income-tax Officer rejected the prayer of the assessee and declined to condone the delay and assessed the assessee as an unregistered firm. An appeal was preferred by the assessee before the Appellate Assistant Commissioner of Income-tax, Alwar Range, Alwar. THE Appellate Assistant Commissioner of Income-tax condoned the delay and held that there are sufficient grounds for condoning the delay. He further directed the Income-tax Officer to allow continuation of the registration if the same is otherwise in order. An appeal was preferred before the Income-tax Appellate Tribunal, Jaipur Bench, Jaipur. Before the Tribunal, the question for consideration was whether the Appellate Assistant Commissioner has jurisdiction to hear the appeal or not? The Tribunal, vide its order of January 18, 1975, held that no appeal against the order of the Income-tax Officer passed under Sub-section (7) of Section 184 is provided by the statute. It further held that the Appellate Assistant Commissioner was, therefore, wrong in having assumed jurisdiction where he did not have any. Hence, the order of the Appellate Assistant Commissioner was set aside. A reference application was submitted, under Section 256(1) of the Act, before the Tribunal. The Tribunal was of the view that the following question of law arose out of the order of the Tribunal and referred the same for opinion: "Whether, on the facts and in the circumstances of the case and on a true interpretation of Sections 246 and 184(7) of the Income-tax Act, 1961, an appeal against the order of the Income-tax Officer passed under Sub-section (7) of Section 184 lies to the Appellate Assistant Commissioner in terms of Section 246 of the said Act ?" Mr. N. M. Ranka, appearing on behalf of the assessee, submitted that an appeal lies under Section 246(c) and (j) of the Act. He further submitted that from a perusal of the order of assessment passed by the Income-tax Officer, it is clear that the order is a composite order and an addition of Rs. 4,000 was also made. It was further contended that the order under appeal was an order challenging the status granted to the assessee-firm. Mr. Ranka, appearing on behalf of the assessee-firm, has invited our attention to Section 143(3) and (2) and submitted that "status", in relation to an assessee, means the classification of the assessee as an individual, a Hindu undivided family or any other category of persons referred to in Clause (31) of Section 1, and where the assessee is a firm, its classification as a registered firm or an unregistered firm. Mr. Ranka farther submits that this amendment has come into force from April 1, 1971. He submits that under Section 2(31), the word "person" has been defined and a firm falls within the definition of person. In support of his contention, he has cited before us the case of Addl. CIT v. Ckekka Ayyanna [1977] 106 ITR 313 (AP), in which their Lordships of the Andhra Pradesh High Court, after considering the law, came to the conclusion that (at p. 322): "We are of the opinion that looking at the question from the point of view of either Section 185(1)(b) or Section 185(3) of the Act, the order of the Income-tax Officer refusing 'to allow continuation of registration to the assessee-firm' tantamounts to refusing to register the firm and, therefore, comes within the ambit of Section 185(1)(b) of the Act and also since the declaration was defective and the assessee-firm had not rectified the defect within the time when called upon to do so, it would be considered as an order under Section 185(3) and, therefore, such an order was appealable under Section 246(j) of the Act." Mr. Ranka has also cited before us the decision of the Allahabad High Court in ITO v. Vinod Krishna Som Prakash [1979] 117 ITR 594, in which their Lordships of the Allahabad High Court, after considering the various provisions of law, held as under (at p. 597): "It is clear that the assessment of a firm as a registered firm or as an unregistered firm is a matter of status, and a dispute that a firm was entitled to be assessed as a registered firm and not as an unregistered one is a dispute relating to the status in which the assessee-firm is liable to be assessed. It is clearly within the ambit of Clause (c) of Section 246 of the Act. The effect of the Income-tax Officer's order refusing to condone the delay in the filing of the declaration in Form No. 12 is refusal to assess the firm as a registered firm. If the assessee claims that it was not liable to be assessed as an unregistered firm but was entitled to be assessed as a registered firm, the claim relates to the status under which the assessee is assessed within the meaning of Clause (c) aforesaid. The assessment order itself could be appealed against on the ground that the assessee was assessed in a wrong status. Since the main reason was the refusal to condone the delay which led to the assessment as an unregistered firm, the same could be questioned in an appeal under Clause (c). The order refusing to condone the delay was hence appealable to the Appellate Assistant Commissioner under Clause (c) as well."
(3.) MR. Ranka has also cited before us the case of National Tractor Co. v. ITO [1983] 143 ITR 95 (P & H). In that case, the assessee submitted an application for condonation of delay on the ground that it had no knowledge about the amendment of the provisions of Section 184(7) of the Act with effect from April 1, 1971, but the Income-tax Officer declined to continue the registration. An appeal was preferred before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner also confirmed the order of the Income-tax Officer. On further appeal, the Tribunal held that the fact of declaration in Form No. 12 having been signed on September 3, 1971, was not determinative of the assessee's knowledge of the changed law requiring the filing of the declaration by September 30, 1971, even if the return of income was filed later, and that, therefore, the assessee's plea as to its bona fide belief that the declaration could be filed along with the return of income as under the law effective until March 13, 1971, could not be rejected. The Tribunal, however, dismissed the assessee's appeal on the ground that since the appeal before the Appellate Assistant Commissioner itself was not competent, the appeal to the Tribunal was also not competent. A writ petition was preferred against the said order before the High Court. The writ petition was allowed and it was held that an appeal lies to the Appellate Assistant Commissioner. Mr. Ranka has also cited before us the case of Madhur Jalpan v. CIT [1983] 143 ITR 351, in which their Lordships of the Patna High Court were of the view that because of the provisions contained in Clause (2) to the Explanation to Section 143, an appeal lies. Their Lordships further held that where a composite order is passed, both rejecting the status of the assessee as a registered firm as well as passing an assessment order assessing it as an unregistered one, the assessee would be at liberty to take both the grounds in the appeal, a right which has been conferred upon it under Section 246(c). Mr. Ranka has also cited before us the case of CIT v. Jabalpur Transport Development Co. [1983] 143 ITR 964, in which their Lordships of the Madhya Pradesh High Court, after considering the various provisions of law, held that an application for continuation of registration even if filed beyond time, can be condoned and if the application for condonation of delay is rejected, even then an appeal lies to the Appellate Assistant Commissioner under Section 246(j). ;