Law:

Section:

Section 184(7) of the Income-tax Act, 1961 - Firm - Position prior to 1-4-1993 - Assessment year 1967-68 - Whether declaration contemplated under section 184(7) for continuance of registration of partnership firm has to be filed at end of relevant accounting year - Held, yes - Whether, therefore, where declaration was made by assessee-firm in middle of relevant accounting year, though signed by all partners of firm, it could not be regarded as valid declaration for purpose of section 184(7) - Held, yes FACTS For the relevant assessment year the assessee filed its return on 19-8-1968 alongwith a declaration under section 184(7), unsigned by two of its partners, Later, the assessee filed a revised return alongwith a new declaration made on 13-6-1966 and signed by all the partners and, stated that this declaration was not traceable when the original return was filed. The ITO accordingly completed the assessment on the basis that it was a registered firm. Subsequently, the Additional Commissioner concluded that the said declaration was not valid as the same was meant for the assessment year 1966-67 and was made during the course of the accounting period and therefore, could not have validly made for the purpose of the relevant assessment year. The Additional Commissioner, thus, under section 263 cancelled the assessment with direction to the ITO to charge tax after treating the assessee as an unregistered firm. On appeal, the Tribunal having found that the declaration was bearing the signatures of all the partners of the firm and further that the same was meant for assessment year 1967-68, set aside the Additional Commissioner's order. On reference : HELD In the instant case, the declaration in question was made by the assessee on 13-6-1966. The accounting period was over about 5 months after the declaration was made. It was, therefore, apparent that the assessee could not have made any declaration in the month of June about the state of affairs which was to be found in the month of November. Obviously, therefore, this declaration was not one contemplated by sub-section (7) of section 184. Moreover, the defect in question was not merely a technical one because…

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