Law: Income Tax Act, 1961

Section: 185

Income-tax---Firm---Registration---Continuation of registration---Application filed before end of relevant accounting year---Firm entitled to opportunity to rectify defect---Income Tax Act, 1961, S.185. The purport and reach of subsection (7) of section, 185 of the Income Tax Act, 1961 are for the continuance of registration for every subsequent assessment year provided there is no change in the constitution of the firm or the shares of the partners. The declaration under clause (ii) of the proviso is the statutory mode of proof of these requirements for the registration to have effect for every succeeding year. The facts to be proved are those stated in clause (i) of the proviso and any defect in the declaration is capable of rectification as provided for in subsection (3) of section 185. An infirmity in the declaration that it does not cover the whole of the account period as required by Form NO-12 cannot be held to be fatal to the declaration itself and the infirmity can be treated only as a defect capable of rectification under subsection (3) of section 185: Held, that the declaration filed for continuation of registration in Form No. 12 was only defective as it was filed before the end of the relevant accounting year and the assessee-firm was entitled to an opportunity for rectification of the defect as provided for under subsection (3) of section 185. Mathew and Mathew v. CIT (1986) 161 ITR 9 (Ken.); CIT v. Sitaram Bhagwandas (1976) 102 ITR 560 (Pat.); Nand Singh Taneja & Sons v. CIT (1973) 91 ITR 202 (All.) and CIT (Addl.) v. Murlidhar Mathura Prasad (1979) 118 ITR 392 (All.) fol. CIT v. Trinity Traders (1974) 97 ITR 81 (Guj.) and Halima Fancy Stores v. CIT (1976) 104 ITR 190 (Mad.) ref. JUDGMENT This writ petition is filed by one of the partners of the petitioner firm. It is alleged that the firm is carrying on business in mercerising and is liable to be assessed to income-tax under the Income Tax Act, 1961. It is also stated that from the year 1971-72 onwards, the petitioner-firm was assessed to income-tax as a registered firm by the Assessing Officer. The petitioner firm filed the return of income for the assessment year 1987-88. It is also…

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