Law:

Section:

Section 185 of the Income-tax Act, 1961 - Firm - Position prior to 1-4-1993 - Assessment year 1964-65 - Whether power of ITO under proviso to section 184(4) is only to excuse delay in filing application for registration and not to excuse delay in drawing up or executing partnership deed itself - Held, yes - Whether application for registration of firm must be made before end of previous year and, therefore, if application is made even on last day of accounting year, firm must be registered for next assessment year - Held, yes - Whether for grant of registration, partnership should have been in existence for whole of accounting year though document of partnership need not be operative during whole year but should be in force on day on which application is made - Held, yes - Whether where application for registration of firm was filed and partnership deed was drawn up after close of relevant accounting period, registration of firm could not be granted for that year - Held, yes FACTS The assessee was a firm of lawyers and the partners had been carrying on their profession as an unregistered firm. On 10-4-1964, they drew up a partnership deed embodying the terms and constitution of the firm, and, on the same day, they applied for registration of the firm for the assessment year 1964-65. The accounting year being from 1-4-1963 to 31-3-1964. Since the application for registration was not filed before the close of the previous year, an application for condoning delay was filed. The Income-tax Officer executed the delay. But he did not register the firm, as the partnership deed was not in force during the relevant accounting year. On appeal, the Appellate Assistant Commissioner held that, since the Income-tax Officer excused the delay in filing the application for registration, he should have registered the firm as well as, under the Income-tax Act, 1961, the partnership deed need not have been in force during the relevant accounting year and it was enough if it accompanied the application for registration. This view was confirmed by the Tribunal. On reference : HELD Section 184(4) of the 1961 Act enacts that the application for registration of a firm shall be made…

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