I.T. Reference No. 3A / 1977, decided on 09.05.2000.

Income-tax Act, 1961, S. 246 ( j ) - Maintainability of appeal - Whether appeal maintainable against the order of Income-tax Officer refusing to condone delay in filing an application for registration of the firm under section 184 (4) of the Act – Held : Yes.

It is clear that the Tribunal was justified in holding that appeal was maintainable against the order of the Income-tax Officer refusing to condone the delay in filing an application for registration of the firm, because such an order, in essence, was an order refusing to register the firm on that ground under section 185(1) (b) of the Act, which is appealable under section 246 (j) (as it stood at the material time). [Para 5]

Advocates who appeared in this case:
Senior Central Govt. Standing Counsel, Mr. Anil Bhan for the revenue
None for the assessee

Cases referred: Chronological
1. CIT v. Ashoka Engineering Co. (1992) 194 ITR 645
2. CIT v. Satyanarayan Saw Mills (1996) 8 SCC 4

By this reference under section 256(1) of the Income-tax Act,1961 ("Act"), the Income-tax Appellate Tribunal, Amritsar ("Tribunal") has referred the following question of law to this Court for opinion at the instance of revenue :

"Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that an appeal was maintainable before the Appellate Assistant Commissioner?"

This reference pertains to the assessment year 1974-75. The controversy is about the maintainability of appeal under clause (j) of section 246 of the Income-tax Act,1961("Act" ) against an order of the Income-tax Officer refusing to condone delay in filing an application for registration of the firm under section 184(4) of the Act.

At one point of time ,there was a divergence of opinion on this point. That controversy, however, has now been set at rest by the decision of the Supreme Court in CIT v Ashoka Engineering Co. (1992) 194 ITR 645. In that case , the Supreme Court, on consideration of the provisions of section 185 of the Act, held that cases where registration is refused for the reasons set out in section 184(4) or (7) are really cases where there is an order refusing registration to the firm by rejecting its application within the meaning or section 185(2) or (3). This decision was followed by the Supreme Court in CIT v. Satyanarayan Saw Mills (1996) 8 SCC 4. In that case, Form No. 12, seeking renewal of registration was not filed along with the return but at a later point of time. The Income-tax Officer refused to condone the delay in filing the said form, against which order the assessee preferred an appeal. The question arose whether the said appeal was maintainable. The Tribunal held that it was maintainable which opinion was affirmed by the Andhra Pradesh High Court . Revenue appealed to the Supreme Court. The Supreme Court , following its earlier decision in CIT v. Ashoka Engineering Co. ( Supra) , dismissed the appeal and held that the appeal was maintainable.

In view of the above decisions of the Supreme Court , the controversy in regard to the maintainability of appeal under section 246(j), later renumbered as 246(g), against an order of refusal of registration or renewal of registration on the ground of delay in filing the application for that purpose under section 184 (4) or (7) is no more res integra. Law is now well settled that such an appeal is maintainable.

From the above discussion, it is clear that the Tribunal was justified in holding that appeal was maintainable against the order of the Income-tax Officer refusing to condone the delay in filing an application for registration of the firm, because such an order, in essence ,was an order refusing to register the firm on that ground. under section 185(1) (b) of the Act. which is appealable under section 246(j) (as it stood at the material time ).