Commissioner of Income Tax vs Gangadin Kedarnath

The revenue has filed this application u/s 256(2) of the income tax Act, 1961 (''the Act'') seeking reference of the following questions: 1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in not quashing the order of the Dy. Commissioner of income tax (A) when he entertained the appeal on a matter which was not appealable under law?

Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the Assessing Officer ignored the mandatory provisions of section 186 of the income tax Act, 1961, when the provisions of section 185 of the IT Act were applicable?

Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that application for condonation of delay was to be considered by Assessing Officer when the said application was not filed till completion of assessment?

We have heard the learned standing counsel for the revenue.

The assessee is a firm and duly registered. The dispute relates to the assessment year 1988-89. For that assessment year, the assessee filed return and declaration Form No. 12 on 29-7-1988 as against the due date of 30-6-1988. There was a delay of 29 days in this regard. The ITO made assessment u/s 143(1) of the Act treating the firm as an unregistered firm. He also passed a separate order u/s 185(3) of the Act rejecting the assessee''s claim for continuance of the registration. The assessee challenged the assessment by way of an appeal though he did not prefer an appeal against the order purportedly passed u/s 185(3). The Deputy Commissioner (Appeals) set aside the assessment and directed the fresh assessment made treating the assessee as a registered firm. The Tribunal confirmed this order and also declined to refer the questions when moved by the revenue. Hence, this petition.

There is no dispute that there was delay of 29 days in filing the return in declaration Form No. 12. In regard to the delay in filing the declaration, it was open to the assessee to file an application explaining the delay and showing sufficient cause as contemplated in proviso (ii) sub-section (7) of section 184 of the Act. The assessee asserted that he filed such an application. This was accepted by the Tribunal in the second appellate order. In the subsequent statement of fact filed by the revenue, it was stated that no such application was filed, nevertheless in the order declining the reference, the Tribunal reiterated that the application was filed and the same was not considered by the assessing authority. In these circumstances, we cannot rely on the statement made by the revenue that there was no such application.

It is contended by the learned counsel for the revenue that since the Tribunal found that an application was made and was not considered by the assessing authority, the Tribunal should have remanded the matter to the assessing-authority for considering the application explaining the delay and should have refrained from holding that there was sufficient cause for the delay and treating the declaration as filed within time. The learned counsel also pointed out that the judgment of the Tribunal does not show that the Tribunal applied its mind to the question whether sufficient cause was made out. The Tribunal confirmed the findings of the Deputy Commissioner (Appeals) who would have gone into this question and recorded a finding. The revenue has not cared to produce copy of order passed by the first appellate authority. In these circumstances, we proceed on the basis that the matter was considered and adjudicated by the Deputy Commissioner (Appeals) and that finding is confirmed by the Tribunal. The questions suggested are merely questions of fact. In our view, the questions suggested do not arise for reference to the High Court. The application is dismissed.