The Commissioner of Income Tax vs Paris Dry Cleaners, Srinagar

B.P. Saraf, Chief Justice

By this reference u/s 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 u/s 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]194ITR645(SC) . 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 Commissioner of Income Tax, Andhra Pradesh Vs. M/s. Satyanarayana Saw Mills, . 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 u/s 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 u/s 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. u/s 185(1)(b) of the Act. which is appealable u/s 246(j) (as it stood at the material time ).

Accordingly, the question referred to us is answered in the affirmative, that is, in favour of the assessee and against the revenue. On the facts and

in the circumstances of the case, there shall be no order as to costs.