1985 (4) TMI 13 - HC - Income Tax

Court upholds assessee firm's registration, filing within extended time validated.

The Court upheld the decisions of the Appellate Assistant Commissioner and the Appellate Tribunal, ruling in favor of the assessee firm against the ... Declaration of continuation of registration under section 184(7) - extension of time for filing return under section 139(1) - presumption of grant of extension where department does not reply - filing Form No.12 with the returnDeclaration of continuation of registration under section 184(7) - extension of time for filing return under section 139(1) - presumption of grant of extension where department does not reply - filing Form No.12 with the return - Whether continuation of registration of the assessee-firm was rightly held to subsist though there was no formal order extending the date for furnishing the return. - HELD THAT: - The Tribunal and the Appellate Assistant Commissioner accepted the finding of fact that the assessee sent an application in Form No.6 for extension of time by registered post and later filed the return on February 11, 1972 together with Form No.12 claiming continuation of registration. The Income-tax Officer's order did not mention rejection of the Form No.6 application or show that the application was not sent; the Department failed to controvert the postal receipt relied upon by the assessee. In those circumstances the court upheld the principle that where the assessee applies for extension and the Department neither communicates rejection nor replies within the period applied for, the assessee may legitimately presume that the extension has been granted. Applying that principle, the court held that the return was filed within the extended time and that filing Form No.12 along with the return complied with the proviso permitting the declaration to be furnished with the return. The court also observed that even under the earlier form of the proviso the declaration could be filed with the return, so the Tribunal's conclusion that continuation of registration should be allowed was legally justified.Continuation of registration of the assessee-firm was rightly held to subsist; the Tribunal's view is upheld.Final Conclusion: The reference is answered in the affirmative in favour of the assessee: in the absence of any rejection or communication by the Income-tax Officer, the assessee was justified in presuming extension of time and the declaration in Form No.12 filed with the return validated continuation of registration for AY 1971-72; no order as to costs. Issues involved: The issue involves the continuation of registration of an assessee firm under section 184(7) of the Income-tax Act, 1961, based on the timely filing of necessary declarations and returns.Judgment Details:Issue 1: Declaration for Continuation of RegistrationThe assessee firm filed a declaration under section 184(7) of the Act for continuation of registration after the due date for filing the return had passed. The Income-tax Officer refused continuation of registration citing non-fulfillment of conditions. However, the Appellate Assistant Commissioner and the Appellate Tribunal found that the declaration was filed along with the return within the extended time granted for filing the return. The Appellate Assistant Commissioner held that the time granted for filing the return also applied to the declaration of continuation of registration. The Appellate Tribunal agreed with this finding, leading to the continuation of registration for the assessee firm.Issue 2: Extension of Time for Filing ReturnThe Department contended that the assessee had not filed an application in Form No. 6 for extension of time for filing the return. However, it was found that the assessee had indeed applied for an extension, supported by evidence of sending the application by registered post. The Appellate Assistant Commissioner and the Appellate Tribunal accepted that the extension of time for filing the return also covered the filing of the declaration in Form No. 12 for continuation of registration.Issue 3: Presumption of Extension of TimeThe Court held that if the Income-tax Officer does not reject an application for extension of time for filing the return and does not communicate any rejection to the assessee, it is presumed that the extension has been granted. Citing a previous decision, it was established that the assessee was justified in presuming the extension of time for filing the return. Therefore, the return filed within the extended time was considered valid.Conclusion:The Court upheld the decisions of the Appellate Assistant Commissioner and the Appellate Tribunal, ruling in favor of the assessee and against the Revenue. It was held that the continuation of registration for the assessee firm was justified, even in the absence of a formal order from the Income-tax Officer extending the date for furnishing the return.