Renewal of firm registration under the 1961 tax law must follow the new Act's form, not repealed Act requirements.

Renewal of a firm's registration for the 1961-62 assessment year, treated as part of assessment proceedings under the repealing and saving provisions and the Removal of Difficulties Order, had to be governed by the Income-tax Act, 1961 and the prescribed rules. The renewal application was therefore not to be tested by section 26A of the 1922 Act. The prescribed continuation form under section 184(7) required only a declaration of earlier registration and no change in constitution or profit-sharing ratios; it did not require proof that the previous year's profits had been fully distributed among partners. The Tribunal erred in applying the 1922 Act conditions, and the assessee was entitled to renewal.

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Issues: Whether the assessee-firm's application for renewal of registration for the assessment year 1961-62 was governed by the Income-tax Act, 1961 and the rules framed thereunder, and whether the Tribunal was right in refusing renewal on the footing that the profits of the previous year had not been distributed.

Analysis: The registration proceedings for the relevant assessment year were part of the assessment proceedings by virtue of section 297(2)(b) of the Income-tax Act, 1961 and clause 2 of the Income-tax (Removal of Difficulties) Order, 1962 issued under section 298(1). Once treated as part of assessment proceedings, the application had to be tested under the 1961 Act and the rules framed thereunder, not under section 26A of the Income-tax Act, 1922. The prescribed form for continuation of registration under section 184(7) required only a declaration as to the grant of earlier registration and absence of change in constitution or shares; it did not require a declaration that the whole profits of the previous year had been distributed among the partners.

Conclusion: The Tribunal was not right in law in holding that the assessee-firm was not entitled to renewal of registration for the assessment year 1961-62.

Final Conclusion: The reference was answered in favour of the assessee by holding that the renewal application had to be considered under the 1961 Act and the Tribunal erred in applying the 1922 Act requirements.

Ratio Decidendi: Where registration or renewal proceedings for an assessment year are treated as part of the assessment proceedings under the repealing and saving provisions and the removal of difficulties order, the application must be judged under the new Act and its prescribed form, and not by the requirements of the repealed Act.

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