Sufficient cause for delayed registration form filing and statutory notice before rejection under section 185(2)

Delay in filing Form No. 11 for registration was treated as supported by sufficient cause where the partners' close relative was seriously ill, later died, and the firm's affairs were disrupted by financial . The application was otherwise genuine, Form No. 12 had been filed in time, and the correct form was subsequently furnished. It was stated that, where a registration application is not in order, section 185(2) requires the Income-tax Officer to intimate the defect and allow one month for rectification before rejection, and the assessee was held entitled to that notice.

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Issues: Whether the delay in filing Form No. 11 for registration was supported by sufficient cause and whether the assessee was entitled to notice to remove the defect under section 185(2) before rejection of the application.

Analysis: The delay was explained by the serious illness and death of the partners' close relative, the resulting disruption to the firm's affairs, and the financial crisis that followed. The application for registration was otherwise genuine, Form No. 12 had been filed within time, and the assessee later filed the correct form. Under section 185(2), if the application is not in order, the Income-tax Officer must intimate the defect and allow one month for rectification before rejecting the application.

Conclusion: The delay was held to be for sufficient cause, and the assessee was held entitled to notice for rectification of the defect under section 185(2). The appeal was allowed.

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