1977 (11) TMI 56

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....ome-tax Act, 1961. The question arises out of the proceedings for the assessment year 1963-64 and must be considered to be in respect of that year. The assessee having failed to file a return within the time within which the assessee, which is a partnership firm, was called upon to file it by a notice under section 139(2), the Income-tax Officer proceeded to make an ex parte assessment order under section 144 of the Act. Even though notice under section 142(1) of the Act was served on the assessee calling upon him to produce account books on 28th August, 1964, the assessee did not produce the account books. An application for extension of time made by the assessee was rejected and finally an ex parte assessment order under section 144 wa....

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.... Now, it is difficult to see how the Tribunal has taken the view that there was no time limit within which the declaration contemplated by clause (ii) of the proviso to section 184(7) could be filed. It is, no doubt, true that where a firm is already registered under sub-section (7), it is statutorily provided that the registration shall have effect for every subsequent year. But before this happens, two conditions are required to be satisfied which are stated in the proviso to sub-section (7). The first condition is that there should be no change in the constitution of the firm or the shares of the partners as evidenced by the instrument of partnership on the basis of which the registration was granted. The second condition which is requir....

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....f sub-section (7) requiring that such declaration must be filed before the date of the assessment." If both the conditions prescribed in the proviso to sub-section (7) of section 184 are not satisfied or even if any one of those conditions is not satisfied, the effect is that the registration granted for the earlier year ceases to have effect for the subsequent year for which the declaration was required to be filed. Mr. Dwarkadas, appearing on behalf of the assessee, contends that the Tribunal has taken an equitable view of the matter and that since the firm has been registered and has been assessed as such for a long period of time, the order of the Tribunal shows that it did not wish to inflict a penalty of having the partnership t....