~ ! ~ l-e::: ;:) 0 U :t: C)-:t:«z ~ 0:=« J: cz« en <C ~z::) c.. r-:1. Income Tax Appeal No. 167 of 2011 1 IN THE HIGH COURT OF PUNJAB AND HARYANAAT CHANDIGARH. , Income Tax Appeal No. 167 of 2011 Date.of decision: 7.7.2011 .' Commissioner of Income Tax-I, ludhiana . . --- Appellant Versus MIs. laljit Hosiery, ludhiana --- Respondent CORAM: HON'BlE MR. JUSTICE ADARSH KUMAR GOEl ACTING CHIEF JUSTICE HON'BlE MR. JUSTICE AJAY KUMAR MITTAl Present: Mr. Rajesh Katoch, Standing Counsel . forthe appellant-Revenue. AJAY KUMAR MITTAL. J. , . This appeal under Section 260A of the Income-Tax Act, 1961 (for short "the Act") has been filed by the R,evenue against the order dated 29.7.2010, passed by the Income Tax Appellate Tribunal i Chandigarh Bench 'A', Chandigarh (in short "the Tribu~al") in ITA No. I . . I 149/CHANDII2010, relating'to the assessment year 2005-06..~ " 2. The following substantial questions of law have' been claimed for determination of this Court: "(i) Whether on the facts and in law, the Hon'ble Income Tax Appellate Tribunal has challenged the constitutional validity of the provisions of Section 184(4) of the Income Tax Act, 1961 by holding that the requirement of """'"", L ."c L I fl. I- a::: :J 0 (.) :I: C)- .J: <C z >!: a:= <C :I: Cz <C en <C ~ Z :J .0. ,..,---. Income Tax Appeal No. 167 of 2011 .2 furnishing certified copy of partnership deed along ~ith the return of income is directory and not mandatOf:Y in nature when the section 184(4) clearly states that "W~ere any such change had taken place in the previous year, the firm shall furnish a certified copy of the revised instrument of partnership along with the return of income for the assessment year relevant to such previous year and all the provisions of this section shall apply accordingly. " (ii) Whether on the f?cts and in law, the Hon'ble Incol11eTax Appellate Tribunal has erred in relying on the decision of Hon'ble Punjab and Haryana High Court in the case of CIT vs. Punjab Financial Corporation, 254 ITR 6 (P&H) (Full Bench) when the two issues are entirely different?" , . 3. The facts, in brief, necessary for adjudication as narrated in the appeal, are that the r~spondent-assessee, filed its return of income for the assessment year 2005-06 on 30.10,2005 declaring income of Rs. 3,68,440/-. Later on, the income of the assessee was, , ' , assessed vide order dated 26.10.2007, passed under Section 143(3) of the Act. The assessing officer completed assessment by taking the status of the assessee as AOP (Association of Partners) and not as firm as the assessee had failed to furnish a certified amended , . . partnership deed along with the return and had, thus, not complied with the provisions of Section 184(4) of the Act. , The assessing officer accordingly disallowed the deduction claimed by the assessee on account of salary and interest paid to the partners amouqting to Rs. 8,08,671/-. ------------------------------------ ~.- I 3 the assessee befor~ the I~r 9f Income Tax (Appeals) [for short "the CIT(A)"], was 5Y':t oWed vide order dated 16.11.2009. During the course of g before the CIT(A), it was submitted on behalf of the assessee - ~~ -- '~iqymeans of written submissions that the adoption of the status as AOP against the status claimed as 'Firm' and disallowance made by the assessing officer on the above count was unsustainable in law. .£It '::) 0 () :I: C)-:t: <Cz ~ ~«:I: Cz <C m <C'-)z ::::) a. The CIT(A) in the order noticed that the assessee had filed, the certified copy of the partnership deed during the assessment proceedings before the assessing - officer and the claim of. the assessee to be assessed as Firm was accepted. The addition of the amoun~ of interest of Rs. 6,86,671/- and salary of Rs. 1,20,0001- paid to the partners was, thus, deleted. 5. The Revenue preferred appeal impugning the order of the , CIT(A). The Tribunal put its seal of affirmation on the findings of the CIT(A) and consequently dismissed the appeal. 6. We have heard le'a'rned counsel for the appellant-rev~nue and have perused the record. . i 7. The point for determination in this case is,Iwhether non- I filing of a certified copy of the partnership deed along ~ith the return I Ii would be fatal and it violates the provisions of Section! 184(4) of the- Act and consequently dis-entitles the assessee to claim'registration of the firm? 8. -The Tribunal while allowing the plea of the assessee relied on a Full Bench. judgment of this Court in CIT vs. p'unjab , Financial Corporation, 254 ITR 6 (P&H) wherein non-filing 'of audit report along with the return was held to be directory and not 167 of 2011 4 /ribunal held that the assessee could not be denied istration where certified copy of the partnership deed fil~ during the course of the assessment proceedings 'he finding recorded by the Tribunal in this'behalf in,para Nos. a90t the order is as under: "8. The Hon'ble. Punjab and Haryana High Courj: in CIT , , vs. Punjab Financial Corporation (supra) has held that the filing of audit report along with the return of income 0 :r: C!)- :r:«z ~tt:«J: C Z« CC«-,z ::Ja. cannot be treated as mandatory and the assessee cannot be deprived of the benefits of deduction if the same ' is filed before the finalization of the assessment. 9. In the facts of the present case" the assessee had furnished the certified copy of the partner$hip deed during the course of assessment proceedings. The status of being assessed as firm is being allowed to the assessee in the preceding year i.e. assessment year 2004-05 and the same is also allowed to the assessee in the I, succeeding years i.e. assessment yearsl 2006-07 and 2007-08, vide order passed u/s 143(3) of\the Act. The , assessee further explained that the status! of firm in the , ' succeeding year is claimed on the basis of the amended instrument of partnership filed before the Assessing Officer in the year under appeal. , In the facts and the circumstances of the present case, we are of the' view that once the certified copy of amended partnership deed is available with the AO before completion of the assessment proceeding, the benefit of being assessedin al No. 167 of 2011 ,5 status of the firm is to be allowed. Respectfully following the ratio laid down by the coordinate Bench of , the Tribunal, we. uphold the order of the CIT(A) in . directing the Assessing Officer to assess -the assessee in the status of firr)1. Consequently, the deduction cl~imed on account of interest and salary paid to the partners is to be allowed. The grounds raised by the Revenue, are I- oCt: :J 0 U :I: C)-:I: <C z ~ ~ <C :I: Cz <C aJ <C,z :::::>c. thus, dismissed. 9. No perversity or illegality could be pointed out by ths learned counsel for the appellant in the finding recorded by the CIT(A)reversing the order of the assessing officer,whereby the claim of the assessee for assessment as a firm and deduction on account of salary and interest paid to the partners had been disallowed, and , , also inthe order of the Tribunal whereby the finding ofthe CIT(A)was affirmed. No substantial question of law, thus, arises for consideration of this Court. 10. In view of the above, the appeal is dismissed. I July 7, 2011 *rkmalik*