926. Whether renewal of registration can be refused merely because renewal had been refused in the immediately preceding year on technical grounds

1. The Board has considered the question as to whether renewal of registration can be granted to a firm for a particular year on the basis of a declaration in Form No. 12, if in the immediately preceding year, the same was refused on technical grounds or whether Form No. 11 should be insisted upon for granting registration for that year.

2. The Patna High Court in the case of Purusottam Lal Kishorilal v. CIT [1978] 115 ITR 377 following the decision in the cases of S.P. Pandey v. CIT [1974] 96 ITR 515 and CIT v. Sitaram Bhagwan­das [1976] 102 ITR 560 has held that the ITO is not justified to refuse renewal of registration to the firm merely because renewal had been refused in the immediately preceding year on technical grounds, so long as there is no change in the constitution of the firm or in the shares of the partners. The judgment of the Patna High Court has been accepted by the Board.

Circular : No. 289 [F. No. 210/19/77-IT(A-II)], dated 29-12-1980.

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October 2020