1995 (12) TMI 7 - HC - Income Tax

Court denies partnership firm's registration under Income-tax Act for assessment years 1976-77 and 1977-78.

The court rejected the application for registration of a partnership firm under the Income-tax Act for assessment years 1976-77 and 1977-78. The court ... Reference To High Court, Supreme Court Issues:1. Registration of a partnership firm under the Income-tax Act for assessment years 1976-77 and 1977-78.2. Refusal of registration by the Income-tax Appellate Tribunal.3. Application under section 256(2) of the Income-tax Act seeking direction to the Tribunal to state the case and refer questions.4. Contention regarding the pendency of similar questions before the Supreme Court.Analysis:The judgment pertains to an application filed by an assessee, a partnership firm engaged in the sale and purchase of cloth, under section 256(2) of the Income-tax Act, 1961, seeking registration for the assessment years 1976-77 and 1977-78. Initially, the firm had partners Smt. Gangabai and her son, Ramchandra, in equal shares, which was later revised to include another partner, Smt. Indirabai. The Income-tax Officer refused registration for the assessment year 1976-77, but the Appellate Assistant Commissioner allowed it. However, the Income-tax Appellate Tribunal, Indore, on appeal by the Department, refused registration. The applicant then filed an application under section 256(1) of the Act, which was partially accepted by the Tribunal, leading to the current application under section 256(2) to refer questions to the Tribunal.During the hearing, the applicant's counsel argued for a direction to the Tribunal to refer proposed questions due to similar issues pending before the Supreme Court. Conversely, the Department's counsel contended that the pendency before the Supreme Court did not warrant a reference and that the applicant had alternative remedies available under the Act for rectification. The court noted that a previous decision had ruled against the applicant on the registration issue, citing the case of Ganga Cut Piece Centre v. CIT [1982] 137 ITR 274, with no change in the facts. Additionally, referencing CWT v. Smt. Usha Devi [1990] 183 ITR 75 (MP), the court held that the pendency of similar issues before the Supreme Court did not justify a reference. As the point of controversy had been decided against the assessee, and a similar case had been rejected previously, the court found no referable questions in the present case.Consequently, the court rejected the application, allowing the applicant to pursue appropriate remedies as necessary under the law in the future. No costs were awarded, but a counsel fee of Rs. 750 was specified for either side if certified.