1985 (9) TMI 46 - HC - Income Tax

Composite appeal allowed for registration refusal & assessment order on same day

The court held that a composite appeal could be filed regarding the refusal to renew registration and assessment order made by the Income-tax Officer on ... Appeal To AAC, Firm Issues Involved:1. Whether the Tribunal was right in law in agreeing with the Appellate Assistant Commissioner that the appellant's ground regarding registration cannot be entertained by the latter.2. Whether the Tribunal was right in law in rejecting the contention that u/s 246(1)(c), the point of registration can be agitated before the Appellate Assistant Commissioner in an appeal against a section 143(3) order.Summary:Issue 1: Tribunal's Agreement with Appellate Assistant Commissioner on Registration GroundThe assessee, a partnership firm, filed a declaration for renewal of registration which was received late by the Income-tax Officer (ITO). The ITO refused to entertain the belated declaration and assessed the firm as an unregistered firm. The Appellate Assistant Commissioner (AAC) allowed the business deduction of Rs. 6,209 but held that a composite appeal u/s 246(1)(c) and 246(1)(j) could not lie. The Tribunal upheld this view, relying on the Calcutta High Court decision in Fuel Supply Company v. CIT [1965] 58 ITR 130, stating that the appeal regarding the refusal to renew registration should have been filed separately u/s 246(1)(j).Issue 2: Right to Agitate Registration Point u/s 246(1)(c)The court examined whether the appeal for refusal to renew registration could be entertained u/s 246(1)(c) or 246(1)(j). Clause (c) allows an appeal against the ITO's order of assessment and the status under which the assessee is assessed, while clause (j) pertains to orders under section 185. The court noted that the definition of 'status' includes the classification of a firm as registered or unregistered, thus an appeal touching on the assessee's status could be entertained u/s 246(1)(c). The court referenced decisions from the Allahabad High Court and Calcutta High Court, which supported the view that the classification of a firm as registered or unregistered falls within the ambit of 'status' u/s 246(1)(c).Composite Appeal ValidityThe court concluded that a composite appeal could lie since both the assessment order and the refusal to renew registration were made by the ITO on the same day and were interwoven. The court found no provision in the Act or Rules prohibiting a composite appeal to the same authority. The court criticized the technical approach of the AAC and the Tribunal in rejecting the composite appeal and emphasized that the right of appeal should be liberally construed. The court cited supporting judgments from the Calcutta, Bombay, and Patna High Courts, which held that a single appeal could lie even if different clauses of section 246(1) were attracted.ConclusionThe court answered both questions in the negative, against the Revenue, and held that the composite appeal was maintainable. The reference was disposed of with no order as to costs.