1982 (3) TMI 33 - HC - Income Tax

High Court rules on appealability of registration application dismissals under Income Tax Act

The High Court held that orders dismissing registration applications under section 184(7) of the Income Tax Act were appealable. It affirmed the ... Appeals, Firm, Registration Issues:Interpretation of Income Tax Act - Appeal against refusal of registration u/s. 184(7)Analysis:The case involved a reference under section 256(1) of the Income Tax Act, 1961 regarding the competence of the Appellate Assistant Commissioner (AAC) to entertain an appeal against the Income Tax Officer's (ITO) refusal to grant registration u/s. 184(7). The assessee had filed a return of income for the assessment years 1973-74 and 1974-75, seeking continuation of registration granted for the previous year. The ITO denied the claim due to a delay in filing the declaration in Form No. 12. The AAC allowed the appeal, citing reasonable cause for the delay and continuity in the firm's constitution. The Department appealed to the Tribunal, arguing the AAC's lack of competence. The Tribunal upheld the AAC's decision, leading to the reference before the High Court.The High Court referred to a similar case and highlighted the statutory provisions related to firm registration under sections 184 and 185 of the Income Tax Act. It noted the differing views among High Courts on the appealability of orders dismissing registration applications based on time limitations. The majority view considered such orders as falling under section 185(1)(b) and hence appealable. The Court emphasized the need for a liberal interpretation of statutory provisions granting appeal rights and the importance of uniformity in interpreting the Income Tax Act across different High Courts.Ultimately, the High Court agreed with the majority view and held that the orders dismissing the assessee's registration applications were appealable. It upheld the Tribunal's decision regarding the competence of the AAC to entertain the appeal against the ITO's refusal of registration. The Court answered the referred question in the affirmative, ruling against the Revenue. Each party was directed to bear its own costs in the reference proceedings.