Pending registration application must be decided before assessing a firm as unregistered, the High Court held.

Where an assessee's prescribed application for registration remained pending, the Income-tax Officer was required to decide that application before the firm could be assessed as an unregistered firm. A direction to assess the firm as unregistered without first disposing of the registration request was not valid, and the Tribunal was right to set aside that direction and require assessment only after the registration claim was determined according to law. The issue was answered in favour of the assessee and against the revenue.

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Issues: Whether the Income-tax Officer was bound to dispose of the assessee's pending application for registration before the firm could be assessed as an unregistered firm.

Analysis: The assessee had filed an application in the prescribed form seeking registration, and that application had not been decided by the Income-tax Officer. In that situation, the Additional Commissioner could not validly direct assessment of the firm as unregistered without the statutory application first being dealt with according to law. The Tribunal was right in setting aside that direction and requiring the Income-tax Officer to decide the registration request and then make the assessment accordingly.

Conclusion: The question was answered in the affirmative, in favour of the assessee and against the revenue.

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