Registration renewal discretion under tax law may be exercised later when not used in the original assessment stage.

The statutory scheme distinguished the Income-tax Officer's power to refuse or cancel firm registration under section 23(4) from the separate procedure for renewal of registration under section 26A. An order refusing renewal under section 23(4) was treated as distinct from the assessment order, and the expression "order of assessment" in section 34(3) did not cover such refusal. On that reasoning, where the discretion under section 23(4) had not been exercised when the assessment was first made, it remained open to be exercised later when the application was reconsidered de novo pursuant to appellate direction.

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Issues: Whether, after making a best judgment assessment under section 23(4), the Income-tax Officer could later exercise the discretion under that provision while considering renewal of registration of a firm under section 26A.

Analysis: The statutory scheme treated the power to refuse or cancel registration under section 23(4) as distinct from the procedure governing registration under section 26A and the rules made thereunder. An order refusing renewal of registration under section 23(4) was not part of the assessment order itself, and the expression "order of assessment" in section 34(3) did not include such a refusal. Since the Income-tax Officer had not exercised the discretion under section 23(4) when the assessment was originally made, it remained open to him to do so when the assessee's application was taken up again de novo pursuant to the appellate direction.

Conclusion: The Income-tax Officer was competent to exercise the discretion under section 23(4) at the later stage, and the answer was in favour of the Revenue.

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