Cancellation of firm registration upheld as within Commissioner's statutory powers, permitting assessment as if no registration existed.

Cancellation of firm registration under the income-tax registration scheme was considered against the statutory grant of power to the Commissioner and antecedent precedent culminating in reversal of prior authority. Applying principles of statutory construction and the controlling precedent, the Court held the Commissioner validly exercised his power to cancel prior registration under the registration provisions and to direct assessment as if no registration had been granted, and upheld the cancellation and consequent assessment treatment against the assessee.

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Issues: Whether the order passed by the Commissioner of Income-tax cancelling the registration of the firm and directing assessment on the basis that no registration had been granted was valid in law.

Analysis: The question was considered with reference to provisions governing registration of firms and the power of the Commissioner to cancel prior registrations, namely Section 26A, Section 23(5) and Section 33B of the Income-tax Act, 1922. The decision was informed by the legal principle established in the earlier line of authority culminating in the reversal of the decision in Commissioner of Income-tax v. Amritlal Bhogilal & Co., which the Court found controlling on the present facts. Applying that precedent and the statutory scheme for registration and cancellation, the Court concluded that the Commissioner's action fell within the scope of his powers under the Act and was legally sustainable.

Conclusion: The order cancelling the registration of the firm and directing assessment as if no registration had been granted is upheld; decision is against the assessee and in favour of the Revenue.

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