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Issues: Whether the assessee was entitled to renewal of registration for the assessment years 1958-59 and 1959-60 despite the revenue's objection that the profits of the branch business were said to be shared among four persons in a firm not accepted as genuine.
Analysis: The firm was found to be genuine and all statutory requirements for registration had been complied with. The objection that the profits of the branch were claimed to be divisible among four members did not, by itself, justify refusal of renewal when that stand had not been accepted by the revenue. Once the statutory requisites for registration were satisfied, the power of the Income-tax Officer was not discretionary but had to be exercised in accordance with the statute and the rules.
Conclusion: The renewal of registration was justified in law and the issue was decided in favour of the assessee.
Final Conclusion: The reference was answered against the revenue, and the assessee's entitlement to renewal of registration for the years in question was upheld.
Ratio Decidendi: Where the statutory conditions for registration of a firm are satisfied, renewal cannot be refused merely because the revenue does not accept the assessee's stand regarding division of profits in a connected branch business; the power to grant registration is non-discretionary in such circumstances.
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