Tax registration proceedings under the old Act continued under the 1922 regime, not section 186(1) of the 1961 Act.

For returns filed before 1 April 1962, registration proceedings formed part of the assessment proceedings for that year under paragraph 2 of the Income-tax (Removal of Difficulties) Order, 1962. On that basis, section 297(2)(a) of the Income-tax Act, 1961 applied, so proceedings for cancellation and renewal of registration already granted under the Indian Income-tax Act, 1922 could continue only under the 1922 Act. The broader reliance on section 297(2)(k) was rejected because it could not displace section 297(2)(a).

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Issues: Whether the Income-tax Officer could invoke section 186(1) of the Income-tax Act, 1961 to cancel registration and renewal of registration already granted under the Indian Income-tax Act, 1922 for assessment years governed by the earlier Act.

Analysis: The relevant returns had been filed before 1 April 1962, and proceedings relating to registration form part of the assessment proceedings for the relevant year under paragraph 2 of the Income-tax (Removal of Difficulties) Order, 1962. On that footing, section 297(2)(a) of the Income-tax Act, 1961 governed the case, with the result that the proceedings for cancellation of registration and renewal could be continued only under the Indian Income-tax Act, 1922. The wider argument based on section 297(2)(k) was rejected, since that provision could not be used to displace the operation of section 297(2)(a).

Conclusion: The Income-tax Officer had no power under section 186(1) of the Income-tax Act, 1961 to cancel the registration and renewal of registration granted under the Indian Income-tax Act, 1922; the answer to the referred question was in the affirmative, in favour of the assessee.

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