TaxTMI 
TaxTMI 
1979 (10) TMI 109
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.... the facts, in the circumstances, in view of the evidence on assessment records and the enquiries made by the ITO in the course of assessment proceedings. The ld. CIT grossly erred to holding that the ITO without making proper enquiries in regard to the validity/ genuineness of the firm granted registration; (2) on the facts, in the circumstances, in view of the evidence on assessment records and the enquiries made by the ITO in the course of assessment proceedings, the ld., CIT grossly erred in holding that the order of the ITO is erroneous and prejudicial to the interest of the Revenue. (3) The impugned order is without jurisdiction, without material and contrary to the material on record. (4) The impugned order is bad in law having been passed without giving opportunity of being heard." Ground No. 4 has not been passed. 3. The facts briefly are that the assessee firm consisting of 19 partners came into existence on 1st April, 1975 for carrying business in country liquor with Head Officer at Gol Bazar, Sriganganagar and 14 branches. The partnership deed was drawn up on 26th Nov., 1975. In the course of the previous year, on 6th June, 1975, one of the partners Sri R....
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....nstituted under an instrument of partnership duly executed. The partnership deed was drawn up on 26th May, 1975 and there-under the firm came into existence w.e.f. 1st April, 1975. On 6th June, 1975 one of the partners Sri Rajkumar died and the remaining partners continued to carry on the business. A revised deed was executed on 20th July, 1975. Application for registration is Form No.11 was filed on 29th March, 1975 along with the partnership deed in original. ITO, Sri Ranka urged, felt satisfied about the genuineness of the firm after examining all the facts and the circumstances of the case. In such a situation, referring to Supreme Court decisions in ShivKasi Match Exporting Co. (1), Agwarlal & Co., vs. CIT(2), and K.D. Kamath & Co., vs. CIT(3), Shri Ranka pleaded, registration could not be refused. He said further that the ld. CIT completely ignored the material which was already on the record. He referred specifically to the assessee's letters addressed to the ITO dt. 16th Aug., 1976 and 28th Aug., 1976 in which the circumstances under which the assessee firm came into existence had been stated. In the letter dt 16th Aug., 1976 it had been stated that the licence granted by t....
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....das & Partners consisting of 19 partners. The death of partner Sri. Rajkumar which took place on 6th June, 1975 had been duly intimated to the excise authorities. The firm was found to be otherwise genuine. The profits had been distributed amongst the partners in the prescribed profit sharing ratio. The terms of the partnership deed had been fully complied with. The ld. Commr., set aside the ITO's order on the only ground that the licence had been granted to M/s. Ramsarandas & Co., without making enquiry about the constitution of this entity from the excise authorities and, therefore, grant of registration to the assessee was not proper. Sri Ranka urged that the Commr's order was obviously incorrect on facts and it was also bad in law. The ld. Deptl. Representative, on the other hand, relied upon the orders of the ld. Commr. 6. We have considered the facts and the rival submissions. At the very outset, we must say that the power under s. 263 given to the Commr. to revise an order passed by the ITO is a quasi-judicial power. It, therefore, follows that in making an order under this section, the Commr., must pass a speaking order giving reasons. This view has been taken in the Sup....
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....been placed before us. This certificate was issued by the Assistant Excise Officer, Sriganganagar. It is mentioned therein that for the period 1st April, 1975 to 31st March, 1976 the licence for sale of country liquor was issued to Shri Ramsarandas & Co. The assessee, however, in the course of the assessment proceedings themselves had written to the ITO the letter dt. 16th Aug., 1978 in which the circumstances under which the assessee came into existence had been stated and certain information as required by the ITO with regard to the claim for registration was filed. The relevant portion of this letter reads as follows:- "The assessee firm is constituted by 19 partners. The partnership deed was executed on 26th day of May, 1975 and was filed in the office on 29th March, 1976 with Registration application on Form No. 11. One of the partners. Sri Rajkumar expired on 6th June, 1975 and a second partnership deed was executed on 20th day of July, 1975 and this deed was filed in the office on 31st day of March, 1976 together with the application on Form No. 11 A. The licence granted by the Department showing the names of the partners to whom the Theka was given is enclosed herewith. ....
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....m the licence had been given by the Excise authorities. He also found that the profit was distributed amongst the partners in the prescribed profit sharing ratio. He also found on examining the facts that the assessee firm was a genuine firm. The application for registration had been made in proper form well within the prescribed time limit. This being the position, we cannot hold that the ld. Commr. was not right in his conclusion that the order passed by the ITO was erroneous and also prejudicial to the Revenue. In fact as stated in the foregoing, the ld. Commr. merely took cognizance of the certificate dt. 19th Aug., 1976 saying that the licence was granted to Shri Ramsarandas & Co., but overlooked other material on the record which showed that, in fact, the licence had been given to M/s. Ramsarandas & Partners consisting of 19 partners. The intimation of the proceedings under s. 263 was thus misconceived. 9. We also agree with the ld. Counsel for the assessee that the order passed by the Commr., was bad in law. The Commr., held the ITO's order under s. 185 to be erroneous and also prejudicial to the Revenue merely because in the certificate dt 19th Aug., 1976 it had been sai....