TaxTMI 
TaxTMI 
TaxTMI 
2005 (5) TMI 49
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....g question for decision by this court, as according to the Tribunal, the single question will cover the entire gamut of controversy raised by the assessee: "Was the Appellate Tribunal justified and correct in law in the facts and circumstances of the case, in holding that the cancellation of registration was valid under the provisions of the Income-tax Act?" We have heard Sri Kochunni Nair, senior counsel appearing for the assessee and Sri P.K.R. Menon, senior standing counsel appearing for the respondent. The short question to be considered is whether the Tribunal was justified in sustaining the order of the Assessing Officer cancelling the registration granted to the assessee-firm under section 186(1) of the Income-tax Act. The facts on....
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.... originally granted or cancellation of registration under section 186(1) is justified or not. The assessee was granted renewal in the original assessment completed under section 143(3) of the Act based on Form No. 12 declaration filed by the assessee in terms of section 184(7) of the Act. However, when the Assessing Officer noticed that the assessee did not carry on any business during the previous year and had in fact closed the business, he issued notice and cancelled the registration under section 186(1) of the Act. It is this order which was carried in appeal by the assessee before the first appellate authority and again before the Tribunal, without any success. Counsel for the assessee contended that the cancellation of registration ....
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....ntion is that the officer himself has opted to assess tax on the petitioner as a registered firm under section 183(b) of the Act and so much so, the Department cannot decline registration to the firm. Counsel for the assessee also relied on the decision of this court in CIT v. Jacobs [1986] 160 ITR 570 whereunder this court held that temporary cessation of business or a lull in the business should not be taken as closure of business or non-existence of partnership. However, the assessee's case is not cessation of business for a short period, but this is a case of complete stoppage of business and later the assessee sold the business assets including plant and machinery. Therefore when the assessee sold the plant and machinery it cannot be s....
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....t in existence if it is a bogus or not a genuine one, or if in law the constitution of the partnership is void. The jurisdiction of the Income-tax Officer is, therefore, confined to the ascertaining of two facts, namely, (i) whether the application for registration is in conformity with the rules made under the Act, and (ii) whether the firm shown in the document presented for registration is a bogus one or has no legal existence." We are of the opinion that there is no difference between eligibility for grant of registration and the ground for cancellation of registration. If a firm is not entitled to registration either on account of the fact that it has no legal existence or is not genuine or is bogus, then grant of renewal of registrat....