TaxTMI 
TaxTMI 
1993 (2) TMI 76
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....e entire assessment order passed by the Income-tax Officer under section 144 of the Act ? 2. Whether, on the facts and in the circumstances of the case and on a correct interpretation of law, the Tribunal was justified in holding that the order passed by the Income-tax Officer is not an order under section 185 and hence the same was liable to be quashed ? 3. Whether, on the facts and in the circumstances of the case and in view of the provisions of section 185(5), the Income-tax Appellate Tribunal was justified in holding that the Appellate Assistant Commissioner was right in quashing the order of the Income-tax Officer passed under section, 144 of the Income-tax Act, 1961 ?" Background facts as culled out from the statement of case draw....
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....g the quantum and directed the Income-tax Officer to make a fresh assessment, then he should have set aside that part of the assessment order also and should have directed the Income-tax Officer to reconsider the issue of refusal of registration. Though, the Tribunal found substance in the stand of the Revenue, it observed that the order of the Appellate Assistant Commissioner to the effect that to refuse registration a separate order was to be passed was also valid. It held that the same not having been done, refusal of registration suffered from infirmity and it was in the discretion of the Appellate Assistant Commissioner to set aside the order on that point also, and to direct the Income-tax Officer to reconsider the matter afresh relat....
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....of section 185 was appealable under clause (j) of section 246. Obviously, therefore, a separate order under sub-section (5) of section 185 is contemplated when refusal of registration is directed. Under subsection (5) of section 185, notwithstanding anything contained in the said section, where, in respect of any assessment year, there is, on the part of a firm, any such failure as is mentioned in section 144, the Income-tax Officer may refuse to register the firm for the assessment year. Sub-section (5) of section 185 provides that where there is on the part of the firm such failure as to entail a best judgment assessment under section 144, the Income-tax Officer may refuse to register the firm. Section 144 provides that the Income-tax Off....
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....d in a best judgment assessment, the firm may appeal under section 246 against the order refusing to register it, even on the ground on which it could have asked for cancellation of the best judgment assessment under section 144, without making an application under that section for such cancellation. (see Mannilal Sagarmal v. CIT [1957] 32 ITR 15 (All)). Obviously, therefore, the action of the Income-tax Officer in passing consolidated order of assessment and refusal of registration, and styling it as one under section 144, was not in order. As indicated above, it is open to the assessee to file separate appeals. In the case at hand, the assessee has not assailed the quantum of assessment and has challenged only the refusal of registration....