1991 (3) TMI 39

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....tered firm. After hearing the petitioner, examining the books of account, obtaining various clarifications at such hearings, the assessment proceedings were completed and final assessment orders were awaited. It appears that, on December 17, 1986, House No. 12, Daulatganj, Indore, was raided. Certain stocks and other things were seized from the premises. On the basis of bank pass-books found on the premises, a garnishee order prohibiting the Canara Bank from releasing the money in the accounts was passed under purported exercise of powers under section 132(3) of the Income-tax Act, 1961 (for short" the Act"). The aforesaid orders were challenged before the High Court and the High Court quashed the same. On June 10, 1987, respondent No. 1....

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....ous Petition No. 318 of 1988 related to the assessment years 1983-84, 1984-85 and 1985-86. In this case, respondents Nos. 4 and 5 were also included as members of an association of persons. Miscellaneous Petition No. 420 of 1989 related to the assessment years 1979-80 to 1982-83. In this case, Messrs. Sarvottam Supari Stores, 5, Jawahar Marg, Indore, and Messrs. Hilman Traders, 12, Daulatganj, Indore, Messrs. Sarvottam Supari Stores, 167, Ranipura, Indore and Messrs. Hilman Traders, 96, Siyaganj, Indore, were treated to be members of an association of persons. All these petitions were decided by this court by a common order on January 29, 1990 (Milan Supari Stores v. ITO [1990] 184 ITR 106). The petitioner received a notice on March 15, ....

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....e material facts of the firms in the previous years. The court has also held in this decision that the income-tax authority had completely ignored the provisions of section 186 of the Act before passing the impugned order. In that case, under section 186 of the Act, the Income-tax Officer had to serve a notice on the firm if he was of the opinion that in fact no genuine firm was in existence before its registration as such. If the reply to the notice was not satisfactory, the registration of the firm could be cancelled for that assessment year or it could be cancelled under sub-section (2) of section 186 of the Act. The court further observed that as the first step before passing an order treating the petitioner and the respondents' firm as....