1986 (6) TMI 32

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....ACTG. C.J.-This is a reference under section 256(1) of the Income-tax Act, 1961. The Tribunal has referred the following question for our opinion : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in upholding the Appellate Assistant Commissioner's order cancelling the Income-tax Officer's order passed under section 186(1) cancelling the regi....

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....ner did not agree with the view taken by the Income-tax Officer. He held that the Income-tax Officer had no reason to believe that there was no genuine firm in existence during the relevant year and it was a condition precedent to invoke the power to cancel the registration under section 186(1) of the Act. That view has been affirmed by the Appellate Tribunal. The Tribunal, in support of its co....

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....-tax Officer cancelled the registration expressly invoking the power under section 186(1). The appeal and further appeal preferred by the parties rested solely on the scope and construction of section 186(1) and not on the source of power located in any other provision. Even the question referred to this court specifically refers to section 186(1) of the Act. It is, therefore, not proper for us to....

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.... There is thus a limitation imposed by the Legislature for cancellation of registration. It has been confined to one ground only, that is, the firm that existed during the relevant year was not genuine. Such a power cannot be equated with the power to grant registration. For the purpose of granting registration to a firm under the Act, it is now not in dispute, that there shall be a firm valid in ....