TaxTMI 
TaxTMI 
1978 (11) TMI 38
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....newal of registration had been received by the revenue authorities on the 27th February, 1953. He, therefore, directed the ITO to dispose of the application for renewal of registration according to law and allowed the assessee's appeal. He construed the order of the ITO to be a consolidated order under s. 23(4) and s. 26A of the said Act. Being aggrieved by the order of the AAC, the revenue went up in appeal before the Income-tax Appellate Tribunal. The Tribunal found that the ITO had not considered the question of the registration at all inasmuch as he was under the belief that no application for the renewal of registration had been made by the assessee. The Tribunal found further that as no order refusing registration had been passed either under s. 26A or under s. 23(4) no appeal lay before the AAC and hence no further appeal could lie before the Tribunal. The Tribunal, accordingly, dismissed the appeal of the revenue observing that it had no power to interfere with an administrative matter, as it became, by reason of the order of the AAC. In compliance with the order of the AAC, the ITO took up the application of the assessee under s. 26A of the Act for consideration. ....
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....ion under the said section but refused registration on the only ground that there was no application for registration, i.e., under s. 26A. But by reason of the direction of the AAC, the ITO had to dispose of the assessee's application under s. 26A de novo. The Tribunal held that the ITO had to exercise his discretion under s. 23(4) at the time of making the assessment. In the instant case, having failed to exercise such discretion when the order of assessment was passed the ITO could not again exercise his power under the said s. 23(4). The assessee's application under s. 26A was found to be in compliance with the requirements of the said section and the rules thereunder. The Tribunal held that the AAC was justified in allowing the said application and directing the ITO to renew registration and allowed the assessee's appeal. On the application of the Commissioner of Income-tax, West Bengal V, Calcutta, under s. 256(1) of the I.T. Act, 1961, the Tribunal has drawn up a statement of case and has referred the following questions for the opinion of this court as questions of law arising from its order : "1. Whether, on the facts and in the circumstances of the case, the Tribunal....
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..... Mr. Sen submitted further that the powers of the ITO respectively under ss. 26A and 23(4) were distinct and independent and they could be exercised simultaneously or separately. In the instant case, when the ITO was considering the application of the assessee under s. 26A of the Act, he could also exercise his discretion under s. 23(4) as the same had not been exercised till that time. It was within his discretion to refuse registration of the firm under s. 23(4). In support of his contentions, Mr. Sen cited a decision of the Supreme Court in CIT v. Amritlal Bhogilal & Co. [1958] 34 ITR 130 for the following observations in the judgment of Gajendragadkar J. : " It is important to bear in mind that the order granting registration to an assessee-firm is an independent and separate order and it merely affects or governs the procedure to be adopted in collecting or recovering the tax found due. It is not disputed that the registration granted by the Income-tax Officer to an assessee-firm can be cancelled by him either under section 23(4) or under rule 6B. It is also clear that the Income-tax Officer's order granting registration can be cancelled by the Commissioner under sec....
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....already registered. This is the effect of the use of the word 'and' after the expression ' on the basis of such assessment' and before the words 'in the case of a firm, etc.' Having regard to the terms of the section, it is beyond controversy that the proper officer may as part of the order making the assessment to the best of his judgment also either cancel the registration, if the firm was already registered, or refuse to register it." Mr. Pal also cited a decision of the Jammu & Kashmir High Court in S. Mubarik Shah Naqshbandi v. CIT [1977] 110 ITR 217, where s. 144 of the I.T. Act, 1961, which correspond to s. 23(4) of the Indian I.T. Act, 1922, was construed. It was held by the High Court that it was mandatory on the ITO under the said section to determine the amount of tax as otherwise the assessee would be deprived of his right to appeal under s. 246(c) of the 1961 Act. On the strength of the above authorities Mr. Pal submitted that, in the instant case, the ITO must be construed to have exercised his powers under s. 23(4) at the time when he made the order of assessment and, therefore, it was not open to him to exercise such powers over again. To appreciate the con....
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....ppeal against assessment under this Act.--(1) Any assessee...... objecting to the cancellation by an Income-tax Officer of the registration of a firm under sub-section (4) of section 23 or to a refusal to register a firm under sub-section (4) of section 23 or section 26A...... may appeal to the Appellate Assistant Commissioner against...... such refusal or order : ...... (2) The appeal shall ordinarily be presented within thirty days of the payment of the tax deducted under sub-section (3A), (3B) or (3C) of section 18 or of receipt of the notice of demand relating to the assessment of penalty objected to or of the order in writing notifying the amount of total income on which the determination under sub-section (5) of section 23 was based and the apportionment thereof between the several partners or of the loss computed under section 24...... or to register a firm under section 26A ...... but the Appellate Assistant Commissioner may admit an appeal after the expiration of the period if he is satisfied that the appellant had sufficient cause for not presenting it within that period. The material provisions of s. 34 of the Act of 1922 are as follows : "34. (3) No order of as....