1. At the instance of the Commissioner of Income-tax, the Income-tax Appellate Tribunal has referred the following question for the opinion of this court:
' Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the Income-tax Officer had no power to cancel the registration and renewal of registration of the assessee under Section 186(1) of the Income-tax Act, 1961, in respect of the assessment years 1958-59, 1959-60 and 1960-61, when the same had been granted with regard to the aforesaid assessment years under the provisions of the Indian Income-tax Act, 1922 ?'
2. The assessee, a partnership firm, filed returns of its income for the assessment years 1958-59, 1959-60 and 1960-61 before April 1, 1962, and was assessed under Section 23(3) of the Indian Income-tax Act, 1922, for those assessments years. It also applied for registration under Section 26A of that Act for the assessment year 1958-59 and registration was granted on December 26, 1958. For the subsequent assessment years the registration was renewed by orders dated September 28, 1959, and June 7, 1960. Thereafter, by a notice dated September 7, 19~62, the Income-tax Officer called upon the assessee to show cause under Section 186(1) of theIncome-tax Act, 1961, why the registration granted for 1958-59 and renewal of registration for the next two years should not be cancelled. The assessee contended, inter alia, that the notice under Section 186 was bad in law. The Income-tax Officer, however, held that the assessee was not a genuine firm and cancelled the registration granted for the first year and its renewal for the succeeding two years. The assessee appealed to the Appellate Assistant Commissioner, and he held that the Income-tax Officer had acted without jurisdiction in making the impugned orders. The Income-tax Officer then appealed to the Income-tax Appellate Tribunal, but the Tribunal maintained the orders of the Appellate Assistant Commissioner. Two contentions were raised by the Income-tax, Officer before the Tribunal. One was that the Income-tax Officer did enjoy power under Section 186(1) to cancel the registration and the renewals effected thereafter. Alternatively, it was urged that if it be held that the Income-tax Officer had no such power, there was power in him to make the impugned orders under Rule 6B of the Indian Income-tax Rules, 1922, and the impugned orders should be construed as having been made in the exercise of that power. The Tribunal rejected both the contentions. The Commissioner of Income-tax applied for a reference to this court, and the Tribunal has referred the question set out above.
3. It is apparent that the only point for consideration is whether the power under Section 186(1) of the Income-tax Act, 1961, can be employed to cancel the registration or renewal of registration granted under the Indian Income-tax Act, 1922. There is nothing in the language of the question referred to warrant an enquiry as to whether the power exercised by the Income-tax Officer can be referred to Rule 6B of the Income-tax Rules, 1922. Learned counsel for the Commissioner has vehemently contended that both the contentions advanced by the Income-tax Officer before the Tribunal form the subject-matter of the question referred to this court, but we are unable to accept that contention. Turning then to the question before us, it is clear that the return of income for each of the assessment years under consideration was filed by the assessee before April 1, 1962. Under paragraph 2 of the Income-tax (Removal of Difficulties) Order, 1962, proceedings relating to registration of a firm are to be regarded for the purposes of Clauses (a) and (b) of Sub-section (2) of Section 297 of the Income-tax Act, 1961, as part of the assessment proceedings for the relevant assessment year. Proceedings relating to registration would include proceedings for cancellation of registration. Consequently, applying Section 297(2)(a) of the Act of 1961, the proceedings for cancellation of registration and of renewal of registration could be taken and continued under the Act of 1922. It is not disputed that if Section 297(2)(a) applied, the proceedings contemplated thereby can be taken only under the Act of1922. If that is so, no question arises of invoking the provisions of the 1961 Act, including Section 184(7) thereof.
4. Learned counsel for the Commissioner refers to Section 297(2)(k) of the Act of 1961, which provides:
' Any agreement entered into, appointment made, approval given, recognition granted, direction, instruction, notification, order or rule issued under any provision of the repealed Act shall, so far as it is not inconsistent with the corresponding provision of this Act, be deemed to have been entered into, made, granted, given or issued under the corresponding provision aforesaid and shall continue in force accordingly.'
5. It is urged that an order granting registration or renewal should be considered as an order granting recognition and, therefore, those orders made in favour of the assessee should be treated as having been made under the Act of 1961. We are doubtful whether registration can be considered as ' recognition' within the meaning of that expression in Section 297(2)(k). In any event, in our opinion, the provisions of Section 297(2)(k) cannot be construed so as to exclude or modify the operation of Section 297(2)(a). The case falls squarely within the scope of Section 297(2)(a) and the provisions of Section 297(2)(k) cannot be invoked.
6. Accordingly, we hold that the Income-tax Officer had no power under Section 186(1) of the Income-tax Act, 1961, to cancel the registration for the assessment year 1958-59 and the renewal of registration for the assessment years 1959-60 and 1960-61 granted under the provisions of the Indian' Income-tax Act, 1922.
7. The question referred is answered in the affirmative. The assessee is entitled to his costs, which we assess at Rs. 200. Counsel's fee is assessed at the same figure.