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Commissioner of Income-tax Vs. Duli Singh and Sons - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad High Court
Decided On
Case NumberIncome-tax Reference No. 473 of 1976
Judge
Reported in(1979)11CTR(All)234; [1979]117ITR254(All); [1979]1TAXMAN32(All)
ActsIncome Tax Act, 1961 - Sections 186(2)
AppellantCommissioner of Income-tax
RespondentDuli Singh and Sons
Appellant AdvocateA. Gupta, Adv.
Respondent AdvocateA.K. Singh, Adv.
Excerpt:
- .....registration to the firm.3. the assessee felt aggrieved and went up in appeal against the order refusing registration to the firm under section 186(2) of the act. the aac set aside the order of the ito. he held that the firm was entitled to registration. firstly, because the firm was genuine and it had been, in fact, granted registration from the assessment year 1965-66, and the same was continued ever since. in the next place, it was held that before taking action under section 186(2), it was incumbent to give fourteen days' notice of an intention to refuse registration. but, in fact, no such notice was given to the assessee. both these findings were upheld by the tribunal.4. we have heard learned counsel. we find that the finding of the tribunal is that no notice under section.....
Judgment:

Satish Chandra, C.J.

1. The question of law referred for our opinion is :

'Whether the Income-tax Officer was not justified in refusing to continue registration in view of the provisions of Section 186(2) of the Income-tax Act, 1961?'

2. The assessee, which is a partnership firm, was granted registration in the year 1965-66. The registration was continuously renewed till 1968-69. For the year 1969-70 it had, within the prescribed time, filed the requisite declaration in Form No. 12. The assessee filed a return of its income. Unfortunately, the assessee could not appear before the ITO to support its return of income. The ITO passed an exparte assessment order under Section 144 of the Act. As the assessee had not appeared, he refused registration to the firm.

3. The assessee felt aggrieved and went up in appeal against the order refusing registration to the firm under Section 186(2) of the Act. The AAC set aside the order of the ITO. He held that the firm was entitled to registration. Firstly, because the firm was genuine and it had been, in fact, granted registration from the assessment year 1965-66, and the same was continued ever since. In the next place, it was held that before taking action under Section 186(2), it was incumbent to give fourteen days' notice of an intention to refuse registration. But, in fact, no such notice was given to the assessee. Both these findings were upheld by the Tribunal.

4. We have heard learned counsel. We find that the finding of the Tribunal is that no notice under Section 186(2) was given to the firm and the assessee was not guilty of any contumacious conduct. The ITO was in error in refusing to grant the registration. Further, fourteen days' notice was necessary before the ITO could act under Section 186(2) of the Act. In our opinion, the finding on the question is conclusive. The Tribunal was, in the circumstances, right in holding that the ITO was not justified in refusing to continue the registration and in cancelling it. In the result, we answer the question referred to us in the affirmative, in favour of the assessee and against the department. The assessee will be entitled to its costs, which are assessed at Rs. 200.


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