SHEONATH PRASAD MOTI LAL Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THIS is petitioner under article 226 of the Constitution.

(2.) THE prayer contained in the writ petition is that an order of the Income-tax Officer dated March 14, 1961, under rule 6B of the rules under the Income-tax Act may be quashed.

(3.) ON the basis of this language learned counsel for the petitioner has urged that the only ground on which a registration certificate once granted can be cancelled is that the registration certificate has been obtained without there being a genuine firm in existence. Learned counsel goes on to argue that the mere fact that the instrument of partnership may not have existed during the accounting period relevant to the assessment year for which registration is granted is not and cannot be a ground for holding that no genuine firm was in existence. The word genuine has to be contradistinguished from the word bogus" or from the word unreal. It is to the case of the income-tax department that the petitioner firm did not have the three partners which it is alleged that it had or that it had any other partner or that it was merely a faked-name under which business was being carried on by some other person. If the case of the income-tax department was based on any such fact it might have been possible to hold that the firm was not genuine. The mere fact that the instrument of partnership may not have been in existence during the relevant accounting period could be no ground for holding that the firm was no genuine. It is a different matter that initially a mistake might have been made by the income-tax department for granting registration as no instrument of partnership was in existence during the relevant accounting year but the mistake, if any, could not be corrected by cancellation of the registration under rule 6B for the very simple reason that the only ground upon which registration can be cancelled is the non-existence of a genuine firm. Such was not the case. It follows that the impugned order was wholly without jurisdiction.