ADDITIONAL COMMISSIONER OF INCOME TAX Vs. HINDUSTAN TRADERS

JUDGEMENT

(1.) The Tribunal, Allahabad, has referred the following question of law under Section 256(2) of the IT Act, 1961 (hereinafter referred to as "the Act"), for opinion to this Court :

(2.) Briefly stated, the facts giving rise to the present reference are as follows : The respondent-assessee is a firm and was assessed as a registered firm upto the asst. yr. 1964-65. For the asst. yr. 1965-66 a declaration in Form No. 12, as required by Section 184(7) of the Act, was filed. In the course of the assessment proceedings, the assessee, however, did not comply with the notice under Section 143(2) of the Act, therefore, the ITO while making assessment under Section 144 of the Act, held that, since the assessee failed to produce the account books, it is not known whether the books of account have been maintained and, if maintained, the profits have been divided according to the profit-sharing ratio prescribed in the partnership deed and as such refused to continue the registration of the firm for the asst. yr. 1965-66. Aggrieved, the respondent-assessee preferred an appeal. The AAC held that refusal to continue the registration of the firm without giving the prescribed notice of 14 days was not justified. He, therefore, directed the ITO to give to the assessee the notice of 14 days and then decide as to whether the respondent-assessee was entitled to registration for the year under appeal. Still aggrieved, the respondent-assessee went up in appeal before the Tribunal. The Tribunal held that if the ITO wanted to refuse to continue the registration of the firm, he should have given the prescribed 14 days' notice as provided under Section 186(2) and since this was not done, refusal to continue the registration of the firm could not be upheld. Hence, the Tribunal directed the ITO to allow the assessee's claim for continuation of the registration.

(3.) We have heard Sri A.N. Mahajan, the learned counsel for the Revenue. Nobody has put in appearance on behalf of the respondent-assessee.