COMMISSIONER OF INCOME TAX Vs. ELECTRICAL ENTERPRISES

JUDGEMENT

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

(2.) Briefly stated, facts giving rise to the present reference are as follows : While making the assessment for the asst. yr. 1977-78, the ITO rejected the assesses opposite party's application for registration under Section 185(1)(b) of the Act in the following manner:

(3.) We have heard Shri A.N. Mahajan, learned counsel appearing for the Revenue. Nobody has put in appearance on behalf of the assessee, opposite party. The learned counsel for the Revenue submitted that against the order passed under Section 185(1)(b) of the Act, an appeal lies under Section 246 of the Act. Separate appeal lies against the order of assessment. Thus, the assessee, opposite party ought to have filed two separate appeals even though the order was passed on the same date and the registration was refused in the order of the assessment itself. He thus, submitted that the AAC was not justified in allowing the registration in the appeal filed against the assessment order. The submission is misconceived. Under Section 246 of the Act, an appeal lies against the assessment order as also against the status under which the assessee is assessed. By declining to grant registration, the status of the assessee has been changed and, therefore, in the appeal filed against the assessment order, question of status under which the assessee has been assessed can very well be gone into. In the case of CIT v. Rupa Traders (1979) 118 ITR 412 (Cal), the Calcutta High Court has held that: