COMMISSIONER OF INCOME TAX Vs. DIGVIJAY TRADERS

JUDGEMENT

(1.) ON request of the counsel for the parties, these four Misc. Civil Cases are heard as connected matters and are being disposed of by this common order.

(2.) FACTUAL matrix lies in a narrow compass. (a) Misc. Civil Cases Nos. 31 & 33 of 1993 : The applicant (CIT, Bhopal) has filed applications under S. 256(2) of the IT Act, 1961 (for short 'the Act') seeking direction to the Tribunal to state the cases and refer the undernoted common question, labelled as of law, arising out of the order dt. 31st Jan., 1992 passed by the Tribunal in ITA Nos. 339/Ind/90 and 400/Ind/90 after rejection of the applications, presented under S. 256(1) of the Act, registered as RA Nos. 103/Ind/1992 for asst. yr. 1984-85 and 105/Ind/1992 for asst. yr. 1985-86. The assessee was granted registration for the asst. yr. 1982-83 on 4th March, 1983 under S. 185 of the Act. For the asst. yr. 1983-84, the firm was granted registration again under s. 185 by the AO on 10th Jan., 1984. On 23rd Aug., 1984, action was initiated under S. 132 of the Act. Certain papers showed secret profits made by the assessee. Such secret profits were not found to have been distributed amongst the partners in these two years. The assessee had admitted that secret profits were earned. The AO, therefore, issued a show-cause notice on 4th Aug., 1986 calling upon the assessee to show cause as to why registration granted for the two years be not cancelled as provided under S. 186 of the Act as the condition for distribution of profits was violated. The assessee's explanation was not found satisfactory. The AO, therefore, cancelled the registration under S. 186 of the Act. On appeal, CIT(A) set aside the order of the AO with a direction to AO to make fresh order. The Tribunal dismissed the appeal of the Revenue. The Revenue then filed the applications under S. 256(1) of the Act. The applications were dismissed. These applications are, thus, filed under S. 256(2) of the Act. The undernoted common question is proposed in these two applications :

(3.) THE Tribunal on applications declined to state the cases and refer the questions as under :