GOPAL STORES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AT the instance of the assessee, the following questions have been referred under S. 256(1) of the IT Act, 1961 (for short, "the Act"), for the opinion of this Court :

(2.) THE assessee, a firm registered under the Partnership Act, filed its return of income for the asst. yr. 1982 -83, on 6th Oct., 1982. In September, 1983, the assessee -firm was directed by the ITO to comply with the notices issued under S. 143(2) of the Act on various dates, viz., 3rd Sept., 1983, 18th Oct., 1983 and 12th Jan., 1984. The assessee sought adjournments on all dates except on 18th Oct., 1983. The ITO, thereafter, issued notice under S. 142(1). The assessee -firm was further directed on various dates by the ITO to comply with the notices issued under ss. 143(2) and 142 (1) of the Act. The assessee sought adjournments on all the dates except on 24th Jan., 1985. Thereafter, on 22nd Feb., 1985, the ITO issued a letter to the assessee as regards the consignment received by the assessee -firm from Rangapara Railway Station and ABC Ltd., Rangapara, and the assessee was directed to produce books of account in respect of those transactions on 22nd Feb., 1985. The ITO, on 1st March, 1985, intimated the assessee that the assessment was being completed under S. 144 of the Act and notice under S. 186(2) was issued directing the assessee - firm to show cause on 18th March, 1985, as to why the registration of the firm should not be cancelled. On 12th March, 1985, the assessee -firm submitted a letter to the ITO in pursuance of the show -cause notice. Thereafter, on 18th March, 1985, the representative of the assessee -firm appeared before the ITO and informed him that the accountant of the firm while travelling from Tezpur to Rangapara lost the books of account and lodged an ejahar with the GRPF, Rangapara.

(3.) THE Revenue preferred an appeal before the Tribunal, Gauhati, challenging the order passed by the CIT(A) and submitted that there had been deliberate default on the part of the assessee -firm to comply with the requirement of different notices issued by the ITO. After hearing both sides and on perusal of the order and other connected papers, the Tribunal held that the firm committed default as specified in S. 144 of the Act and, therefore, the ITO need not consider the genuineness of the firm and the best judgment assessment would also involve cancellation of registration, as the provision was mandatory. The Tribunal further held that the CIT(A) was not justified in giving the above direction to the ITO and, therefore, allowed the appeal. The Tribunal also considered the order dt. 28th Nov., 1985, rendered by the CIT(A) in the quantum appeal against the assessment order made under S. 144 of the Act.