FRONTIER CONSTRUCTION Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this reference under Section 256(1) of the INcome-tax Act, 1961 (for short, "the Act"), the following two questions have been referred at the instance of the assessee for opinion of this court :

(2.) THE assessee is a firm registered under the Partnership Act. For the assessment years 1979-80, 1980-81, 1981-82 and 1982-83, the Income-tax Officer passed orders under Section 186(1) of the Act. He found that the firm was allowed registration earlier with eight partners as named in the order passed by the Income-tax Officer. On August 30, 1985, the Income-tax Officer visited the premises of the firm and among other things he found that the signatures of the three partners recorded at the time of the search materially varied with the signatures given in the application form and papers filed by the firm. THE Income-tax Officer asked the assessee to show cause why registration should not be cancelled. On this ground the Income-tax Officer asked the assessee to produce all the partners for examination. Only two partners, namely, Ajit Barkataky and Jiten Nath, were produced for examination and their signatures were taken. THE Income-tax Officer, therefore, came to the conclusion that the firm was not genuine. As such the registration of the firm which was allowed earlier by order dated March 20, 1982, was cancelled after obtaining the approval of the Inspecting Assistant Commissioner. THE Income-tax Officer also observed that the cancellation order would have effect for the assessment years 1979-80, 1980-81, 1981-82 and 1982-83.

(3.) THE assessee requested the Tribunal to refer the aforesaid two questions for opinion of this court. Hence, the present reference.