COMMISSIONER OF INCOME TAX Vs. ROOPLAL DANCHAND

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Jaipur Bench, Jaipur ("the Tribunal" herein), has referred the following question for the opinion of this court:

(2.) THE assessment year involved is 1973-74. THE assessee is a partnership concern which during the relevant assessment year derived income from sale of country liquor. In the relevant previous year it had three partners, Svs. Rooplal Danchand, Ladharam Murandmal and Khemchand Tekchand. THE licences of the three main shops of the assessee-firm were in the names of all the three partners. Besides these three shops, there were, however, two other shops of which the licences were not in the names of all the three partners. THE Income-tax Officer held that the assessee-firm had contravened the provisions of the Rajasthan Excise Act, 1950 (No. XXIV of 1950) (which will for the sake of brevity hereinafter be referred to as " the Excise Act "), and also the licence issued thereunder to the assessee. He also found that the assessee had not filed the application for registration in Form No. 11A which was the proper form and instead, application for continuation has been filed in Form No. 12 on June 25, 1973. He, therefore, vide his order dated February 21, 1976, passed under Section 185 of the Income-tax Act, 1961 (Act No. XLIII of 1961) (" the Act " herein), made the assessment of the assessee-firm in the status of an unregistered firm. An appeal was filed before the Appellate Assistant Commissioner. THE Appellate Assistant Commissioner was of the view that the filing of the application for continuation of registration in Form No. 12 instead of Form No. 11A for registration constituted an irregularity which could be cured. By his order dated July 20, 1976, he directed the Income-tax Officer to give the assessee a month's time for filing the proper application for registration in Form No. 11 A. While disagreeing with the Income-tax Officer, the Appellate Assistant Commissioner held that there was no contravention of the provisions contained in the Excise Act and the Rajasthan Excise Rules, 1956 (" the Rules "), and the assessee-firm was valid in law and was entitled to registration. He also followed his earlier order which he passed in the assessee's case in respect of the assessment years 1971-72 and 1972-73. THE Revenue filed further appeal before the Tribunal.

(3.) WHEN the licence under the guarantee system is granted by inviting tenders, the amount of the tender accepted for the grant of license is payable by the licensee. The most important rule for our purpose is Rule 72B relating to transfer of a licence. It will be relevant to read Rule 72B, which is as under: