1993 (12) TMI 44 - HC - Income Tax

Issues Involved:
1. Validity of the fresh partnership deed dated July 1, 1990.
2. Entitlement of the petitioner to relief against the reconstituted firm's income-tax return filings.
3. Legitimacy of the petitioner's representations/applications to the Income-tax Officer.
4. Procedure and requirements for registration of a firm under the Income-tax Act.
5. Genuineness of the reconstituted firm and its registration application.

Issue-wise Detailed Analysis:

1. Validity of the Fresh Partnership Deed Dated July 1, 1990:
The petitioner, Madan Mohan Paul, contends that the initial partnership deed dated October 1, 1980, still subsists and that the firm, Messrs. Allied Metal Products, was never dissolved. He alleges that respondents Nos. 4, 5, and 7 manipulated a fresh partnership deed dated July 1, 1990, excluding him from the partnership. However, the court noted that the petitioner had expressed his desire to retire from the partnership and confirmed his retirement effective June 30, 1990. The court did not find sufficient grounds to invalidate the fresh partnership deed.

2. Entitlement of the Petitioner to Relief Against the Reconstituted Firm's Income-tax Return Filings:
The petitioner sought a writ of mandamus to prevent the reconstituted firm from filing income-tax returns without affording him an opportunity of hearing. The court held that a firm, whether registered or not, is an assessee under section 2(7) of the Act and is obligated to file returns under section 139. The court emphasized that the filing of returns is a statutory obligation and cannot be restrained. The contention that the return filed by the reconstituted firm is non est was deemed a matter for tax authorities to adjudicate.

3. Legitimacy of the Petitioner's Representations/Applications to the Income-tax Officer:
The petitioner argued that his representations/applications to the Income-tax Officer should be decided before considering the registration application of the reconstituted firm. The court found that many of the petitioner's demands were motivated by ulterior purposes and were not statutorily maintainable. The court emphasized that a mandamus could only be issued if a legal duty and corresponding right under the statute were demonstrated, which was not the case here. The representations were more in the nature of complaints and did not warrant a statutory decision.

4. Procedure and Requirements for Registration of a Firm Under the Income-tax Act:
The court outlined the statutory framework for the registration of firms under sections 184 to 186 of the Act. It noted that the Assessing Officer is required to inquire into the genuineness and constitution of the firm as specified in the partnership instrument. The court clarified that the right to obtain registration is a statutory right, and the Assessing Officer must grant registration if the requirements are met. The court rejected the petitioner's submission that the application for registration could not be entertained.

5. Genuineness of the Reconstituted Firm and Its Registration Application:
The petitioner questioned the genuineness of the reconstituted firm. The court refrained from commenting on the merits of this contention as the matter was sub judice before the Income-tax Officer. The court observed that the Assessing Officer is expected to consider all legally permissible materials during the inquiry under section 185. The court noted that the petitioner had already been informed that the assessment proceedings and registration matter had not yet been taken up, addressing his complaint about having his say in the matter.

Additional Observations:
The court mentioned the provision of section 185(6) regarding deemed registration of a firm in certain circumstances. If the reconstituted firm had been granted deemed registration, the court's observations would not affect the inquiry under section 185.

Conclusion:
The writ petition was rejected in limine. The court also refused the petitioner's oral request for a certificate for leave to appeal to the Supreme Court, stating that the case did not involve any substantial question of law of general importance.

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