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Issues:
- Refusal to renew registration under s. 184 of the I.T. Act for assessment year 1975-76 - Rejection of application for continuation of registration under s. 184(7) of the Act - Appeal against the order refusing renewal of registration - Validity of reasons given by the ITO for refusing registration Analysis: The petitioner approached the court aggrieved by the ITO's refusal to renew registration under s. 184 of the I.T. Act for the assessment year 1975-76. The ITO rejected the application for continuation of registration under s. 184(7) of the Act, citing various reasons. Firstly, the ITO questioned the validity of the application form dated 31st May, 1975, filed on 2nd June, 1975, based on the partners' residence in different locations. Secondly, the ITO raised concerns about the printing date of the form and the sequence of signatures, suggesting that the forms for 1974-75 and 1975-76 were signed simultaneously. Lastly, the ITO contended that the declaration signed by partners before the end of the accounting year was not valid. The AAC and CIT upheld the ITO's decision on merits, leading to the petitioner filing applications under s. 264 of the Act before the Commissioner, who also supported the ITO's decision. The High Court analyzed the reasons provided by the ITO for refusing to continue registration and found them invalid. The petitioner had followed the same accounting year as the previous year, and the form was signed by partners within a reasonable timeframe, despite being dated 31st May, 1975, and filed on 2nd June, 1975. The Court dismissed the ITO's inferences as conjectural and lacking evidential basis. Additionally, the Court emphasized that the application for registration was filed in time and met all necessary requirements, with no doubts raised about the genuineness of the firm. The Court highlighted that under s. 184(7), registration granted to a firm for one assessment year automatically continues for the subsequent year if there are no changes in the firm's constitution or partners' shares, and the application is timely filed. Since the petitioner's application fulfilled these conditions, the ITO was obligated to grant registration. The Court deemed the rejection of the application on arbitrary and imaginary grounds, without questioning the firm's genuineness, as contrary to the law. Consequently, the Court allowed the petition, quashed the orders of the relevant parties, and directed the ITO to grant registration to the petitioner in accordance with the law, awarding costs to the petitioner.
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