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Issues: Assessment as an unregistered firm, failure to file prescribed form, delay in filing declaration, competency of appeal before AAC, exhaustion of remedies under the Act, correctness of Division Bench judgment.
Analysis: The judgment involves a case where a registered firm was assessed as an unregistered firm due to its failure to file the prescribed Form No. 12 within the specified time under the Income Tax Act. The firm's explanation for the delayed filing was not accepted by the Income Tax Officer (ITO). However, the Income Tax Appellate Tribunal disagreed with the lower authorities and ruled in favor of the assessee, stating that there was no material to reject the firm's plea regarding its belief about the filing requirements. The Tribunal also dismissed the firm's appeal on the grounds of competency, which is challenged in this petition. Regarding the competency of the appeal before the Appellate Assistant Commissioner (AAC), the Tribunal's decision was based on the belief that the appeal before the AAC was not competent, thus rendering the appeal before the Tribunal also incompetent. However, referencing a Division Bench judgment, it was established that the appeal before the AAC was indeed competent, leading to the setting aside of the Tribunal's decision on this matter. The issue of exhausting remedies under the Act was raised by the respondents, arguing that the petitioner should have availed the remedy of reference against the Tribunal's order under section 256 of the Act before approaching the High Court under Article 226. The judge, after considering relevant Supreme Court judgments, concluded that in the given circumstances of the case, the petitioner was not obligated to exhaust all remedies before seeking relief under Article 226. Furthermore, the correctness of the Division Bench judgment was questioned by the respondents, but the judge, sitting singly, expressed adherence to the said judgment, especially since it had considered judgments from different High Courts. Consequently, the impugned part of the Tribunal's order was set aside, allowing the petitioner's appeal before the Appellate Tribunal. In conclusion, the petitioner succeeded in the case, with the Tribunal's decision on competency being overturned, and the appeal before the Appellate Tribunal being allowed. The judge ruled in favor of the petitioner, emphasizing the importance of the Division Bench judgment and dismissing the objections raised by the respondents regarding the exhaustion of remedies under the Act.
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