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Issues involved: Registration of a partnership firm for the assessment year 1964-65, jurisdiction of the Income-tax Appellate Tribunal to allow new questions to be raised.
Registration of the firm: The partnership firm, M/s. Delhi Sanitary Stores, Jaipur, was formed on January 21, 1961, with two partners. After a dissolution deed on January 11, 1963, a new firm was constituted with four partners. The firm applied for registration for the assessment year 1964-65, but the Income-tax Officer (ITO) refused registration citing delay in filing the application. The Tribunal, after considering the genuineness of the firm, directed the ITO to register the firm for the year 1964-65. The Tribunal's decision was challenged by the revenue on the grounds that the genuineness of the firm was not raised earlier and the Tribunal exceeded its jurisdiction by allowing a new point to be raised. Jurisdiction of the Tribunal: The Income-tax Act, 1961, empowers the Tribunal to pass orders after giving both parties an opportunity to be heard. The Tribunal has the authority to allow new questions to be raised in appeal, especially if it can be decided based on existing facts. The Tribunal can grant relief on grounds different from those presented before lower authorities and can even consider new pleas with or without fresh evidence. Legal precedents establish that the Tribunal's powers are not restricted by procedural rules and include the ability to pass orders on matters within the appeal's subject-matter. Decision and Conclusion: The High Court upheld the Tribunal's decision to register the firm for the year 1964-65, emphasizing that the genuineness of the firm was not in question. The existence of the firm's registration application from January 31, 1963, with a clerical error did not warrant further enquiry into the firm's genuineness. Clerical errors are typically accepted as valid reasons for condoning delays in filing applications. Therefore, the Court ruled in favor of the assessee, rejecting the revenue's arguments against the Tribunal's decision. The parties were directed to bear their own costs in the case.
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