9911796707
TMI Blog1994 (11) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... no genuine firm in existence for the various reasons as discussed in the assessment order passed under section 143(3) in the case of the assessee for the aforesaid assessment year. According to the Assessing Officer, it was the assessee who carried on wholesale business in sarees, the income of which was diverted to the trust M/s. K.C. Dilip Kumar Pvt. Family Specific Trust. The learned CIT (Appeals) on the other hand was of the view that the profits earned were not distributed in accordance with the constitution so specified in the deed of partnership. This was for the reason that the income shown in the hands of the trust was held to belong to the assessee-firm. Another reason stated for disallowing the claim of registration was that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer was well within his right to enquire into the genuineness of the firm and then refused the registration. The ratio in the case of Khanjan Lal Sewak Ram squarely applies to the case of the assessee whereas the other cases cited are distinguishable. In the circumstances there is no merit in the arguments of the learned AR that the assessee's claim for registration was wrongly rejected. Various decisions were relied upon. 4. We have considered the rival submissions. Examining the assessee's claim under the 1961 Act, we find that a firm may be assessed as registered or to be treated as unregistered one. An application for registration is to be made under section 184 and the procedure to be followed on receipt of application, is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not related as spouse or minor child. 4. We do hereby certify that the profits (or loss, if any) of the previous year were/will be ---------------------------------------------------------------------------- divided or credited as period upto the date of dissolution were/will be shown in the Schedule and that the information given above and in the Schedule is correct. Note : Where the application is made after the end of the previous year, the words ' upto the date of this application ' must be deleted. " Similar certificate was prescribed in paragraph 3 of the form of application for registration prescribed under rule 3 of the Income-tax Rules, 1922. From the above it is clear that the certificate to be given by the firm is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Asstt. Commissioner. There being a difference amongst the Members of the ITAT. It was referred to the Third Member who agreed with the Judicial Member that the firm was not entitled to renewal of registration. When it came to the Supreme Court, their Lordships of Supreme Court held that as the firm gave wrong certificate that the profits earned by the firm had been divided or credited in the manner shown in the application, the assessee was not entitled to renewal of registration. This was for the reason that it did not comply with the conditions prescribed in paragraph 3 of rule 6. While holding so, it was also held that the reason behind rule 6 was that at the relevant time the registered firm was not taxable, and only the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Shri Setha Ram Dhanvir Singh, the shares were divided at variance with the ones specified in the instrument of partnership. So facts are distinguishable. In the case of Kanhaiya Lal Radha Krishna v. CIT [1965] 55 ITR 568 (All.), It was found by the Assessing Officer that the assessee carried on two undisclosed businesses at two more places, the profit of which was not shown by it. On the facts it was held by their Lordships of Allahabad High Court that the certificate given in clause 3 of the application was incorrect which was deliberate and dishonest on the part of the assessee. Accordingly the claim of the registration was refused. As against this, we find that in the case of Addl. CIT v. Chanderbhan Harichand Co. [1980] 126 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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