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TMI Blog1976 (1) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... registration under s. 185(1) of the Act for the first year and under s. 184(7) for the second year. According to the assessee it was a firm consisting of either partners carrying on the business in commission agency w.e.f.1st Oct., 1968. 3. The ITO passed an assessment order on25th Feb., 1974. She did not deal with the application for registration either by a separate order or by any reference in the assessment order itself. However in the assessment order she proceeded to discuss the question of genuineness of the assessee 'firm'. She was of opinion that there was no such firm in existence and for this she adduced three reasons :-- (i) Some of the partners of the assessee firm were also partners in a firm of the same name in Jaipur in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lenged before me as being without any merit. 6. I am of opinion that in this case the proper and appropriate course is to set aside the assessment orders passed by the ITO and restore the matter back to him for a proper assessment. The assessee claims to be a firm and has applied for registration. That is the proceeding in which he has to go into genuineness and validity of the firm and arrive at a conclusion as to whether the firm is genuine or not. Assuming that there is a firm as claimed by the assessee it can be treated as a registered firm only if the application for registration is allowed. It am, therefore, of opinion that no direct relief can be given to the assessee in the present appeals and it would be fruitless to discuss the q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erely because the assessment is made on the association of person declining to accept the genuineness of the firm. In my view, where a firm applies for registration that application has to be disposed of statutorily and that is the proceeding in which the ITO should give his finding regarding the genuineness or otherwise of the firm. I, therefore, set aside the assessments in question and restore the file back to the ITO for being disposed of in accordance with law and in the light of the discussion contained herein. To put it shortly, the ITO will first dispose of the application under s. 185 and then proceed to determine the status of the assessee. 7. On behalf of the assessee it was submitted that this would mean only a duplication of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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