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TMI Blog1989 (8) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... ment order dated 23-1-85 in which the Income-tax Officer determined the total income of the assessee from its business at Rs. 22,000. The status of the assessee was determined as that of unregistered firm. I may mention that the assessments were completed against the assessee for assessment year 1980-81 on 11-3-83 and for assessment year 1981-82 on 28-3-84 also under sec. 144. Admittedly the assessee-firm filed its Form No. 12 on 30-6-82. The assessee was granted initial registration u/s. 185 even during assessment year 1972-73 on 24-2-73. Since then onwards it was granted continuation of registration until and including assessment year 1979-80. As already stated for assessment years 1980-81 and 1981-82 the assessee courted ex parte assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AAC dismissed appeal filed by the assessee both as regards the quantum as well as with regard to the status accorded to it. The second appeal filed by the assessee is directed against the order of the AAC. As already stated the learned counsel for the assessee gave up his appeal is regards the quantum aspect and he confined his arguments only to attack the legality of the AAC's order with reference to the status accorded to the assessee-firm. According to Shri K.C. Devdass, the genuineness of the firm was never in dispute and Form No. 12 having been filed for the relevant assessment year quite in time viz., on 30-6-1982, the Income-tax Officer ought to have granted continuation of registration to the assessee-firm. Sri K.C. Devdass cited b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age 378 : " Held, that there was nothing in the order of the Tribunal to show that there had been any change in the constitution of the firm or readjustment of the shares of the partners in the existing firm and the mere fact that the firm had not been allowed the benefits of continuance of registration during the immediately preceding year 1966-67 was not sufficient legal justification for the ITO to refuse renewal of registration of the firm for the year 1967-68. The order of the ITO refusing to renew the registration of the firm of the year 1967-68 was without jurisdiction and should be quashed. " 2. On the strength of the above decision Sri K.C. Devdass submitted that simply because the assessee courted ex parte assessments for assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a case even the provisions of section 186(2) do not apply. But in cases where the registration was granted within a period of 8 years, to such cases only the cancellation of registration can be considered under section 186(2). In support of his submission which resulted from a conjoint reading of sub-sections (1) and (2) of section 186 the learned counsel did not cite any decision but he submitted that it is the obvious meaning which would flow from such a reading of sub-sections (1) and (2) of section 186. In any event the learned counsel contended that the present is a case where the ITO did not apply the provisions of section 186(2) of the I.T. Act as he did not issue the notice contemplated under sub-sections (1) and (2) of section 186 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Allahabad High Court in Radha Kishan Banwarilal's case I have to hold that the provisions of section 185(5) can be invoked only to the case of initial grant of registration and not to a case where continuation of registration was prayed for. In this case the assessee-firm wanted continuation of registration and not initial registration. The initial registration to the assessee-firm was granted way back on 24-2-73 for assessment year 1972-73. Now we are concerned with the assessment year 1982-83. Further, in view of the decision of Purusottan Lal Kishorilal's case the fact that the assessee firm courted ex parte assessments under section 144 of I.T. Act for the immediately preceding assessment years viz., 1980-81 and 1981-82 is not a bar to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year as is mentioned in section 144, the (Assessing) Officer may cancel the registration of the firm for the assessment year after giving the firm not less than fourteen days' notice intimating his intention to cancel its registration and after giving it a reasonable opportunity of being heard. " 6. I am not going to consider that wide proposition canvassed for the assessee as I felt that the assessee should succeed in this appeal as the provisions of section 185(5) do not apply and as the provisions of section 186(2) are not either invoked by the ITO or its terms sought to be applied to the assessee by the ITO. Under sub-section (2) of the section 186 before the ITO can consider cancellation of the registration of the firm full ..... X X X X Extracts X X X X X X X X Extracts X X X X
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