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TMI Blog1985 (9) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... e declaration belatedly made. He, therefore, assessed the firm as an unregistered firm. He also did not allow an expenditure of Rs. 6,209 incurred for levelling of land. The assessment order was made under section 143(3) of the Act and notice was issued under section 274 read with section 273 for filing an untrue estimate of advance tax and also for late filing of the return. Demand notices were directed to be issued accordingly. The assessee, feeling aggrieved by this order, preferred an appeal to the Appellate Assistant Commissioner. In appeal, the amount of Rs. 6,209 spent on levelling of the land was allowed as a business deduction. However, so far as the status of the firm is concerned, the Appellate Assistant Commissioner held that a composite appeal under section 246(1)(c) as well as section 246(1)(j) could not lie. So far as the appeal under section 246(1)(c) was concerned, he allowed the same by permitting the expenditure of Rs. 6,209 as a business deduction. In so far as the appeal concerned the rejection of renewal of registration, the Appellate Assistant Commissioner came to the conclusion that it lay under section 246(1)(j) of the Act and ought to have been separatel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) of sub-section (1) or under sub-section (2) or sub-section (3) or sub-section (5) of section 185. " On a plain reading of clause (c), it would appear that an aggrieved assessee can prefer an appeal against the Income-tax Officer's order of assessment made under sub-section (3) of section 143 of the Act well as against the order determining the status under which he is assessed. Under clause (j) of sub-section (1) of section 246, the order which can be appealed against must be one under clause (b) of sub-section (1) or under sub-section (2) or (3) or (5) of section 185 of the Act. Clause (b) of sub-section (1) of section 185 deals with a case of refusal to register a firm on the Income-tax Officer not being satisfied regarding the genuineness and the constitution of the firm. In CIT v. Dineshchandra Industries [1975] 100 ITR 660, this court took the view that refusal to condone the delay for entertaining an application for renewal of registration would be appealable under section 185(1)(b) read with section 246(1)(j) of the Act. We may at once state that the court did not consider the applicability of section 246(1)(c) of the Act while deciding the said question. On the stren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Income-tax Officer had refused renewal of the registration on the ground that it was barred by limitation. After referring to the decision of the Gujarat High Court in Dineshchandra Industries' case [1975] 100 ITR 660, and approving the ratio laid down therein, the learned judges proceeded to examine whether the appeal could lie under section 246(1)(c) of the Act. After referring to the definition of " person " contained in section 2(31) and Explanation (2) to sub-section (3) of section 143, which defines the expression " status ", the court observed as under (at p. 597): " It is clear that the assessment of a firm as a registered firm or as an unregistered firm is a matter of status, and a dispute that a firm was entitled to be assessed as a registered firm and not as an unregistered one is a dispute relating to the status in which the assessee-firm is liable to be assessed. It is clearly within the ambit of clause (c) of section 246 of the Act. " Treating the effect of the Income-tax Officer's order refusing to condone the delay in the filing of the declaration in Form No. 12 as a refusal to assess the firm as a registered firm, the court held that the order was appeala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holding that the appeal to the Appellate Assistant Commissioner was under that clause. It is another matter that we have, on a construction of section 246(1)(c) of the Act also, come to the conclusion that an appeal would lie to the Appellate Assistant Commissioner under that clause as well. The moot question, however, is whether a composite appeal could lie both on the question of assessment of income under sub-section (3) of section 143 of the Act as well as on the question of the status of the assessee firm no matter whether the appeal under the former can lie under clause (c) and the latter under clause (j) of sub-section (1) of section. 246 of the Act. It must be remembered that under both these clauses, the Income-tax Officer's order is appealable to the same authority, namely, the Appellate Assistant Commissioner. It must also be borne in mind that the income-tax Officer made the assessment under sub-section (3) of section 143 of the Act under the same order under which he determined the status of the firm as unregistered. In other words, one regarding the assessment made under sub-section (3) of section 143 and the other touching on the status of the firm but by a single o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and the Tribunal adopted a highly technical approach in throwing out the assessee's appeal on the ground that a composite appeal did not lie. It is well-settled that a right of appeal conferred by the statute has to be liberally construed and when the appeal lies to the same authority, it would be too technical an approach to adopt to partly reject the appeal on the ground that a separate appeal ought to have been filed instead of a composite one. The right of appeal is by way of a remedy provided by the statute and should not ordinarily be denied to the assessee unless the law prohibits it. The Appellate Assistant Commissioner ought to have dealt with the substance of the matter rather than throwing out the assessee's appeal in so far as it related to the status on the technical ground that composite appeal could not be entertained. We are surprised to find that the Tribunal does not consider this approach of the Appellate Assistant Commissioner as technical. The Appellate Assistant Commissioner's approach in throwing out the appeal which undoubtedly lay to him on the sole ground that a composite appeal is not maintainable can only be described as hyper-technical and in the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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