9911796707
TMI Blog1985 (4) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... e ? The facts briefly stated are as follows: In the proceeding for assessment to tax, the assessee claimed continuation of registration on the basis of declaration filed in Form No. 12 under section 184(7) of the Act. The Income-tax Officer without assigning any reason as to why the status of the assessee should be taken as association of persons, completed the assessment in the status of an association of persons. When the assessee went up in appeal before the Appellate Assistant Commissioner, he directed the Income-tax Officer to allow registration to the firm. The Revenue, in appeal before the Tribunal, contended that the case should have been sent back to the Income-tax Officer for considering the matter relating to registratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r under sub-section (2) or sub-section (3) or sub-section (5) of section 185. " Thus under section 246(c), the assessee may prefer an appeal against the amount of tax determined or the status under which the assessee is assessed. Section 246(j) provides that an appeal will lie against the order refusing to register the firm or refusing to continue the registration of firm. Thus, two separate appeals are provided for two different contingencies. In a case where the Income-tax Officer passes an order under section 185 either refusing to register the firm or refusing to continue the, registration, an aggrieved assessee may prefer an appeal and the propriety of such refusal will be gone into by the Appellate Assistant Commissioner in the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m " will not satisfy the requirements of the Act. Where an application for registration has been made or where continuation of registration is sought for, the Income-tax Officer is duty bound to determine further whether such firm should be classified as a registered firm or an unregistered firm. This is apparent from Explanation (2) of section 143 which is in the following terms: " `Status', in relation to an assessee, means the classification of the assessee as an individual, a Hindu undivided family, or any other category of persons referred to in clause (31) of section 2, and where the assessee is a firm, its classification as registered firm or an unregistered firm. The Explanation appended to section 246 is as follows: " `Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o determine whether the registration is to be granted to this particular firm or not. Similarly, when an application is made under section 184(7) for continuation of registration, the Income-tax Officer has to consider whether the provisions governing the continuation of registration have been complied with or not. In either case, the Income-tax Officer has to pass an appropriate order. He cannot determine the status of the assessee as a firm without determining whether it is a registered firm or an unregistered firm. The Act enjoins on the Income-tax Officer to pass in the case of a firm not only an order of assessment but also an appropriate order under section 185 of the Act. The order under section 185 either allowing or refusing regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 185 should not prejudice the assessee. An appeal in such case should not be held to be not maintainable on the ground that the Income-tax Officer did not pass an order under section 185. The assessee cannot be deprived of a remedy against a wrong done by the Income-tax Officer. In a case like this, the assessee will be entitled to prefer an appeal under section 246(c) objecting to the determination of the status as the controversy as to whether a firm should be treated as registered or unregistered one pertains to its status. Broadly speaking, the assessee who objects to the determination of status can urge the ground whether it should have been allowed registration or continuation of registration in an appeal preferred under section 246(c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, we are unable to accept this contention. Firstly, the scope of the powers of the Appellate Assistant Commissioner is coterminous with that of the Income-tax Officer. The Appellate Assistant Commissioner has plenary powers in disposing of an appeal. He can do what the Income-tax Officer can do and can also direct him to do what he has failed, to do. (See CIT v. Kanpur Coal Syndicate [1964] 53 ITR 225 (SC) ). Secondly, the Appellate Assistant Commissioner took note of the fact that for the earlier years the registration was allowed and as such the registration should be continued. In that view of the matter, the Appellate Assistant Commissioner was right in not sending the matter back to the Income-tax Officer for fresh determination and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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