9911796707
TMI Blog1984 (4) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... s against the status of firm shown in the assessee's return was void ?" The facts giving rise to this reference briefly stated are that for the assessment year 1968-69, the assessee, M/s. Munilal Shivnarain (hereinafter called " the assessee "), filed a voluntary return declaring income of Rs. 19,867. The assessee also filed an application in Form No. 11, along with the original partnership deed dated July 17, 1969. On a scrutiny, the ITO found that the assessee was not a genuine partnership firm. The grounds on which this finding was arrived at by the ITO are not relevant for our present purpose. The ITO, therefore, refused to register the firm under s. 185 of the I.T. Act. He thereupon proceeded to assess the assessee in its status as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grant of registration were completed, he may pass an order accordingly. In case he finds that the finding of the Income-tax Officer regarding the non-genuineness of the firm was correct, in that case, he may hold that the status of the firm was rightly taken as that of an association of persons. Then the Appellate Assistant Commissioner should decide the quantum appeal in accordance with law." The assessee thereupon moved two applications before the Tribunal for referring the following questions to this court : " Whether, on the facts and in the circumstances of the case, the order passed by the Income-tax Officer under section 143(3) of the Incometax Act, 1961, in the status of an 'association of persons' in pursuance of the volunta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of, this Act in respect of the total income of the previous year or previous years, as the case may be, of every person. " Thus, income-tax is charged under this Act on a person. The term " person has been defined by s. 2(31) of the Act as follows " 'person' includes : (i) an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical per son, not falling within any of the preceding sub-clauses." Therefore, the ITO can assess any of the entities falling within the term " person " and if any assessee is aggrieved of the status taken by the ITO wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capable of being assessed to tax. The three parties were not a registered firm, and they could be assessed to tax collectively as an association of individuals or as an unregistered firm if the relation between them was of partners. Now, as already stated above, for the purpose of this reference, we have to assume that there is no genuine firm and, therefore, the relations between the persons, who are assessees in this case, cannot be said to be those of partners and, therefore, the only status in which they can be assessed is that of an association of persons. However, this was not the position under the Act of 1922. There the charging s. 3 provided as under : " Where any Central Act enacts that income-tax shall be charged for any yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the only status in which this collection of individuals can be assessed is that of an association of persons. When there is no relationship of partners between these individuals, there is no question of their being assessed the status of an unregistered firm because the sine qua non of a firm is the relationship of partners between the individuals in the collection of persons. In the absence of such a relationship, a collection of persons cannot be termed as a firm and when there is no firm, it cannot be assessed even as an unregistered firm. The position under the W.T. Act is also similar to the position which existed under the old I.T. Act of 1922. There, under s. 3, wealth-tax has to be charged on the wealth of every individual, HUF a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atus other than the one in which he has filed his return and if the assessee is dissatisfied from the assessment made under s. 143(1), he can object to it under sub-s. (2) of that section or he may file an appeal as provided under s. 246(c). The learned counsel for the assessee had, however, contended that under s. 186(3) of the Act of 1961, it is provided that if registration is cancelled, the assessee has to be assessed as an unregistered firm and, therefore, the same analogy should be applicable when registration is refused. But, in our opinion, this contention cannot be accepted. The cancellation of the registration under s. 186(3) presupposes that at a particular time, there was a firm and the assessment had been made in the status o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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