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TMI Blog1978 (12) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... gistration with effect from 1965-66 onwards was erroneous and prejudicial to the interests of the revenue. Since assessment years 1965-66 to 1967-68 were beyond the prescribed period of limitation for action under s. 263(1) of the I.T. Act, he issued notices for the assessment years 1968-69 and 1969-70. After hearing the assessee he concluded that Chandi Prasad attained majority on 4th January, 1964, and had been made a full-fledged partner of the firm. In view of the decision of this court in Ganesh Lal Laxmi Narain v. CIT [1968] 68 ITR 696, and as there has been a change in the constitution of the partnership, since no fresh partnership deed had been drawn up, the renewal of registration was erroneous and prejudicial to the interests of the revenue. He, therefore, cancelled the registration for both the aforesaid assessment years, and directed the ITO to recompute the tax demand treating the firm as unregistered. Aggrieved by this order of the Commissioner dated 25th February, 1971, the assessee went up in appeal to the Tribunal. The Tribunal upheld the findings of the Commissioner. It appears that the assessment order for the year 1968-69 dated 8th July, 1969, was taken up b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. On facts it was held that the original instrument of partnership did not provide for the ascertainment of the shares after the minor attained majority and became a full partner. In this case there was a change in the shares, but the original instrument did not evidence it. The firm was not entitled to continuance of registration. The Full Bench decision, therefore, upheld the conclusions of the Commissioner of Income-tax as well as the Tribunal, but on different grounds. In this view it becomes necessary to examine the question of law, whether an order granting registration can merge in an order passed in appeal against the assessment order. As already noticed, this question has become material because under s. 263(1) the Commissioner can interfere with an order passed by the ITO. He cannot do so in relation to an appellate order. On behalf of the assessee it was submitted that when the assessee took the assessment order in appeal, the order granting renewal of registration, which was part of it, also became merged in the appellate order, and so was outside the purview of the revisional jurisdiction of the Commissioner. The question for consideration is whether an or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at the instance of the assessee under s. 246(j) of the I.T. Act, 1961. In the aforesaid decision it was held that the order refusing to renew registration was appealable under cl. (c) of s. 246 of the Act as well. Thus, an assessee can appeal against an order refusing to renew registration. But no appeal has been provided against an order granting registration. The assessee is under no obligation to apply for registration. It is his option. If he exercises the option and applies for registration, and the same is granted, he can possibly be not aggrieved against Such an order. That is why no appeal has been provided against an order granting registration. The department has, of course, no right of appeal against such an order. Apparently the order granting registration is outside the purview of the AAC while exercising appellate powers. In the aforesaid decision of Amritlal Bhogilal's case [1958] 34 ITR 130, the Supreme Court emphasised this. It ruled (p. 138): " The powers of the Appellate Assistant Commissioner, however wide, have, we think, to be exercised in respect of the matters which are specifically made appealable under section 30(1) of the Act. If any order has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order the AAC had jurisdiction to look into and decide upon findings given not only against the assessee but also in his favour, because the entire subject-matter of the assessment order was within his jurisdiction. This case is clearly distinguishable. The question whether an assessment order can encompass the order granting registration was neither raised nor decided there. The case was confined to the scope of appeal against an assessment order in relation to the various findings in the assessment order. Learned counsel for the assessee then invited our attention to a circular issued by the Board of Direct Taxes in 1962 intimating that in a case where a minor attains majority, registration should not be refused on the ground that a fresh instrument of partnership was not drawn up. It was stressed that the circulars issued by the Board were binding on all I.T. authorities. That may be so. But this circular of the Board was modified by another circular dated 20th March, 1969, in which this position was not held to obtain in Uttar Pradesh. The Board's circular dated 20th March, 1969, having clarified the position, the Commissioner was entitled to interfere subsequent to that d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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