9911796707
TMI Blog1978 (5) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the case, registration was rightly refused under rules 2 and 6B of the Income-tax Rules ? " Here, by this application under section 66(2) of the Act, the assessee had tried to introduce various other questions ; but it is not necessary for us to deal with such additional questions. The Income-tax Appellate Tribunal, on the facts and in the circumstances of the case, found that the partnership styled as " M/s. Mukhi Mulchand Sitaldas, Chakarbhata ", was not a genuine firm and, therefore, no registration could be granted under section 26A of the Indian Income tax Act, 1922. Whether a partnership is genuine and actually exists or not with the constitution as specified in the deed of partnership, is essentially a question of fact. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther partner, Dhalchand, was also not produced before the Income-tax Officer, though required. During the course of the assessment proceedings, the aforesaid Chijumal appeared before the Income-tax Officer on October 17, 1964, in his capacity as a complainant, and stated that the firm was engaged in suppression of sales and evasion of income-tax and sales tax. The Income-tax Officer found that the firm had maintained three different sets of accounts. One of these sets was, admitedly, called a "fictitious set ". In one set, the purchases were found to have been recorded at Rs. 2,64,770 and in another set, the purchases were found to have been recorded at Rs. 4,47,335. In one set of books, on the basis of which the return of income was file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee that the reasons given by the Income-tax Officer did not warrant an inference that there was no genuine firm in existence. It was urged that the firm was dissolved some time in 1961 and enquiries were conducted in the year 1964. Because of the disputes among the partners, the whereabouts of all the partners could not be intimated to the Income-tax Officer. One of the partners, Chijumal, had himself, however, appeared before the Income-tax Officer. It was, therefore, urged that the non-availability of the partners after a long lapse of time should not have been made a ground for the refusal of registration. It was also urged that though the sales, as originally shown, may have not been correct, but that, by itself, could not establi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If a firm makes profits which are not shown in the books of accounts and the undisclosed profits are not distributed among the partners, then the Income-tax Officer has discretion to refuse to renew the registration of the firm under section 26A of the Indian Income-tax Act, 1922." In that case, there was deliberate concealment of a portion of the profits which were not shown in the books of account. The Allahabad High Court rightly distinguished the decision in Commissioner of Income-tax v. Madanlal Chhaganlal [1963] 50 ITR 477 (MP) that, whatever were the profits ascertained by the partnership had, in fact, been distributed and further that there the court did not go into the question whether an Income-tax Officer has discretion under r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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