Law:

Section:

Sections 184 and 185 of the income-tax act, 1961 read with rules 22 to 25 of income-tax rules, 1962-Firm-Renewal of registration-ITO refused registration under section 185 for assessment year 1967-68 and continuation of registration under section 184(7) for assessment year 1968-69-Firm treated as unregistered firm-Refusal upheld by aac noting that appeal against order under section 184(7) not maintainable-Tribunal reversed AAC's decision and directed ITO to take status as registered firm for both assessment years-Whether tribunal correctly held in law that appeal against order under section 184(7) maintainable-Held, yes-Whether tribunal had rightly directed ITO to take status as registered firm for assessment year 1968-69-Held, on facts, no Facts The ITO refused registration to the assessee-firm under section 185 for the assessment year 1967-68 and continuation of registration under section 184(7) for assessment year 1968-69 and made assessments in the status of unregistered firm. The assessee's appeals before the AAC were unsuccessful. The AAC held that the appeal against the order under section 184(7) was not maintainable and dismissed the other appeal on the ground that there was no merit in it. On further appeal, the Tribunal accepted the assessee's claim for registration for both the assessment years. In relation to the assessment year 1968-69, the Tribunal held that the AAC was not justified in dismissing the appeal as incompetent. The Tribunal further observed that it would have normally remanded the case to the AAC for redeciding the same on merit but, in view of their earlier direction to the ITO to take the status of the assessee as registered firm for the assessment year 1967-68, it was not necessary to refer the case back to the AAC. On reference, the Revenue contended that no appeal had been provided under section 246 against an order under section 184(7) and that the assessee firm had, therefore, no right to file an appeal. Held 1. From the scheme of sections 184 and 185, the ITO is required to decide the application for registration within the assessment year for which the registration is claimed. If the registration is granted, the firm is then…

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