Law:

Section:

Section 184 of the Income-tax Act, 1961 - Firm - Position prior to 1-4-1993 - Assessment year 1967-68 - ITO refused registration of firm for relevant assessment year - On that basis he rejected application for continuance of registration of firm under section 184(7) for subsequent assessment year - He also made assessment on firm as an unregistered firm - Appeal filed before AAC was dismissed as not maintainable - Tribunal held that said appeal was maintainable and that registration be granted to assessee for relevant year as also subsequent assessment year - Whether order passed on declaration under section 184(7) would tantamount to refusing to resister firm under section 185 and, therefore, appeal against said order was maintainable before AAC - Held, yes - Whether since various formalities were required to be done under Act and rules before ITO could record a certificate on instrument of partnership under section 185(4), Tribunal was not justified in directing ITO to take status of assessee as registered firm for relevant assessment year and subsequent assessment year without going into said formalities to be observed under Act - Held, yes FACTS The ITO refused registration to the assessee-firm for the relevant assessment year. On the basis of the said order, he rejected the application for continuation of registration under section 184(7), for the assessment year subsequent to the relevant assessment year. He also made an assessment on the firm as an unregistered firm. The appeals filed against the orders of the ITO before the AAC were dismissed on the ground that the appeals were not maintainable. On further appeals, the Tribunal held that the appeal was maintainable before the AAC against the order of the ITO refusing to renew registration under section 184(7). It further directed the ITO to grant registration to the assessee-firm for the relevant assessment year. Consequently it accepted the claim of the assessee-firm and directed the ITO to take the status of the assessee-firm as registered firm for the subsequent assessment year. On reference: HELD In case the ITO is satisfied that during the previous year there was a genuine firm in existence, he…

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