Law:

Section:

Section 263 read with section 182 of the Income-tax Act, 1961 [Corresponding to section 33B(1), read with section 26A of the Indian Income-tax Act, 1922] - Revision - Of orders prejudical to interest of revenue - Assessee-Firm was assessed as a registered firm - However it came to notice of Commissioner that one of partners of firm was minor, accordingly, Commissioner passed an order cancelling registration and directed ITO to make fresh assessment to firm as unregistered firm - On appeal against order of Commissioner, High Court held that order of Commissioner cancelling assessee's registration was invalid - Whether since ITO's order registering firm is not appealable and so it can not become subject matter of appeal before AAC, such an order can therefore be revised by Commissioner under section 33B whenever he considers that it has been erroneously passed - Held, yes - Whether, in instant case, there was no doubt that assessee-firm could not be validly registered in view of fact that one of its partners was minor and so, on merits, Commissioner's order was clearly right - Held, yes - Whether, consequently, High Court was in error in holding that Commissioner had no authority to set aside registration order passed by ITO - Held, yes FACTS The respondent-assessee had been registered as a firm under section 26A of the Act the year 1946-47. For the assessment years 1947-48, 1948-49 and 1949-50, the ITO made the assessment on the respondent on there different dates. The assessee had applied for and obtained renewal of registration of the firm, for the above three assessment years. On an appeal, against the said assessment orders, the AAC reduced the respondent's estimated profit for first two assessment years. The respondent's appeal in regard to the assessment year 1949-50 was pending before the AAC. Meanwhile it had come to the notice of the Commissioner that the respondent firm which had been granted renewal of registration by the ITO was not a firm which could be registered under the Act as one of the partners of the firm was a minor. The Commissioner then issued notice under section 33B(1) to the assessee. After hearing the parties, the Commissioner passed…

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