Law:

Section:

Section 182, read with section 256 of the Income-tax Act, 1961 - Firm - Position prior to 01-04-1993 - Assessment years 1973-74 to 1976-77 - Assessee-firm submitted application for registration which was rejected by ITO on ground that no genuine firm came into existence - AAC, however, reversed ITO's order - Tribunal restored ITO's order holding that assessee was not a genuine firm in view of fact that a general power of attorney containing sweeping powers was executed by partners of firm in favour of one 'K' and that conferring of such powers on attorney was contrary to provisions of section 4 of Indian Partnership Act, - Reference opplication filed under section 256(1) was also rejected - Whether question as to whether there was any material before Tribunal for holding that no genuine firm had come into existence, was a question of law arising out of order of Tribunal - Held, yes FACTS The assessee-firm had submitted an application for registration, which was rejected by the ITO. However, on appeal, the AAC, reversed the order of the ITO and held that the assessee was genuine firm. On futher appeal, the Tribunal held that no genuine firm came into existence in view of the fact that a general power-of attorney containing sweeping powers was executed by the partners of the firm in favour of one 'K' and that conferring of such wide powers on an attorney was contrary to the provisions of section 4 of the Indian Partnership Act, 1932. In this view of the matter, the Tribunal allowed the appeal filed by the Department and restored the order passed by the ITO. Aggrieved by that order, the applicant-firm sought a reference, but that application was rejected. On an application under section 256(2). HELD The question as to whether, on the facts and in the circumstances of the case, there was any material before the Tribunal for holding that no genuine firm had come into existence, was a question of law. The instant applications was, therefore, allowed. The Tribunal was directed to state the case and refer the question of law to this court for its opinion. JUDGMENT Sohani, J.-The order in this case shall also govern the disposal of Misc. Civil Cases No. 104, 105 and 100…

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