Law:

Section:

Section 186 of the income-tax act, 1961, read with article 226 of the constitution of india-Firm-Registration-Cancellation of-Whether writ assailing validity of notice issued under section 186(1), requiring assessee-firm to show cause against cancellation of registration, on ground that department was merely seeking to cancel registration on charge of opinion qua genuineness of firm's existence, is maintainable-held, no Facts The assessee-firm was granted registration for the assessment year 1975-76. Thereafter the revenue issued a notice under section 186(1), expressing its opinion that during the assessment year 1975-76 and during the subsequent assessment years which followed, viz., the years 1976-77 and 1977-78, there was no genuine firm in existence and the registration to the firm was erroneously granted for the assessment year 1975-76. The assessee-firm was called upon to show cause why the order granting registration be not cancelled. On writ, the assessee assailed the said notice on the ground that the department was merely seeking to cancel the registration on change of opinion which it was not entitled to do under section 186(1) and the reliance was placed on a number of authorities under section 147. Held The entire scheme of section 147 is different from the provision which is applicable to section 186(1). Section 147 has been considered as a jurisdictional provision and certain prerequisites (as provided in the section itself) have to be satisfied before the said provision comes into play. The entire case law under the said provision was rendered in reference to the said prerequisites. These prerequisites are completely absent in section 186(1), wherein the simple expression is 'the ITO is of the opinion'. In these circumstances, the approach underlying the interpretation of section 147 will not be apposite for interpreting section 186(1). In the instant case, though it was not possible to say anything about the material upon which the department had placed reliance for proceeding under section 186(1), it was apparent that the present case was not a fit case where it could be said that the department lacked jurisdiction. In this view, the petition…

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