Law:

Section:

Section 144, read with section 143 of the Income-tax Act, 1961 [Corresponding to section 23(4), read with section 23(2) of the Indian Income-tax Act, 1922] - Best assessment - Assessment years 1951-52 and 1952-53 - Whether in case of refusal to register a firm there is no duty imposed on ITO to give notice to assessee intimating his intention to refuse application for renewal of registration - Held, yes - Whether where on failure of assessee to comply with notice under section 23(2) of 1922 Act, ITO refused to renew registration of firm and completed assessment under section 23(4) of 1922 Act and assessee availed itself of right of appeal before AAC and also before Tribunal against said order of ITO, assessee could not complain in reference before High Court that there had been violation of principle of natural justice as no notice was given to it before refusing to renew registration - Held, yes FACTS The assessee had been taxed for the assessment years 1951-52 and 1952-53 in the status of an unregistered firm. An application for renewal of registration of the firm was made under section 26A of the 1922 Act along with the return of income for each of the two assessment years. A notice was issued by the ITO under section 23(2) of the 1922 Act, requiring the assessee to attend the ITO's office and to produce any evidence in support of the return. The assessee failed to comply with the notice. Several adjournments were given by the ITO, however, no compliance was not made by the assessee on the adjourned date also, and, therefore, the ITO proceeded to complete the assessment under section 23(4) of the 1922 Act and he also refused to register the firm as it had not complied with the notice under section 23(2) of the 1922 Act. On appeal, the assessee contended that notice should have been given to it before refusing to renew registration. The said argument was rejected by the AAC and the assessment was confirmed. The same argument was put forward before the Tribunal, which dismissed the appeal and confirmed the order of assessment and also the refusal of the ITO to renew registration of the firm. On reference: HELD It is manifest from the language of section 23(4)…

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