Law:

Section:

section 185(5) of the Income-tax Act, 1961 - Firm - Registration - Genuineness of - Assessee-firm filed an application under section 185 for registration which was refused by ITO by an order dated 12-2-1976 and assessment was completed ex parte - Assessee made an appeal before AAC under section 246(j) - Assessee also made an application to ITO for cancellation of assessment order passed ex parte - ITO by an order dated 10-9-1976 granted registration and completed assessment - Whether ITO's order dated 12-2-1976 was an order refusing registration under section 185(5) - Held, yes Facts For the assessment year 1973-74, the assessee-firm made an application for the registration under section 185. The ITO by an order dated 12-2-1976 refused registration under section 185(5) on the ground that the genuineness of the firm stated to have been reconstituted under the partnership deed was not established. The assessment was completed ex parte. The assessee made an appeal to the AAC under section 246( j). Subsequently, the assessee also made an application under section 146 to the ITO for the cancellation of the ex parte assessment. By an order dated 10-9-1976, the ITO without even referring to the earlier order granted registration to the assessee and completed the assessment. The assessee thereafter withdrew the aforesaid appeal pending before the AAC under section 246. The Commissioner held that the ITO had no jurisdiction to pass another order granting registration under section 185 after having refused to grant registration by an earlier order which had not been set aside by any competent authority. On appeal, the Tribunal held that the order of the ITO dated 12-2-1976 refusing registration had been passed under section 185(5). On reference : Held The earlier order dated 12-2-1976, passed by the ITO, clearly stated that the ITO was not satisfied with the genuineness of the assessee stated to have been reconstituted under the partnership deed and the registration was, therefore, refused under section 185(5). The assessment was, therefore, completed on this basis after refusing registration under section 185(5). A bare perusal of the order was sufficient to indicate…

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