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Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - ITO rejected assessee-firm's application for registration on ground that no genuine firm had come into existence - On appeal, AAC remanded matter back to ITO for making further enquiry into facts without deciding matter on merits - On revenue's appeal against remand order only, Tribunal not only set aside AAC's remand order but also held on merits that refusal of registration was justified - Whether Tribunal was justified in giving a finding on merits of case - Held, no Facts For the assessment year 1972-73, the ITO rejected the assessee-firm's application for registration on the ground that no genuine firm had come into existence. On appeal, the AAC took the view that some further enquiry into facts regarding genuineness of the firm was necessary and, accordingly, remanded the case to the ITO without deciding the matter on merits. The revenue appealed before the Tribunal against the remand order. The Tribunal, however, after coming to the conclusion that the remand was not justified and the existing material was sufficient to decide the case on merits, proceeded to decide the case itself on merits and held that refusal of registration was justified. On reference: Held The scope of the appeal before the Tribunal was merely consideration of the correctness of the order of remand made by the AAC since even the revenue while preferring the appeal did not agitate the merits of the case for decision by the Tribunal. In such a situation, the Tribunal should have, accordingly, quashed the remand order requiring the AAC to decide the appeal afresh on merits. It was, therefore, not justified in giving finding on the merits of the case, without the same having been decided first by the AAC and that point not having been agitated in the appeal filed by the revenue before the Tribunal. Rajesh Baliya for the Applicant. B.R. Arora for the Respondent. JUDGMENT 1. This reference at the instance of the assessee is under section 256(1) of the Income-tax Act, 1961 for decision on the following question of law: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in giving…

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