Law:

Section:

Section 263 of the Income-tax Act, 1961 [Corresponding to section 33B of the Indian Income-tax Act, 1922] - Revision - Of orders prejudicial to revenue - Assessment years 1947-48 to 1949-50 - Commissioner exercising powers under section 33B of 1922 Act cancelled registration granted to respondent firm under section 26A of 1922 Act for the assessment years in question after appeal preferred by firm on quantum of assessment had been disposed of by Appellate Assistant Commissioner and directed Income-tax Officer to determine tax on basis that no registration had been granted - Whether impugned order of Commissioner was valid in law - Held, yes FACTS Two ladies D and N were carrying on coal mining business as co-owners up to the assessment year 1942-43. On 21-4-1943, the two ladies entered into a deed of partnership, one of the terms of which was, that the death of any one of the partners would not dissolve the partnership and that on such an event happening the sons and grandsons of the deceased partner would automatically become partners and the partnership would be deemed to be continued and would continue. D died on 27-5-1943, leaving a will by which she bequeathed her share in the business to her two minor sons in equal shares. For the assessment year 1944-45 an application was made under section 26A of 1922 Act for registration of the firm. This application was allowed. For the following two years another application was made but it was rejected by the Income-tax Officer and on appeal it was granted and the firm was registered for that year and also for the assessment year 1946-47 and assessment was made on the partnership firm. Sometime in 1951 the Commissioner of Income-tax acting under section 33B of 1922 Act cancelled the registration for all the three years and directed the Income-tax Officer to determine the tax on the basis that no registration had been granted to the firm. An appeal was taken to the Appellate Tribunal which was dismissed. On reference the High Court held that in the facts and the circumstances of the case the order passed by the Commissioner cancelling the orders of the Income-tax Officer granting registration of the firm and…

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