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C.I.T. v. M/S Jai Bharat Trhearte - INCOME TAX REFERENCE No. 123 of 1985  RD-AH 847 (21 September 2004)
Court No. 37
INCOME TAX REFERENCE NO. 123 OF 1985
Commissioner of Income Tax, Lucknow
M/s Jai Bharat Theatre, Lucknow.
Hon'ble R.K. Agarwal, J.
Hon'ble K.N. Ojha, J.
The Income Tax Appellate Tribunal, Allahabad, has referred the following question under Section 256(1) of the Income Tax, 1961, (hereinafter referred to as the Act) for opinion to this Court:
"Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal was legally correct in directing the A.A.C. to refuse to admit the appeal against the assessment made by the I.T.O. on 24.2.1981 for the Assessment Year 1976-77."
Briefly stated the facts giving rise to the present reference are as under:
The reference relates to the Assessment Year 1976-77, for the relevant previous year ending on 31.3.1976. The assessment order made by the Income Tax Officer treating the respondent as a registered firm, was set aside by the Commissioner of Income Tax under Section 263 of the Act on 30.11.1979 with certain directions. In the appeal preferred by the respondent, the Tribunal vide order dated 29.4.1981 had cancelled the order of the Commissioner of Income Tax and restored that of the Income Tax Officer. In the meantime the Income Tax Officer on 24.2.1981 passed a fresh assessment order in consequence of and in pursuant to the direction given by the Commissioner of Income Tax. The appeal preferred before the Appellate Assistant Commissioner was allowed wherein he excluded the income from M/s Jai Santoshi Ma Exhibitions from the assessment of the respondents. Feeling aggrieved the Revenue preferred an appeal before the Tribunal. The Tribunal had allowed the appeal of the Revenue and had directed the Appellate Assistant Commissioner to refuse to admit the appeal against assessment order dated 24.2.1981 passed by the Income Tax Officer.
We have heard Sri A. N. Mahajan, learned Standing Counsel for the Revenue. Sri Shambhoo Chopra, learned counsel for the respondents states that he has no instruction in the matter.
It may be mentioned here that in respect of the proceedings initiated under Section 263 of the Act the Tribunal had referred the following question of law for opinion to this Court:
"Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the assessee's claim of registration was rightly allowed by the Income Tax Officer and in that view canceling the order of the Commissioner of Income Tax under Section 263?"
The reference was registered as I.T.R. No. 235 of 1982 and this Court vide judgment and order dated 6.10.1999 has held that there was no valid firm for the purpose of Income Tax, which could be granted registration and assessed as such and answer of the question referred to it was given in the negative i.e. in favour of the Revenue and against the assessee. This judgment is reported in 2001 U.P.T.C. 855. As this Court had held that there was no existence of the firm during the relevant assessment year, the Income Tax Officer was justified in passing afresh assessment order to give effect to the order passed by the Commissioner of Income Tax. In this view of the matter the Tribunal was not justified in directing the Appellate Assistant Commissioner to refuse to admit the appeal. The Tribunal ought to have decided the appeal filed by the Revenue on merits.
In view of the foregoing discussions, we answer the question referred to us in the negative i.e. in favour of the assessee and against the Revenue.
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