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C.I.T. Lucknow v. M/S. Deoki Nandan Om Prakash, Chandausi - INCOME TAX REFERENCE No. 16 of 1987 [2004] RD-AH 967 (30 September 2004)


This is an UNCERTIFIED copy for information/reference. For authentic copy please refer to certified copy only. In case of any mistake, please bring it to the notice of Joint Registrar(Copying).


Court no.37

Income Tax Reference No. 16 of 1987

The Commissioner of Income tax



M/s Deokinandan Om Prakash------------------ Respondent

Hon'ble R.K.Agarwa,J

Hon'ble Prakash Krishna, ,J

The Income Tax Appellate Tribunal, Delhi has referred following question of law under section 256 (1) of the Income Tax Act ,1961 ( here in after referred to as the Act) for opinion to this Court:

"Whether in respect of assessment year 1974- 75 the Tribunal has been in error  in holding that the Income tax Officer can derive mandate from Section 186 (1)  of the Income Tax Act only in respect of orders passed under section  185 (1) (a) of the Act and once the provisions of Section 185 (1) (b) are invoked Section 186 (1) of the Act

simply cannot be brought to play any role."

Briefly, stated the facts in the present case are as follows:

The respondent is a firm. For the assessment year 1974- 75 the Income Tax Officer rejected the application filed by the respondent for grant of registration on the ground that it had not filed information about formation of partnership to its constituent and further that the information was given to the State Bank of India, as late as on 25-9-1975, though the instrument was executed on 26-12-1973 incorporating certain changes. The order passed under section 185 (1) (b) of the Act was reversed by the Appellate Assistant Commissioner in the appeal preferred by the respondent. The Appellate Assistant Commissioner directed the Income Tax Officer to grant registration. This order was accepted by the Revenue. The registration was granted. Subsequently, proceeding under section 186 (1) of the Act was initiated by the Income Tax Officer in respect of the assessment year 1974- 75 to 1978- 79 and vide order dated 30-3-1982 the Income Tax Officer had cancelled the registration for all these years. In the present reference we are only concerned with the assessment year 1974- 75. The order canceling registration was challenged by the respondent in appeal before the Appellate Assistant Commissioner. He allowed the appeal by relying on a decision of Assam High Court in the case of  Rameshwar Goenka Vs. State and others ( 1970) 77 ITR page 421. The Revenue's appeal before the Tribunal has failed.

We have heard Sri Shambhu Chopra ,learned counsel for the Revenue and Sri Gaurav Mahajan, learned counsel appearing for the respondent assessee.

Learned counsel for the Revenue submitted that the provision of Sections 185 and 186 operate in different field. While under section 185 registration is to be granted and under section 186 it can be cancelled on the happening of the circumstances, mentioned therein. The proposition tendered by the learned Counsel for the Revenue can not be disputed, but provision of Section 186 of the Act cannot be invoked by the assessing authority in case where the registration has been granted in compliance of appellate order. The judicial doctrine as also the hierarchy is to be followed. In this view of the matter we are of the considered opinion that the Tribunal has not committed any error in upholding the order of Assistant Commissioner vacating the order of registration passed under section 186 (1) of the Act.

In view of the foregoing discussions, we answer the question referred to us in negative i.e. in favour of the assessee and against the Revenue. However, there shall be no order as to costs.

Dated: 30-09-2004



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