JAGANNATHA SHETTY, J. - (1.) This is a reference under Section 256(1) of the I.T.Act, 1961. The Income-tax Appellate Tribunal, Bangalore Bench has referred the following question: "Whether, on the facts and in the circumstances of the case, there should have been a specific order in writing under Section 184(7) giving effect to continuance of registration to the assessee firm for assessment year 1974-75 before Income-tax Officer could cancel the registration under Section 186(2)?
(2.) The question required by the assessee for reference was not in this form. The assessee suggested the following two questions: (1) "On the facts and in the circumstances of the case, whether the Tribunal was justified in law in holding that registration to the assessee firm was rightly cancelled under Section 186(2) of the Income-tax Act, 1961 for the assessment year 1974-75?" (2) "On the facts and in the circumstances of the case, whether registration for the assessment year 1974-75 can be cancelled without first granting the registration?"
(3.) The assessee is a firm which had been registered upto the assessment year 1973-74. The relevant assessment year concerned in this case is 1974-75. The assessee filed a declaration in Form No.12 and that declaration was within the prescribed time. The assessee could not file the return of income as required under Section 139(1) on or before July 31, 1974. So, the Income-tax Officer issued a notice under Section 139(2). But there was no response from the assessee. Thereafter the Income-tax Officer issued two notices under Section 142(1) requiring the assessee to produce the books of accounts. The assessee unfortunately did not respond to these notices also. Consequently the Income-tax Officer made an assessment exparte under Section 144 and cancelled the registration of the firm under Section-186(2). Before cancelling the registration under Section 186(2) of the Act, the I.T.O. had issued a notice dated February 25, 1975 calling upon the assessee to show cause why the registration granted should not be cancelled. It appears, there was no reply from the assessee even to this notice.;