Lodha, J. -
(1.)THE learned Income-tax Appellate Tribunal, Jaipur, Bench, Jaipur, has referred the following question of law to this court, on an application of the assessee :
" Whether, on the facts and in the circumstances of the case, the Tribunal was justified in not confirming the order of the Appellate Assistant Commissioner holding that the assessment made in the status of an association of persons as against the status of firm shown in the assessee's return was void ?"
(2.)THE facts giving rise to this reference briefly stated are that for the assessment year 1968-69, the assessee, M/s. Munilal Shivnarain (hereinafter called "the assessee"), filed a voluntary return declaring income of Rs. 19,867. THE assessee also filed an application in Form No. 11, along with the original partnership deed dated July 17, 1969. On a scrutiny, the ITO found that the assessee was not a genuine partnership firm. THE grounds on which this finding was arrived at by the ITO are not relevant for our present purpose. THE ITO, therefore, refused to register the firm under Section 185 of the I.T. Act. He thereupon proceeded to assess the assessee in its status as an association of persons and finalised the assessment. THE assessee filed two appeals before the AAC, one against the order refusing to register the firm and the other against the assessment itself. THE AAC accepted the appeal against the assessment order holding that if the ITO was of the opinion that the assessee could not be granted registration, he should have taken its status as an unregistered firm and not as an association of persons without issuing fresh notice in the status of an association of persons and giving adequate opportunity of hearing to the assessee. He was further of the view that in assessing the assessee as an association of persons, the ITO exceeded his jurisdiction. He, therefore, set aside that order. As a consequence, in the appeal against the order refusing to register the firm, the learned Appellate Assistant Commissioner held that the order under Section 185 of the Act was also void.
Being aggrieved by the orders of the learned AAC, the Department filed two appeals before the Tribunal.. The learned members of the Tribunal heard the two appeals together and by their order dated September 20, 1973, they allowed both the appeals, set aside the orders of the AAC, and sent back the matter to the AAC, with a direction "to consider whether the finding of the ITO that the firm was not genuine is correct or not. If the Appellate Assistant Commissioner comes to the conclusion that the firm was genuine and all the formalities as required under the law for the grant of registration were completed, he may pass an order accordingly. In case he finds that the finding of the Income-tax Officer regarding the non-genuineness of the firm was correct, in that case, he may hold that the status of the firm was rightly taken as that of an association of persons. Then the Appellate Assistant Commissioner should decide the quantum appeal in accordance with law."
The assessee thereupon moved two applications before the. Tribunal for referring the following questions to this court :
"Whether, on the facts and in the circumstances of the case, the order passed by the Income-tax Officer under Section 143(3) of the Income-tax Act, 1961, in the status of an ' association of persons' in pursuance of the voluntary return submitted by the applicant, in the status of 'firm', was void and without jurisdiction ?
Whether, on the facts and in the circumstances of the case, the order under Section 185 of the Income-tax Act, 1961, passed by the learned Income-tax Officer holding that the status of the assessee should be taken as an association of persons, was void and without jurisdiction ? "
After hearing the parties, the learned Tribunal, however, referred one question to this court as stated above.
We have heard, the learned counsel for the parties and have gone through the record.
(3.)IT may at once be stated that since the question whether the firm was genuine or not, has been left open to be decided by the learned AAC, we are not required to go into it and the only question which requires to be considered is whether, in the circumstances of the case, assuming that the assessee is not a genuine firm as held by the ITO, the assessment of the assessee could have been made taking its status as an association of persons. We shall now proceed to consider this question.
As we are concerned with the assessment year 1968-69, we have to take into consideration the provisions of the I.T. Act of 1961. The charging section under this Act is Section 4(1), which reads as under :
"Where any Central Act enacts that income-tax shall be charged for any assessment year at any rate or rates, income-tax at that rate or those rates shall be charged for that year in accordance with, and subject to the provisions of, this Act in respect of the total income of the previous year or previous years, as the case may be, of every person."
Thus, income-tax is charged under this Act on a person. The term "person" has been defined by Section 2(31) of the Act as follows :
" ' person ' includes :
(i) an individual,
(ii) a Hindu undivided family,
(iii) a company,
(iv) a firm,
(v) an association of persons or a body of individuals, whether incorporated or not,
(vi) a local authority, and
(vii) every artificial juridical person, not falling within any of the preceding sub-clauses."