A.N. Verma, J. - (1.) At the instance of the Revenue, the Income-tax Appellate Tribunal has referred the following two questions for our opinion : "1. Whether, on the facts and in the circumstances of the cases, the Income tax Appellate Tribunal was correct in law in holding that the provisions of Section 185(5) of the Income tax Act, 1961, apply only to a case where an application for registration has been made for the first time and not to the case of renewal ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the Income-tax Officer could not refuse renewal of registration under Section 185(5) of the Income-tax Act, 1961? " Learned standing counsel representing the Commissioner of Income-tax does not dispute that the questions referred are covered by two decisions of this court reported in Nand Singh Taneja and Sons v. CIT [1973] 91 ITR 202 and Addl. CIT v. Radha Kishan Banwarilal [1979] 116 ITR 970. The decisions fully support the assessee.
(2.) The relevant assessment year is 1972-73. The Income-tax Officer made an assessment under Section 144 of the Income tax Act, 1961, on the ground that there was no compliance by the assessee with the notice issued under Section 142(1). The assessee had been allowed registration for the assessment year 1971-72. The Income-tax Officer declined to allow renewal of registration on the ground that the assessment had been completed under Section 144, as it was not possible to verify whether the profits had been allocated in consonance with the ratio specified in the partnership deed. He, accordingly, made the assessment in the status of an unregistered firm.
(3.) In the appeal before the Appellate Assistant Commissioner, it was submitted that the assessee had been allowed registration for the preceding year and it had also furnished a declaration in Form No. 12 and complied with the requirements necessary for renewal of registration. That being so, it was submitted, the Income-tax Officer had committed an evror in refusing the renewal of registration and making the assessment in the status of an unregistered firm. The Appellate Assistant Commissioner, however, negatived the contention and held that the considerations for the two years, i.e., the year in question and the preceding year were different and that, consequently, the Income-tax Officer had rightly refused renewal of registration.;