R.K.AGRAWAL, J. - (1.) THE Tribunal, Allahabad, has referred the following question of law under s. 256(1) of the IT Act, 1961 (hereinafter referred to as 'the Act') for opinion of this Court : "Whether the Tribunal, on the facts and circumstances of the case, was justified in cancelling the registration under s. 186(1) and in interpreting the provisions of s. 184(7) as made by the Tribunal -
(2.) THE reference relates to the asst. yr. 1985 -86. Briefly stated the facts giving rise of the present reference are as follows : The applicant firm consists of three partners, namely, Smt. Shila Rastogi, Smt. Shikha Rastogi and Shri Mukesh Rastogi, having shares held at 40 per cent, 40 per cent and 20 per cent, respectively. The firm deals in manufacturing and sale of Chiken goods. The registration was granted to the firm for the first time in the immediately preceding year, i.e., 1984 - 85. A search was conducted in the business and residential premises of the assessee and their related group of the firm. During the course of search, it was found that the business of the firm M/s Chandra Chiken Products was conducted in the same premises where M/s Chandra Chiken Udyog was conducting a similar type of business of Chiken goods. The statements of the two ladies, namely, Smt. Shila Rastogi and Smt. Shikha Rastogi were also recorded under s. 132(4) of the Act during the course of the search. Thereafter, the AO, after giving an opportunity of being heard to the applicant, cancelled the registration under s. 186(1) of the Act. In appeal, the CIT(A) set aside that order and directed the AO to grant registration. The Department being aggrieved came up in second appeal before the Tribunal. The Tribunal after hearing the parties at length had come to the conclusion that there was no genuine firm in existence and the AO was fully justified in cancelling the same under s. 186(1) of the Act.
(3.) WE have heard Sri R.S. Agarwal, learned counsel for the applicant and Sri R.K. Upadhyaya, learned standing counsel appearing for the Revenue. Learned counsel for the applicant submitted that the applicant firm was granted registration for the first time in the immediately preceding year 1984 -85. The return filed by the partners of the firm had been accepted under s. 143(1) of the Act which amounts to assessment and, therefore, the registration certificate of the firm could not have been cancelled as it would amount to taxing the same income twice, first at the hands of the partners and other at the hands of the firm treating it as an unregistered firm which is not permissible under law. In support of the aforesaid pleas, he has relied upon the following decisions : 1. CIT vs. Prakash Wine Agencies (1994) UPTC 21 (All); 2. CIT vs. Smt. Jagjit Kaur (1980) 126 ITR 540 (All); 3. Vipan Khanna vs. CIT and Ors. (2002) 175 CTR (P&H) 335 : (2002) 255 ITR 220 (P&H).;