Satish Chandra, C.J. - (1.) THE assessee is a registered firm constituted under an instrument of partnership of April 8, 1960. It consisted of five partners. Two minors were admitted to the benefits of the partnership.
(2.) FOR the assessment year 1961-62 the firm was granted registration. It was renewed from year to year up to 1969-70. FOR the year 1968-69 the assessment order was passed on 8th July, 1969, and for the assessment year 1969-70 on 4th December, 1969. In the body of these assessment orders the ITO granted renewal of registration to the assessee-firm. The CIT found that Chandi Prasad, one of the minors, had attained majority on 4th January, 1964, and thereafter he had been made a full-fledged partner in the firm. He felt that there has been a change in the constitution of the firm, and since no fresh partnership deed was drawn up, the renewal of registration with effect from 1965-66 onwards was erroneous and prejudicial to the interests of the revenue. Since assessment years 1965-66 to 1967-68 were beyond the prescribed period of limitation for action under Section 263(1) of the I.T. Act, he issued notices for the assessment years 1968-69 and 1969-70, After hearing the assessee he concluded that Chandi Prasad attained majority on 4th January, 1964, and had been made a full-fledged partner of the firm. In view of the decision of this court in Ganesh Lal Laxmi Narain v. CIT [1968] 68 ITR 696, and as there has been a change in the constitution of the partnership, since no fresh partnership deed had been drawn up, the renewal of registration was erroneous and prejudicial to the interests of the revenue. He, therefore, cancelled the registration for both the aforesaid assessment years, and directed the ITO to recompute the tax demand treating the firm as unregistered. Aggrieved by this order of the Commissioner dated 25th February, 1971, the assessee went up in appeal to the Tribunal. The Tribunal upheld the findings of the Commissioner.
(3.) IT appears that the assessment order for the year 1968-69 dated 8th July, 1969, was taken up by the assessee in appeal. The appeal was decided on 22nd August, 1970. The assessment order for the year 1969-70 was similarly subjected to an appeal by the assessee. The same was pending when the Commissioner passed the order cancelling the registration on 25th February, 1971. This appeal was ultimately decided on 8th July, 1971. The second submission before the Tribunal was that the order of the ITO granting registration merged in the appellate order. The Commissioner had no jurisdiction to interfere with the appellate order. The Tribunal repelled this submission. It held that the order granting registration did not merge in the appellate order passed in relation to the assessment order. The Tribunal dismissed the assessee's appeal.;