D.N. Baruah, J. - (1.) IN this reference under Section 256(1) of the INcome-tax Act, 1961 (for short, "the Act"), the following two questions have been referred at the instance of the assessee for opinion of this court : " (1) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in upholding the cancellation of registration under Section 186(1) of the INcome-tax Act, 1961, for all the four years ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that for non-production of all the partners, the INcome-tax Officer had no means to ascertain the existence of a genuine firm and, therefore, was right in cancelling the registration allowed ?"
(2.) THE assessee is a firm registered under the Partnership Act. For the assessment years 1979-80, 1980-81, 1981-82 and 1982-83, the Income-tax Officer passed orders under Section 186(1) of the Act. He found that the firm was allowed registration earlier with eight partners as named in the order passed by the Income-tax Officer. On August 30, 1985, the Income-tax Officer visited the premises of the firm and among other things he found that the signatures of the three partners recorded at the time of the search materially varied with the signatures given in the application form and papers filed by the firm. THE Income-tax Officer asked the assessee to show cause why registration should not be cancelled. On this ground the Income-tax Officer asked the assessee to produce all the partners for examination. Only two partners, namely, Ajit Barkataky and Jiten Nath, were produced for examination and their signatures were taken. THE Income-tax Officer, therefore, came to the conclusion that the firm was not genuine. As such the registration of the firm which was allowed earlier by order dated March 20, 1982, was cancelled after obtaining the approval of the Inspecting Assistant Commissioner. THE Income-tax Officer also observed that the cancellation order would have effect for the assessment years 1979-80, 1980-81, 1981-82 and 1982-83. Being aggrieved, the assessee preferred an appeal before the Appellate Assistant Commissioner and the Income-tax Officer also brought to the notice of the Appellate Assistant Commissioner that he passed the order under Section 158 in the facts and circumstances mentioned above. According to the Appellate Assistant Commissioner, the assessee could not explain the reason for non-production of the partners for examination before the Income-tax Officer and in the opinion of the Appellate Assistant Commissioner, this was a sufficient ground for cancellation of the registration and the appeals were dismissed. The assessee-firm preferred further appeal before the Income-tax Appellate Tribunal, The contention of the assessee before the Income-tax Appellate Tribunal was that the firm had been found to be genuine and in existence before the Income-tax Officer had allowed registration earlier vide order dated March 20, 1982. The signatures of the persons after a long time might vary. Some other submissions had also been made before the Appellate Tribunal. The Appellate Tribunal, however, found that the difference in the signature was not the ground for cancellation of registration as the Income-tax Officer found that the assessee was unable to produce the other partners before him for examination. The Appellate Tribunal came to the conclusion that the Income-tax Officer was justified on the facts of the case in cancelling the registration of the firm.
(3.) THE assessee requested the Tribunal to refer the aforesaid two questions for opinion of this court. Hence, the present reference. We have heard Dr. A. K. Saraf, learned counsel for the assessee, and Mr. U. Bhuyan, learned junior standing counsel for the Revenue.;