B.S. Dhillon, J. - (1.) THE following question of law has been referred to this court for opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal was not right in law in modifying the Additional Commissioner's order to the extent that the Income-tax Officer should in the first instance dispose of according to law the assessee's Form No. 11 application for registration ?"
(2.) THE facts are not in dispute. THE firm was granted registration for the assessment year 1969-70 with Shri Brij Nath and Shri Vinod Kumar as partner. Shr. Vinod Kumar retired from the partnership on March 31, 1969, and the old firm stood dissolved. A new partnership with Shri Brij Nath and Shri Balbir Kumar was constituted on April 1, 1969, and the partnership deed was executed on May 21, 1969. THE assessee was assessed as a registered firm by the ITO. THE assessee gave a declaration under Section 184(7) of the I.T. Act in the prescribed Form No. 32 saying that there had been no change in the constitution of the firm. Later, the assessee's learned counsel detected the said mistake and wrote to the ITO on November 7, 1970, saying that there had been a change in the constitution of the firm evidenced by a new instrument of partnership dated May 21, 1969, and a From No. 11 application for registration of the firm for the assessment year 1970-71 was also sent along with the said letter. THE ITO did not take any action on this letter. THE Addl. Commissioner issued a notice to the assessee on September 12, 1972, proposing to cancel the assessment order made on October 24, 1970. After hearing the assessee, the Addl. Commissioner cancelled the continuance of registration as having been allowed on wrong premises and directed the ITO to treat the firm as unregistered for the, assessment year 1970-71. On appeal by the assessee, the learned Tribunal set aside the order of the Addl. Commissioner with the following observations ; "In the result, we modify the learned Additional Commissioner's order so as to set aside the assessment dated October 24, 1970, and direct the Income-tax Officer to dispose of according to law the assessee's application for registration in the light of the assessee's plea that the mistake causing delay occurred in the assessee's lawyer's office and thereafter to assess the firm afresh in the light of his order on the said application." The revenue has come up in a reference application at whose instance the said question of law has been referred to this court for opinion. After hearing the learned counsel, we are of the opinion that no fault can be found with the order passed by the learned Tribunal. It is not disputed that the application in Form No. 11 filed by the assessee was pending before the ITO. The ITO did not pass any order on this application. Consequently, the order of the Addl. Commissioner directing the ITO to assess the assessee as an unregistered firm could not be sustained in law as the ITO was bound in law to dispose of the prayer made by the assessee. In case the ITO allowed the prayer, the assessee had to be treated as a registered firm and in case the application made by it was declined, the firm had to be assessed as an unregistered one. In this view of the matter, no fault can be found with the order of the learned Tribunal and, consequently, we answer the question referred to us in the affirmative, i.e., in favour of the assessee and against the revenue. We order accordingly. There is no order as to costs.;