- (1.) Both the petitions are disposed of by this common order, since the point involved is common. In Reference No. 29 of 1983 which arises out of the order dated November 26, 1981, in respect of the assessment year 1977-78, the Income-tax Tribunal has referred the following two questions under Section 256(1) of the Income-tax Act, 1961 : " 1. Whether the Tribunal was right in law in not permitting the assessee to raise additional legal ground 2, Whether the Tribunal was right in law in holding that reconsideration on the point of status cannot be done in view of Section 185(5) of the Income-tax Act, 1961 "
(2.) Reference No. 46 of 1984 is in respect of the assessment year 1977-78 arises out of the order of the Tribunal dated October 19, 1981, and the following question has been referred by the Tribunal": " Whether the learned Tribunal was right in holding that the Income-tax Officer was right in refusing to grant registration to the assessee under Section 185(5) of the Act -
(3.) The brief facts of the ease are that the firm was constituted by four partners as per partnership deed dated April 10, 1968. Out of four partners, three were lady partners and two lady partners, namely, Smt. Meghi Devi and Krishan Kanta, retired from the partnership with effect from July 31, 1976, and in their place two new lady partners, namely, Smt. Geeta Devi and Smt. Lila Devi, were taken and a new deed of partnership was executed on August 1, 1976. The assessment for 1976-77 was completed under Section 144 and the registration was refused under Section 185(1)(b) of the Income-tax Act. The reasoning which was taken by the Income-tax Officer that since there was failure on the part of the assessee in accordance with the provisions of Section 143(2)/142(1) the assessment has been completed under Section 144, and, as such, the assessee is not entitled to registration under Section 185(5). It was also taken into consideration that the affidavit, as required in the assessment proceedings on October 4, 1979, of the new partners was not filed nor the confirmations with regard to investments of the new partners were filed. This was also taken as a ground that the partners are not genuine. The personal attendance of the new partners was required, but, they were not produced and, therefore, it was considered that they are only dummy partners. The request for examining the said partners on commission through che Income-tax Officer, Calcutta, was not accepted nor the request for issue of commission was considered because it was at the fag end of the proceedings and the commission could have been issued only for examination of witnesses and not for partners. In the deed of partnership, it was not provided that the lady partners would be the sleeping partners and, accordingly, the registration was refused. In appeal the Commissioner of Income-tax (Appeals) confirmed the order so far as the refusal to grant the registration under Section 185(5) was concerned, but in respect of the grounds under Section 185(1)(b), the Commissioner of Income-tax (Appeals) was of the view that it was the responsibility of the Income-tax Officer to establish that the lady partners were benami and the capital contribution did not make them genuine. The lady partners were income-tax assessees and having the capacity for the amount invested. Accordingly, the order passed under Section 185(1)(b) was not sustainablc under law.;