- (1.) THIS reference under Section 256(1) of the Income-tax Act, 1961, is at the instance of the assessee to answer the following question of law : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee should have filed two appeals, one against the status and quantum under Section 246(c) and another against the refusal of registration under Section 246(j) and, on that view, in setting aside the order of the Appellate Assistant Commissioner with a direction to him to dispose of the appeal afresh, according to law, after giving an option to the assessee to choose whether the appeal was against refusal of registration or it was against the quantum of the assessment."
(2.) THE relevant assessment year is 1969-70. THE assessee M/s. Ansari Jewellers, Jaipur, claimed to be assessed as a firm. THE Income-tax Officer, however, assessed it as an "association of persons" under Section 144 of the Income-tax Act, and determined the total income at Rs. 35,000 comprising Rs. 18,000 as the estimated business income and Rs. 17,000 as income from undisclosed sources. THE assessee preferred an appeal to the Appellate Assistant Commissioner and challenged the quantum of the income assessed and assessment in the status of "association of persons". THE Appellate Assistant Commissioner deleted the addition of Rs. 17,000 in full and reduced the business income from Rs. 18,000 to Rs. 15,000. It was also held by the Appellate Assistant Commissioner that the Income-tax Officer was not justified in treating the appellant as an "association of persons". The Revenue preferred an appeal before the Income-tax Appellate Tribunal. The Tribunal took the view that two separate appeals, one under Clause (c) and the other under Clause (j) of Section 246 of the Income-tax Act, 1961, had to be filed by the assessee, and this having not been done, one composite appeal cannot be maintained for granting the reliefs claimed by the assessee. Accordingly, the Tribunal directed that the assessee should exercise its option and give out the nature of the one appeal filed by it. Aggrieved by the above view of the Tribunal, the assessee applied for a reference under Section 256(1) of the Act which has led to this reference of the above question to this court for its decision. The only point for decision in this reference is whether the assessee should file separate appeals instead of one composite appeal as has been done in the present case, in order to challenge the quantum and also refusal of registration as a firm. The only decision cited on this point supports the contention of the assessee that there is no procedural illegality in filing one composite appeal for obtaining reliefs under the Income-tax Act, 1961, wherein the provisions are different from the Indian Income-tax Act of 1922, The learned counsel for the Revenue does not dispute this position. In CIT v. Rupa, Traders [1979] 118 ITR 412 (Cal), it was held by the Calcutta High Court that in view of the changes effected in the relevant statutory provisions contained under the Income-tax Act, 1961, there is now no force in the contention that the two separate appeals must be filed in such a situation. An earlier decision of the Calcutta High Court in Fuel Supply Co. v. CIT [1965] 58 ITR 130, based on the corresponding provisions of the Indian Income-tax Act, 1922, was distinguished. Same is the view taken by the Bombay High Court in CIT v. Hansa Agencies [1980] 121 ITR 147. We do not find any reason to take a different view particularly when no authority or principle has been cited in support of the contrary proposition.
(3.) CONSEQUENTLY, the reference is answered in favour of the assessee and against the Revenue as under : "The Tribunal was not justified in holding that the assessee should have filed two appeals one under Section 246(c) and another under Section 246(j) of the Income-tax Act, 1961, and, therefore, it was also not justified in making the consequential direction." In the facts and circumstances of the case, the parties shall bear their own costs.;