TMI Blog1963 (12) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. A notice under section 22(2) of the Act was served on the assessee on the 26th July, 1956. There was no compliance with the notice by the assessee till the 16th September, 1957. Thereafter a notice under section 22(4) was also served upon the assessee to produce the books of accounts on the 10th September, 1957, and the date of hearing before the Income-tax Officer was fixed on the 13th September, 1957. This notice was not also complied with. Accordingly, the Income-tax Officer completed the assessment under section 23(4) on the 16th September, 1957, to the best of his judgment and in the same order renewal of registration of the firm was refused. The assessee appealed to the Appellate Assistant Commissioner and its original grounds of appeal were confined only to the quantum of assessment and to the propriety of assessment under section 23(4). An additional ground was allowed to be raised by the Appellate Assistant Commissioner regarding the order of refusal of registration. It runs as follows: For that the learned Income-tax Officer was wrong in cancelling the registration of the firm and assessing the firm in the status of unregistered firm without giving the assessee an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng for the assessee, contends that the order of the Income-tax Officer under section 23(4) is both an order of assessment and an order refusing registration of the firm. This is one composite order as contemplated in section 23(4). If two separate orders were passed by the Appellate Assistant Commissioner, a question might have arisen as to whether two appeals, one in Form B and the other in Form D-II were to be filed. According to Mr. Ghosh, in terms of rule 21 of the rules under the Income-tax Act, Form B is the residuary form and an appeal of the nature as filed by the assessee before the Appellate Assistant Commissioner was in order. Furthermore, according to the provisions contained in the forms, it is incumbent that in appeals under section 30 the demand notice has to be attached to the appeal in Form No. D-II and if an appeal is filed in Form B against the quantum of assessment, which also requires the filing of the demand notice, it becomes impossible for the assessee to annex the same in the appeal in Form No. D-II. His main contention is that it would be unjust in the circumstances like this to call upon the assessee to file two appeals and the Appellate Assistant Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 26A.....may appeal to the Appellate Assistant Commissioner against the assessment or against such refusal or order. Although the order under section 23(4) is required to be a composite order and consequent upon the best judgment assessment, yet in section 30 it appears clear that the right of appeal against an assessment order under section 23 and a right to appeal against an order of refusal under section 23(4) are distinct rights, being disjunctive and not conjunctive. Therefore, at first blush it appears that the legislature was not oblivious of the provision of section 23(4) and in spite of it, this separate right of appeal as aforesaid has been provided for and nowhere in section 30 or in any other section it has been provided that a composite appeal ought to be filed against an order under section 23(4). Rule 21 prescribes the forms in which several appeals need be filed. It has been specifically provided for therein that an appeal under section 30 against an order of refusal of registration by the Income-tax Officer under section 26A should be filed in Form D-1. In the case of an appeal against the order of refusal by the Income-tax Officer to register a firm or t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated before is based on reasons and if in D-II appeal the demand notice is not filed, it may at best be an irregularity which might at the instance of the Appellate Assistant Commissioner be condoned under the exigencies of the circumstances, with which the assessee is confronted. It will appear from rule 21 that a separate form has been prescribed in respect of appeals preferred against an order under section 26A. I am in agreement with Mr. Balai Pal when he says that the order of refusal to register under section 26A and under section 23(4) stand entirely on a different footing. The procedure in registration of firms has been provided for in section 26A and such procedure is controlled by the Rules framed under the Act. This section contemplates that a firm's registration might have been renewed from year to year in the past, yet the Income-tax Officer may refuse to renew the registration in a particular year, if the application for renewal is not in order or if the Income-tax Officer is not satisfied that the firm is genuine and actually existed in terms specified in the instrument of partnership. Furthermore, cancellation of registration may be effected under rule 6B. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer. An appeal was taken to the Appellate Tribunal against the order passed by the Commissioner under section 33B by the assessee. The appeal was, however, dismissed. One of the questions which arose for consideration is as follows: Whether on the facts and circumstances of the case the orders passed by the Commissioner of Income-tax cancelling the orders of the Income-tax Officer granting registration of the firm and directing the Income-tax Officer to determine the tax payable by the firm on the basis that no registration has been granted to the firm was valid in law. The matter came up before Ramaswami J., as he then was, and Misra J. There was a difference of opinion between them, the former holding that in spite of the fact that a decision in favour of the assessee was made by the Appellate Assistant Commissioner, the Commissioner of Income-tax had jurisdiction to pass an order under section 33B. The latter was pleased to hold that such a position was not tenable in law in view of the fact that the Appellate Assistant Commissioner was in seisin of the case and in view of the order passed by him the Commissioner of Income-tax could not have exercised his powers under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeals need be filed by the assessee under section 30 of the Act. The observations by Misra J. were made on a different set of facts and the question was to the effect whether after the appellate order passed by the Appellate Assistant Commissioner, the Commissioner of Income-tax could have jurisdiction to pass an order under section 33B. It will appear that S.K. Das C.J. in his order did not actually come to the decision regarding the question whether two separate appeals need be filed as stated by both the learned judges. His Lordship S.K. Das C.J. was pleased to observe as follows: I do not, therefore, think that the answer to the question depends on whether each of the orders of the Income-tax Officer dated the 24th September, 1949, and 21st December, 1949, is to be treated as consisting of two separate orders or not. The real point to consider is whether the third restriction of section 33B of the Indian Income-tax Act has been overstepped or not. This observation shows that whatever was stated by the two respective learned judges, Ramaswami J. and Misra J., regarding filing of one appeal or two appeals against a composite order under section 23(4) did not seem to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst best judgment assessment made under section 23(4), in addition to the right to apply for cancellation of the assessment under section 27. Prior to 1939, the only relief available to the assessee against a best judgment assessment was that provided by section 27. Section 27 provides that cancellation of assessment may be made if an assessee was satisfactorily found to have been prevented by sufficient cause from complying with the terms of the relevant notice under section 22, whereas section 30 gives a right of appeal on merits. Accordingly in my opinion the contention as raised by Mr. Balai Pal in this regard cannot be accepted. Mr. Ghosh has further advanced the argument that even assuming that two appeals need be filed against the composite order passed under section 23(4), yet if resort was not had to such a procedure, it may at best be said that the challenge of the two orders, contained in the composite order passed by the Income-tax Officer in one appeal in Form B, should at best be treated as an irregularity. In support of his contention he has referred us to a decision of this court in Sheonath Singh v. Commissioner of Income-tax [1958] 33 I.T.R. 591. In my o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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