COMM.OF INCOME TAX VISAKHAPATNAM V. BHANU ENTERPRISES KAKINADA

ITTA/35/1999

AI Insights

The case revolves around an appeal by the Commissioner of Income Tax, Visakhapatnam against the decision of the Income Tax Appellate Tribunal, Hyderabad, which had granted renewal of registration under Section 184 of the Income Tax Act to M/s. Sri Bhanu Enterprises Kakinada for the assessment year 1987-88. The Revenue challenged the Tribunal's decision on two grounds: the entitlement of the assessee to renewal of registration and the genuineness of the firm despite irregularities pointed out by the Assessing Officer concerning the signature of a deceased partner. The Tribunal's decision was based on the precedent of granting registration in the previous years and the lack of substantial evidence from the Revenue to contest the assessee's claims.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 719199 (HC-HYDERABAD)
• Appeal Type: Others
• Pronouncement Date: 26-12-2011
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Keywords: Firm Registration; Income Tax; Genuine Firm; Signature Irregularities
• Section: 184

Judgement Text

"HONOURABLE THE CHIEF JUSTICE SHRI MADAN B.LOKUR AND HONOURABLE SHRI JUSTICE SANJAY KUMAR INCOME TAX TRIBUNAL APPEAL NO.35 OF 1999 Dt: 26-12-2011. Between: THE COMMISSIONER OF INCOME TAX VISAKHAPATNAM .. APPELLANT AND M/S.SRI BHANU ENTERPRISES KAKINADA .. RESPONDENT HONOURABLE THE CHIEF JUSTICE SHRI MADAN B.LOKUR AND HONOURABLE SHRI JUSTICE SANJAY KUMAR INCOME TAX TRIBUNAL APPEAL NO.35 OF 1999 JUDGMENT : (PER HON’BLE THE CHIEF JUSTICE SHRI Madan B.Lokur) The Revenue is aggrieved by an order dated 22-12-1998 passed by the Income Tax Appellate Tribunal, Hyderabad Bench ‘A’, Hyderabad in I.T.A.NO.430/Hyd/94 relevant for the assessment year 1987-88. 2. The two substantial questions of law framed for consideration are as follows: a) Whether on the facts and in the circumstances of the case the ITAT is correct in holding that the assessee firm is entitled to get renewal of registration under Section 184 of the Income Tax Act as it was held by CIT (Appeals)? b) Whether on the facts and in the circumstances of the case the ITAT is correct in law in holding that the Assessing Officer has not established or proved that assessee firm was not genuine inspite of the fact that the Assessing Officer has pointed out certain irregularities in respect of the signature put in by a deceased partner of the firm, which clearly establishes that the firm is not genuine? 3. The Tribunal noted that the assessee was found to be a genuine firm and was granted registration under section 184 of the Income Tax Act, 1961 for the assessment years 1986-87 and 1987-88, the latter being the present assessment year. The registration was on the basis of a direction given by the Commissioner of Income Tax (Appeals) that if registration is granted for the year 1986-87, there is no reason for denying registration for the year 1987-88. 4. Since registration was granted for the earlier year and that has been accepted by the Revenue, there is no reason to come to a conclusion that the assessee should not be granted registration for the year 1987-88. 5. It is also noted by the Tribunal that for the subsequent assessment year 1988-89 registration has been granted to the assessee. 6. Under these circumstances, the first substantial question of law must be answered in the affirmative, in favour of the assessee and against the Revenue. 7. Insofar as the second substantial question of law is concerned, the contention of learned counsel for the Revenue is that the signature of one of the partners was fabricated since the partner had already died. The Tribunal noted that the explanation of the assessee was that the signature of the deceased partner was obtained before his death. The Assessing Officer has not brought on record any material to show why the explanation given by the assessee should be rejected in this regard. 8. In the absence of any material produced by the Assessing Officer to disbelieve the statement of the assessee, the second substantial question should also be answered in the affirmative, in favour of the assessee and against the Revenue. 9. The appeal is disposed of in terms of the above. ( MADAN B.LOKUR, CJ ) Dt: 26-12-2011. ( SANJAY KUMAR, J ) tnb "