Commissioner of Income Tax vs Bhagirath and Bros.

Sapre, J.

This is an application filed by the revenue (Commissioner of Income Tax) u/s 256(2) of Income Tax Act consequent upon the dismissal of application made by revenue u/s 256(1) ibid by the Tribunal by order dated 5-6-1992, passed in R.A. No. 190/IND/92, which in turn arises out of ITA No. 606/IND/89.

In the opinion of Tribunal, no referable question of law arises in the cases and hence, the application formaking the reference to this court for answer on merits u/s 256(1) came to be dismissed. So the short question that arises for consideration in this case is whether any referable question of law arises in this case out of the order passed by Tribunal while deciding the appeal and/or whether question proposed by the revenue can be said to be the question of law so as to call upon the Tribunal to refer to this court for answer on merits?

Heard Shri R.L. Jain, learned counsel for the applicant.

Having heard learned counsel for the applicant and having perused record of the case, we are of the view that application does not involve any referable question of law and what is proposed do not satisfy the test laid down for calling the said question. It is in other words, a question of fact and hence, the application must be dismissed.

The dispute in this case relates to the question as to whether Tribunal was justified in holding that no case whatsoever was made out for want of material to cancel the registration of firm and treat them to be URF and/or assess them as AOP ?

In the opinion of Tribunal in the absence of any material the assessing officer was not justified in cancelling the registration of firm already granted and then treat them to be AOP for making fresh assessment in capacity of AOP and not as RF i.e. Registered Firm. The Tribunal while rejecting the application made by revenue u/s 256(1) ibid held that no referable question of law arises out of aforementioned finding of Tribunal.

We are inclined to concur with the finding of Tribunal recorded in the proceedings u/s 256(1) by the Tribunal. It is noticed that on the strength of one document seized in search operation carried in the premises of assessee and inference was drawn that four partnerships to whom the assessing officer had initially granted registration are not genuine firms and hence, they all be treated as AOP rather than the RE. In the opinion of Tribunal, the impugned finding cannot be returned on the strength of one document. In other words, the Tribunal came to a conclusion that once the registration is granted to 4 firms and they were assessed accordingly, then in such event, the same cannot be set aside treating them to be AOP on the strength of one document. Accordingly, the order setting aside of the assessment made in capacity as AOP including the finding regarding cancellation of registration was set aside.

In our opinion, this cannot be said to be question involving any legal issue. It does not involve any referable question which this court may decide in exercise of powers u/s 256(1) of the Act. It is a pure question of fact requiring no interference by this court. It was thus rightly declined by the Tribunal when the Tribunal rejected application u/s 256(1) ibid. We find no reason to differ with the view taken by the Tribunal on this question and while thus concurring with the said view, uphold the same. As a result, the application is held to be devoid of any merit. It is dismissed.

No costs.