JUDGMENT
1. The Income-tax Appellate Tribunal, Delhi, has referred the following question of law for opinion to this Court under Section 256(1) of the Income-tax Act, 1961, hereinafter referred to as "the Act" :
Whether the learned Tribunal was justified in law in entertaining the appeal against refusal of registration when no separate order under Section 185 was passed by the Income-tax Officer ?
2. The reference relates to the assessment year 1976-77. The Income-tax Officer while making the assessment under Section 143(3) took the status of the respondent-assessee as association of persons instead of a registered firm claimed by the respondent-assessee. The assessee preferred one single appeal against the assessment order and challenged the findings regarding status also.
3. The appeal was entertained by the Commissioner of Income-tax (Appeals) who held that the firm should be treated as an association of persons entitled to registration. The appeal filed by the Commissioner before the Tribunal failed.
4. We have heard Shri A.N. Mahajan, learned Counsel for the Revenue, and Sri Murlidhar, who has put in appearance for the assessee.
5. Under Section 246(1)(a) of the Act an appeal lies against the order of assessment as also on the question where the status under which the assessee has been objected to. The Income-tax Officer in the assessment order itself has changed the status of the respondents from that of a registered firm to an association of persons. Thus the single appeal was maintainable.
6. In the case of CIT v. Rupa Traders , the Calcutta High Court has held that (headnote) :
Under Section 246 of the Income-tax Act, 1961 read with Rule 45 of the Income-tax Rules, 1962, and Form No. 35 prescribed under the Rules, where an assessee challenges before the Appellate Assistant Commissioner both a best judgment assessment under Section 143 and an order refusing registration under Section 185 relating to more than one assessment year, a single consolidated appeal against the order of assessment as well as the orders refusing registration or renewal of registration is valid.
7. A similar view has been taken by the Bombay High Court in the case of CIT v. Hansa Agencies and the Gujarat High Court in the case of Patel and Co. v. CIT , and by the Rajasthan High Court in the case of Ansari Jewellers v. CIT [1987] 167 ITR 380.
8. We are in respectful agreement with the views taken in the aforesaid cases and hold that a single appeal was maintainable against the order of assessment and refusal to grant registration.
9. Respectfully following the aforesaid decisions we answer the question of law referred to us in the negative, i.e., in favour of the assessee and against the Revenue. However, the parties shall bear their own costs.