ppeal No 223 of 1965
Appeal from the judgment and order dated February 23 1962 of the Madhya Pradesh High Court in Misc
Civil Case No 165 of 1961
194 N A Palkhivala section T Desai TA Ramachandran J B Dadachanji for the appellant
A V Viswanatha Sastri R H Dhebar N D Karkhanis and R N Sachthey for the respondent
The judgment of the Court was delivered by Subba Rao J
This appeal on a certificate granted by the Madhya Pradesh High Court raises the question whether an appeal lies under section 301 of the Indian Income tax Act 1922 hereinafter called the Act to the Appellate Assistant Commissioner against the order of an Income tax Officer cancelling an order granting registration of a firm under section 26 A of the Act
The facts material for the said question may be briefly stated
The appellant is a firm constituted under a deed of partnership dated July 16 1948
The Income tax Officer registered the said firm under section 26 A of the Act for the year 1950 51
The registration was renewed for the years 1951 52 and 1952 53
On November 30 1957 the Income tax Officer renewed the registration for the assessment year 1953 54
On March 6 1959 on the ground that the firm was not a genuine one the said officer cancelled the registration under Rule 6 B of the Income tax Rules
The appellant preferred an appeal against that order to the Appellate Assistant Commissioner Indore
On July 15 1959 the said Assistant Commissioner rejected the appeal for the reason that no appeal lay against the order of the Income tax Officer cancelling the registration
The appeal filed by the appellant against that order to the Income tax Appellate Tribunal Bombay was dismissed
At the instance of the appellant the following question was referred to the High Court under section 661 of the Act  Whether on the facts and circumstances of the case the order passed by the Income tax Officer under Rule 6 B of the Indian Income tax Rules cancelling the certificate of renewal of registration granted to the assessee is appealable under section 30 of the Income tax Act
 A Division Bench of the High Court of Madhya Pradesh answer ed the reference against the appellant
It held that no appeal lay under section 30 of the Act against the order of the Income tax Officer cancelling registration to the Appellate Assistant Commissioner
Hence the appeal
195 The only question in this appeal is whether an order cancelling the certificate of renewal of registration made under section 26 A of the Act by an Income tax Officer is subject to an appeal under section 301 to the Appellate Assistant Commissioner
At the outset the relevant provisions may be usefully read Section 26 A 1 Application may be made to the Income tax Officer on behalf of any firm constituted under an instrument of partnership specifying the individual shares of the partners for registration for the purposes of this Act and of any other enactment for the time being in force relating to income tax or super tax
2 The application shall be made by such person or persons and at such times and shall contain such particulars and shall be in such form and be verified in such manner as may be prescribed and it shall be dealt with by the Income tax Officer in such manner as may be prescribed
Rule 6
Any firm to whom a certificate of registration has been granted under Rule 4 may apply to the Income tax Officer to have the certificate of registration renewed for a subsequent year Rule 6 A
On receipt of an application under Rule 6 the Income tax Officer may if he is satisfied that the application is in order and that there is or was a firm in existence constituted as shown in the Instrument of Partnership grant to the assessee a certificate signed and dated by him in the following form Rule 6 B
In the event of the Income tax Officer being satisfied that the certificate granted under Rule 4 or under Rule 6 A has been obtained without there being a genuine firm in existence he may cancel the Section 30
1 Any assessee objecting to the cancellation by an Income tax Officer of the registration of a firm under sub section 4 of section 23 or to a refusal to register a firm under sub section 4 of section 23 or section 26 A may appeal to the Appellate Assistant Commissioner against the assessment or against such refusal or order
 196 The gist of the said provisions relevant to the present enquiry may be stated thus  Under section 26 A of the Act an application may be made to the Income tax Officer on behalf of a firm for registration for the purposes of the Act
Such an application has to be filed and disposed of in the manner prescribed in the Act
Under the Rules an application for the renewal of registration of a firm which has already been registered in the previous years has to be filed before the Income tax Officer
That application will be disposed of in the manner prescribed by Rules 6 A and 6 B Under those rules the Income tax Officer is authorized to make three kinds of orders viz i he can refuse to renew the registration of the firm ii he can register the firm and iii he can cancel the renewal of registration if he is satisfied that the renewal has been obtained without there being a genuine firm in existence
The crucial point to be noticed is that the said three kinds of orders having regard to the circumstances of each case will be made only in the application for renewal of registration
The Rules do not provide for independent proceedings for the cancel lation of the renewed certificate
In effect the Income tax Officer after setting aside his earlier wrong order made under a misapprehension refuses renewal of the certificate of registration
If so it follows that the order cancelling registration is nothing more than refusing to renew the certificate of registration
If that be the construction of an order made cancelling the certificate re newed such an order directly attracts the appellate jurisdiction conferred on the Appellate Assistant Commissioner under section 30 of the Act
But Mr Viswanatha Sastry for the Revenue contended that there was internal evidence in section 30 of the Act itself to show that such a construction was not possible
He further argued that under the Income tax law there was no scope for equitable considerations and under the express provisions of section 30 no appeal Jay against the order of the Income tax Officer cancelling the certificate of registration
In support of his contention he relied upon that part of section 30 of the Act which we have extracted earlier and contended that when the Legislature in the context of the orders made under section 23 4 spoke separately of the order of can cellation of registration of a firm and an order refusing to register a firm and in the same section in the context of section 26 A it mentioned only refusal to register a firm it clearly expressed its mind that in the former case an appeal would lie against both the orders whereas in the latter case an appeal would lie only against one of the orders
There is some force in this argument
But a 197 careful reading of the provisions of section 23 4 and section 26 A brings out the difference in the phraseology used in section 30 in the matter of appeals against orders made under the said two sections
The relevant parts of section 23 4 and section 26 A 2 may be placed in juxtaposition  Section 234 Section 26 A2 be dealt the case of a firm may refuse to with by the Income tax Officer in register it or may cancel its registration such manner as may be prescribed
ration if it is already registered
A comparative study of the relevant parts of these two provisions at once shows the distinction between the two
Under section 234 while the Income tax Officer can make an order refusing to register a firm or may cancel the registration if it is already registered under section 26 A2 he can only make an order in such manner as may be prescribed
The manner prescribed as we have already indicated earlier provides for three different kinds of orders to be made in the same application with the result that an order of refusal to renew a certificate and the order cancelling the certificate renewed are given the same effect namely refusal of the application to register
That apart when section 30 provides for an appeal against the orders under section 234 and also against orders under section 26 A it has incorporated the two forms of orders embodied in section 234 and used a general word in providing an appeal against an order under section 26 A for the nature of order is not described but left to be prescribed under the Rules
If so it follows that the words refusal to register a firm  in section 30 of the Act are wide enough to take in the orders made under rr
6 A and 6 B refusing to renew the registration and also cancelling the certificate so renewed
By so holding we are not unaware that equity has no place in construing the provisions of the Income tax Act
Indeed we have not introduced any equitable consideration in the matter of construction
We have come to the conclusion on a fair reading of the relevant provisions of the Act and the Rules made thereunder
In the result we answer the question propounded for the High Court s decision in the affirmative
The order of the High Court is set aside and the appeal is allowed with costs
Appeal allowed


Summary:
The Income tax Officer cancelled the certificate of renewal of registration of the appellant firm under r 6B of the Income tax Rules on the ground that the firm was not a genuine one
The Appellate Assistant Commissioner the Tribunal and the High Court on reference held that no appeal lay against the order of the Income tax Officer to the Appellate Assistant Commissioner under section 301 of the Income tax Act 1922
In appeal to this Court HELD The words refusal to register a firm in section 30 are wide enough to take in the orders made under rr
6A and 6B refusing to renew registration and also cancelling the certificate so renewed and such an order directly attracts the appellate jurisdiction conferred on the Appellate Assistant Commissioner under the section
196 E 197 F The fact that section 30 provides for an appeal separately against the orders under section 23 4 either refusing to register a firm or cancelling the registration of a firm but provides in the context of section 26A for an appeal only against an order refusing to register the firm does not affect this construction of section 30 because when section 30 provides for an appeal against the orders under section 234 it has merely incorporated the two forms of orders embodied in section 234 and when it provides for an appeal against the order under section 26A it has used a general word for the nature of the order under section 26A is not described but is left to be prescribed under the Rules
The application under section 26A made to the Income tax Officer on behalf of a firm for registration for the purposes of the Act will be disposed of in the manner prescribed by rr
6A and 6B Under these Rules the Income tax Officer is authorised to make three kinds of orders namely i he can refuse to renew the registration ii he can register and iii he can cancel the renewal if he is satisfied that a renewal was obtained without there being a genuine firm in existence
But the three kinds of orders having regard to the circumstances of each case will be made only on an application for renewal of registration because the Rules do not provide for independent proceedings to the cancellation of the renewed certificate
When the Income tax Officer cancels a renewed certificate he sets aside his earlier order and refuses a renewal with the result that an order of refusal to renew a certificate and the order cancelling the renewed certificate are given the same effect namely refusal of the application to register
It follows that the order cancelling registration is nothing more than refusing to renew the certificate of registration
196 A E 197 C E